Luck, Perseverance: Keys to be OnMobile

Date:   Tuesday , September 07, 2010

It may sound contradictory but it’s true! The man who hates reading his mails on the move in smartphones and likes to keep his cell phone off at nights, is the same man who pioneered ringback tones in India and today he successfully heads the Rs.400 crore telecom business of OnMobile. Arvind Rao, the CEO of OnMobile, is a man who loves to be recognized not by his appearance but by his skills and infact was famous for his worst dressing sense. “I remember once closing a deal in jeans and a t-shirt. The guy seemed distracted the whole time. Just before he signed the contract, he looked up and asked confusedly: ‘One of you is the CEO. Who is it?’ My colleagues were dressed in suits, while I was in casuals. Yet, I was talking the most,” he reveals with a smile in a most casual tone.

Hadn’t there been the zeal within Arvind Rao and his colleagues, a bunch of techies led by ex-Infosicion Mouli Raman, OnMobile couldn’t have reached the present heights after it was resurrected from the ashes. Today, the company stands as a fitting example of how perseverance and focus pays off. As a company, they have seen moments, when they expected first-rate results but all they could get were failures. Now, when Rao speaks about his baby there’s a glint in his eyes that testifies the never-die-spirit within him, a trait which he wants to instill in everyone in OnMobile.

Luck By Chance

Entrepreneurship was never a word for Rao, an IIT graduate, when he flew off to the U.S. to pursue his MBA at Wharton. Once out of grad school, he saw McKinsey calling. He was responsible for one of the portals of the consulting world at McKinsey, straddling consulting and private equity together. His comfortable life however, still had an issue – a missing line. It was a spell of destiny that when Rao came to India to start an IT fund in the country for McKinsey, he chanced upon a few senior members of Infosys including Raman and was completely unaware of the venture that was cropping up within Infosys under the leadership of Mouli Raman.

“I had no idea that an in-house team was working on developing wireless, telecom and Internet products within the IT services behemoth. Infact that was the time, when the team was also anticipating a spin out to start independently,” the CEO recalls. All the while, the group standing opposite could see in him a great partner, courtesy his more than 10 years of investor experience in U.S.

Once he realized the real intent of the Infoscions, his shielded dreams regained their wings. He had earlier invested in a couple of companies that had bet big in the same space and was fully in tune with the huge market that opened up; yet he couldn’t do much due to the lack of a technical team and was still on the lookout for one. The discovery of the Infosys team ended his search and soon Rao joined in to start Onscan, which was later renamed as OnMobile, in California incubated at Infosys. They began with the Internet-based alert service, but soon shifted towards the telecom space. In India, Cricket is next to God and the chances of OnMobile’s first application, a voiced based cricket information application, to be a hit was destined, though it took them a few years of resolve to remain in the market.

The Success Streak

For OnMobile, it is a 360 degree approach. The CEO clears out his motto, “We seek to write history, by creating new services which enhance people’s lives using their mobiles and going where no one has gone before. We seek to lead, to set the course for others.” They pioneered the Ringback tones in India and today command the highest revenues from it with 44 million users.

But it’s surprising that the application, which costs around Rs.40, saw its traction in a market, where 60 percent of the mobile users maintain less than Rs. 10 as balance.

It is not only ringback tones, rather they have targeted the entire gamut of services in the mobile space via apps based on Voice, SMS, WAP, USSD, On-Device Portal and Web. When you hear various applications recognizing the multiple Indian dialects, the credit should be given to Rao, who paved the way for the world's first Indian language Speech Recognition Model launched by OnMobile. Today, the company enjoys a user base of 83 million unique users per month. On a lighter note Arvind Rao remarks “I firmly believe the way I dress has no impact on my business. The fact remains that our deal closure rate is more than 95 percent. And all our customers have given us repeated business.”

The Perseverance Behind

An exemplary product does not come easy in the telecom space, especially in the value-added services market. “An entrepreneur begins with starry eyes, but there should be a vision for sensible application for the market to accept it. It’s the right focus and repeated pitching that will deliver the positive results as one steers through the challenges,” asserts Rao, while recalling his earlier experience.

“Where have you deployed it earlier?” is a question that Rao and Raman always confronted, whenever there was a customer visit. The notion of referral that guided every network operator made it difficult to bring the trust in the application. For OnMobile it was a situation where products remained half done as revenues halted. Within two years of time, in 2002 the company was thrown into dire circumstances whereby they had to pull the shutter down.

But can someone orphan their child? The same thought bothered Rao and Raman too. “Had Rao not instilled the faith in each one in the team, OnMobile would have never seen the daylight again,” recalls Raman. The strategy changed and they shifted to India. Challenges prevailed; however, the CEO knew how to deal with it. “As a startup, we didn’t have experience, so approaching 10 operators at a time was futile. As we didn’t have referrals to bet on, so it had to be the product. We pitched only one operator, and kept on pushing repeatedly for our voice-based cricket information application,” reveals Rao.

