In a candid chat with The Smart CEO, Naveen Tewari shares ten narratives from his journey at the helm of InMobi, one of the largest, independent mobile advertising networks in the world.
India’s entrepreneurship ecosystem has been through several transitions. After the family business era, we had a revolution of sorts crafted by first-generation entrepreneurs from the IT services and BPO/KPO segments. These were entrepreneurs who plunged into entrepreneurship in the late 30s and early 40s. Then, 2005 onwards, we had people in their mid 20s ruling the startup landscape. If you had a last name called Bansal, you were right on top of India’s consumer boom by betting on e-commerce marketplaces.
Even as this was happening, there was a silent, almost unnoticed transformation happening in parallel. The country’s software talent started paying attention to building products, as opposed to serving global customers with a services mindset. Companies like Freshdesk and InMobi were born. These are companies that started off in India, with Indian entrepreneurs who dreamt big and had ambitions to take on Silicon Valley biggies.
One such entrepreneur is Naveen Tewari, the founder-CEO of InMobi, one of the world’s largest mobile advertising networks. InMobi’s competition, hold-your-breath, comes from Google’s AdMob and Facebook’s Audience Network for mobile apps, but Tewari is gearing up for building a large, independent business without selling out. At least, not yet.
Tewari who is armed with an MBA from Harvard Business School and worked for McKinsey for a short while, decided to leave it all and return to India to startup a business called mKhoj. It was an idea too early for its time, and Tewari and his co-founders – Amit Gupta, Abhay Singhal and Mohit Saxena – pivoted to what is now InMobi.
Today, of course, Tewari along with Flipkart’s Bansals, Snapdeal’s Kunal Bahl and Rohit Bansal, Freshdesk’s Girish Mathrubootham, and Vijay Shekhar Sharma of Paytm, are spearheading the next phase of India’s startup boom.
At The Smart CEO, we had a candid chat with Tewari, during which he recollected for us some unforgettable moments from the InMobi journey. We wanted Tewari to recount conversations he has had with his co-founders and investors and take us behind the scenes into the operational style of InMobi.
We decided to understand what is running in the mind of the founder of a startup with a US $2.5 billion valuation (according to research by Forbes Asia). What was the one valuable lesson he learnt from Softbank’s Masayoshi Son? What was on his mind when he was at the negotiation table with Sprout and MMTG Labs (two companies that InMobi acquired)?
Read on. We present you a collection of nine first-hand narratives from the InMobi journey, as told by Naveen Tewari. Additionally, we’ve backed it up with factual information gathered from InMobi’s official blog.
Some unforgettable moments
There have been several unforgettable moments in the entire InMobi journey. The 18-hour transition from mKhoj to InMobi (in 2008) and the US $200 million fund raising process from Softbank (in 2011) particularly standout. In fact, the Softbank round was an exhilarating moment because it was a significant amount for a technology company to raise at that stage. Another recent one I can recall is during the launch of Miip Technology in San Francisco. I was quite nervous just ahead of the launch because we were expecting a huge audience turnout and I had no idea how people would react to it.
Elaborating on one of his unforgettable days, Naveen Tewari wrote in his blog: “When we realised that the model of solving the local information problem using SMS-based search did not work, the decision to abandon this and move on was extremely difficult.
Once InMobi was rolled out, the company was running low on both money and morale and the product had no paying customers. The team decided to work without pay and also pitched in with their credit cards. Team members refrained from making personal purchases using their credit cards because credit limits were getting breached rather quickly. It was these tough periods that really brought the team close and showed great commitment. Things started to look up for the team when Kleiner Perkins and Ram Shriram (Sherpalo Ventures) decided to put money into the company.”
At the negotiation table with sprout, a company we acquired
Here’s a fact. Part of the founding team at Sprout (a HTML5 rich media platform) was based in Honolulu, Hawaii. So one point of negotiation was: “We can’t manage an office in Hawaii, so the employees will have to move to the San Francisco office.” However, after several rounds of discussions and debates, we decided to retain the Hawaii office with some Sprout employees, including one of the founders Kevin Hughes, stationed there. A few months later, I came to know that the primary reason why Sprout agreed to the acquisition (they had other offers too) was because we let them retain their Hawaii office. Of course, now we have a lot of Alohas! going on in one of our global offices. (Laughs)
InMobi completed its acquisition of Sprout, a HTML 5 rich media platform in August 2011. After that the company also acquired U.S.-based Appstores.com, MMTG Labs (makers of AppBistro and AppGalleries), Metaflow Solutions (U.K.-based mobile app management and distribution solutions firm and Overlay Media (U.K.-based developers of context aware and location sensing mobile technologies).
Our foray into china
When we entered China, more people doubted us rather than supporting us because the market is very complex. Of course, this wasn’t unexpected. Our entry into China questioned most practices a company typically follows when foraying into the region. For example, we were advised that we have to get into a joint venture. However, we went against the usual and decided to build a China-centric team. We recruited locally and our move to rope in Jessie Yang (the current Senior Vice President and General Manager of InMobi at Greater China) has paid off. She has become a phenomenal leader.
There’s one aspect about the Chinese market that we understand now; It is that everything in the country happens at a super fast pace. Deals are closed on WeChat, in no time, and companies that do not adapt to this speed of operations cannot survive here.
According to data from eMarketer, in 2015, China was estimated to have 525 million smartphone users. To capitalise on this booming market, in September 2015, InMobi entered into a long-term strategic partnership with Chinese app developer APUS Group, and later with TalkingData, which tracks users on 1.5 billion mobile devices in China. As a part of the first deal, InMobi would share its India expertise to help APUS establish a larger footprint in India. In return, APUS would engage in a monetisation partnership with InMobi, thus allowing them greater access to over 200 million additional users across APUS’s user system (in India and China). In the second deal, the partnership will help InMobi target ads better to users in China and make its Miip Technology more effective among these users.
The moon-shot projects
We categorise our product development efforts into three buckets; the revenue generating effort which is focussed on efficiency and business as usual, the teething efforts which ensure that we are strategically positioning ourselves right by developing products which are a need of the hour, and the moon-shot initiatives, from which we have no specific expectations. The last bucket is usually a year and a half to two-year effort and comprises a small team of three to four people. We keep this going because we don’t know what might click. As a matter of fact, Miip Technology was a moon-shot project, which became mainstream recently.
Typically, 50 per cent of the product development team works on the main revenue generating business, 30 per cent on strategic efforts (teething projects) and the rest on moon-shot.
Miip Technology, one of its moon-shot projects, became mainstream when it was officially launched at San Francisco in July 2015. In a move to make ads more relevant and contextual for users, when a user logs into his/her favourite app, Miip’s AdMonkey drives contextual ads and relevant information based on the user’s search criteria. Over time, Miip learns and refines its recommendations through reactions and emotions expressed by the consumer within the discovery zone. For example, if a user is logged into a travel app and is searching for vacationing in Hawaii, the AdMonkey will pop up relevant ads such as recommended stays, must visit places and more. And, here’s an interesting fact. Miip not only drives contextual ads but also carries a buy button, wherein the user can purchase directly by clicking on the ad. To enable this, it has recently partnered with U.S.-based Stripe (a payment solutions provider). Currently said to be deployed across 40,000 apps, some of its clients include Amazon, Paytm, Urban Ladder, Magzter, Spotify and more.
Candid with masa
One of the things I really admire about Masayoshi Son and Softbank Corp. is that they think big; I mean, really, really big. I remember, a couple of years ago Masa named a company and asked me, “why aren’t you acquiring them?” I looked for a logical answer to why we were not. I asked, “Are we getting technology? Are we getting resources?” And, he responded with an interesting note. He said, the value of scale, and therefore the value that you gain through an acquisition is not always in the components of it. It is something bigger; it is how your organization’s mindset changes and the future opportunities the acquisition brings. You also send a clear message to your other competitors.
This became a turning point for us because from then on, we (our management) began looking at some decisions from a very different perspective.