This time the strategy clicked with Hutch, now Vodafone India. Sandip Das, the former Managing Director of Hutch saw the need of an application, wherein users can just dial and get the information on cricket scores and updates on different players’ scores in particular. Rao and his team were given the nod to deploy the applications in one of the circles of Hutch though it was a revenue sharing model.

It was their first break in India and as they say, the rest is history. Rao saw a sea change in his dynamics with customers—there was a time when they were pining to get just one and today several calls pour into their office for their products. In an advisory tone, Rao maintains, “When you are a startup and are looking for the first break, never be demanding. Once the success story is set, operators will start pouring in on their own.” The company went public in 2008 with about nine million fresh shares and two million offer of sale from existing shareholders and today has a market capital of Rs. 19.77 billion.

OnMobile now has 206 million users, and clients such as Bharti, BSNL, Vodafone, Reliance and Tata Tele Srvices. It has contracts with wireless carriers in Indonesia, Malaysia, Pakistan, Bangladesh and Sri Lanka, for licensing and management of VAS.

Employee Satisfaction

When Rajnikanth V, a middle-class youth got the job as a delivery manager at OnMobile, none expected his riches to grow beyond the high level middle-class. Today, however, he has become the cynosure of everyone, since though he is not even 30, he steers around in his own BMW 3 series. His far-fetched dream that once seemed to be impossible could become real as someone in his management was more interested to build a team than having ‘employees’ who work ‘9 to 6’.

“The word employee should be banned. Everyone in our company, right from the peon to the top official, is a shareholder, this ensures that in every milestone the entire company gets charged up,” says Rao, with a smile as he sees his idea click. Rao knows that the motivation helps his employees to give in the best even sometimes via willing over-times. He understands the importance of his team in building a successful product, a core reason that led OnMobile to attain leadership position in the Value Added Services (VAS) market.

Notes from Experience

Rao, however, seems to be untouched by his achievements. He is not guided by achievements but rather by actions that led to those achievements. He inherited the disciplined actions from his father, a doctor who never practiced medicine to maximize medical earnings rather than to help poor mill workers. “What we have achieved in the past is not enough, if what we see in the future is as not so exciting as what we left behind,” he notes. He knows that the constant innovations that happen at the research labs of the category leaders like Ebay, Google and Amazon are much ahead. Still one can witness the confidence in him as he is sure that within a span of 10 years India will boast of equal number of category leaders.

Value-added innovation and being observant of the market trends are two key requirements for the success of any company, a lesson that Rao wants to etch into the minds of everyone. Whether it’s the Apple App Store, Nokia’s Ovi Store, or the app store for Android, each of them has made it possible for an application developer to sit at any corner of the world and enjoy distribution. “For instance, I came across a Formula 1 widget which showed live streaming from a Web cam attached to a Formula 1 car. And what impressed me more is that a team of four people had built it in just two month sitting far across the globe in Cambodia,” he pinpoints. It confirms the reducing of entry barriers for every application developer and startups at large.

Value Addition

As they breathed new life into the company, it brought in new learnings and today, whenever Rao witnesses a newbie entering the space he first observes their focus. A mere jump into coding will not help, as he says, “Without UI, no app can be a success”.

The common problem that hits many entrepreneurs is the threat of plagiarism, which mostly escapes unrecognized due to additional features included within the original idea. As a solution, he advice is, “It should reach the market prior to any other similar apps’ release and adopt a fixed pay-per use model instead of an ad-funded one. With the business model set, a company has to set the team right and for a telecom base firm who can’t find enough skills of product management, it’s advisable to import such talent.

Rao is always excited to add more value to the entrepreneurial community. “I lived for 7 years in the Silicon Valley and experienced the vibrant dynamism of entrepreneurs there. Via our Mobile Internet Incubator Fund and other programs we are looking to replicate that eco system here in India,” the CEO maintains. He introduced the incubator fund under which OnMobile incubates interesting ideas and also helps them to connect with venture capitalists to ensure further fundings. They also recall the issues they had faced while integrating their apps into the operator’s network and this led to the initiation of the Mobile Developer Network platform, on which anyone can launch their applications and thereby relax from the pangs of network integration and billing integration into the telecom operator’s knob.

Even after years of success in the VAS space Rao, is never a satisfied man. He is always on the lookout for new applications and solutions to improve the telecom space to ensure more risk takers enter the space. He has changed an entire gamut of operational structures in India for a smooth run in the VAS space, which is famously dubbed as a space ‘where only few succeeds’. At a personal point, there’s something which still remains the same – his love for sailing, and he has gifted himself a Jeanneau 54 DS—a 54-foot yacht. Amidst all the busy schedules he takes time out to sail atleast eight days a month. It is the spirit of a sailor that reflects in his work too, as sailors love to explore new horizons.