Apart from its seed round amounting to U.S. $500,000 from Mumbai Angels in April 2006 (when it was still mKhoj), InMobi has raised four rounds of funding (in May 2007, July 2010, September 2011 and December 2014) totaling US $220.1 million from KPCB, Sherpalo Ventures, and Softbank Corp. Softbank participated in the Series C in 2011 and the following round in 2014
Dealing with competition
When you are competing head-on with Facebook and Google, you’d rather keep it simple. The only thing you can ensure is that you stay on the edge of innovation and disruption. Continue to identify problems, work on them and look at them differently. Because, innovation is not a eureka moment. It has to happen continuously.
Most difficult problem
There is no doubt on the most difficult problem I have ever had to deal with. It is, letting go of people; people I’ve worked with; and it is very emotional. The transition from a small company founder to a professional CEO requires you to make some hard decisions. Among them, asking people to leave is the toughest thing to do.
As co-founders, we all have unbelievable trust in each in other. This means, we are ultra transparent, we say everything we need to, openly to the extent that sometimes people assume we are fighting. (Laughs) Moreover, earlier, we used to talk regularly but as our roles expanded, we made it a weekly routine by calling our meeting ‘founders connect’. We all come together, sit and talk, discuss, brainstorm or just have an informal chat, and it always results in something meaningful.
And, when it comes to critical conversations, I can’t point to one thing. It’s been a series of things, like hiring people, opening new businesses, shutting down business and as often spoken about, the transition from mKhoj to InMobi at the early stage. This decision particularly was tough because we were essentially questioning everything we did in the past six months. I would even say that our emotions were very heated during the 18-hour decision period, but it somehow worked.
Work culture: the yawio project
When we started designing InMobi’s work culture, we went with four assumptions; that the people in our company are good, trustworthy, have the right intentions and are responsible. We believe, the reason why policies came into being in the first place was because one per cent of the population didn’t carry these traits, hence, the other 99 per cent had to suffer for it. Moreover, companies would often confuse that a performance measurement system would spur growth. We asked ourselves, are we doing the right thing to achieve growth? Because, when people really do care about growth, we (as a company) need to care about growing them. And care doesn’t necessarily mean giving them a bonus so they work more. No employee is going to say, I got 10 per cent extra money so let me innovate 10 per cent more. Care is about giving them the right environment. When we do that, we will have happy employees.
Hence, our goal was clear; to build a culture and an environment in which people would like to work. With this premise, we got rid of all performance evaluations. We brought in a system where everybody would get a 100 per cent bonus. We created opportunities for people to apply for jobs (in other roles/streams) within the company if they have been an InMobian for a year. This ensured that there was movement inside the company. We created our own competition instead of having people leave the company. With these practices in place, we termed our work culture YaWio.
Today, YaWio-x is an annual festival where we invite one or two startups every year to come into our office and observe our work culture. They need not necessarily adopt every practice but they can take back what they feel is relevant to their organisation and share their feedback (success rate) with us.
After terming its work culture YaWio (‘Ya’ meaning imagination in Turkish, ‘Wi’ meaning harmony in Sanskrit and ‘Wio’ meaning Action in Latin), InMobi designed its first festival, YaWio-X. The festival was initially aimed at bringing together some of its best problem solvers to take a break and solve some of humanity’s biggest challenges that are unrelated to their daily work. During year one, InMobi invited three companies; X Prize (which solves human challenges through global competition), Magic Bus (which brought 300,00 children out of poverty into livelihood) and Team Indus (which aspired to land an unmanned rover on the moon). The challenges posed to InMobians were solving women’s safety globally using exponential technologies, transmitting educational content through extremely low bandwidth and setting up a communication system between the rover and the lander, amidst the harsh conditions on the moon.
As more companies began noticing its festival, InMobi made its culture open source and invited other startups to observe and develop their own innovation-fostering cultures.
What you should keep in mind
OPERATING IN MULTIPLE GEOGRAPHIES
Hire great people
Don’t take short term steps
Don’t customise products to regions. It’s difficult to manage multiple code bases
BUILDING YAWIO CULTURE
Don’t focus too much on performance measurement. Instead, care about offering your employees growth.
Believe that your employees are good, trustworthy, have good intentions and are responsible
Keep it simple. Don’t over complicate the process.
Stay on the edge of innovation and disruption. Keep identifying problems and look at them differently.