He Bootstrapped A Billion-Dollar Revenue Company By Delivering AI Services

In the vast expanse of entrepreneurial endeavors, stories of triumphs, trials, foresight, and fortitude abound. One such narrative encapsulates the essence of perseverance and innovation of Srinivas Balasubramanian, a visionary entrepreneur who defied conventional wisdom and carved his path to success.

In an exclusive interview, Srinivas shares the riveting account of his journey from humble beginnings in India to the pinnacle of corporate achievement in the United States.

He also reveals how he bootstrapped his company and took it to IPO without raising any funding from third-party investors. Srinivas also talks about the lessons he learned when building an executive team.

Listen to the full podcast episode and review the transcript here.

Early Years in India

Born and raised in India, Srinivas reminisces about his childhood amidst the backdrop of a nation grappling with scarcity yet brimming with ingenuity and a love for cricket “Life was different, a lot of fun, with fewer luxuries than we have today,” he recalls.

Despite the challenges of a semi-socialist India, Srinivas pursued his education with vigor, eventually venturing into the fields of engineering and management. He went to the Birla Institute of Technology and Science, Pilani, and then the Indian Institute of Management, Calcutta.

Srinivas went on to work in derivatives as a stock trader in Mumbai, running one of the largest institutional trading desks.

Venturing into the United States: The Infravio Saga

The turning point arrived when Srinivas, fueled by a burgeoning fascination with the internet, embarked on a journey to the United States in the late 1990s. He recounts how he started the company with his brother, Mukund Balasubramanian, who had taken the lead in moving to the US.

One day, his brother called and talked about the Internet in one of the few high-speed Internet cafes available in India at the time. And how the Internet was poised for a big boom.

Armed with ambition and a relentless drive, Srinivas co-founded his first internet startup, Infravio, out of a Stanford dorm room.

However, as Srinivas reveals, they never did any market research. They just looked at the world and figured that eCommerce was going to change the business landscape.

Mukund was doing a research project and basing his thesis on eCommerce and shopping, but really building an abstraction layer on top.

The objective was to do comparison shopping and consummation from a single destination site. It seemed like the right product at the right time and felt intuitively right. “We raised money through cold calling, as I didn’t know anyone in the United States,” Srinivas recounts with a hint of nostalgia.

The duo raised funding worth $7M three days before the dot com bust, which was the bare minimum. They used the money to purchase servers, the rack space to put the servers in, and storage.

Navigating the Dot-com Bubble: Pivoting to Success

The original plan was to raise another $70M six months later. However, fate had a twist in store as Infravio navigated the tumultuous landscape of the dot-com bubble. The company went into the tech nuclear filter between 2001 and 2006.

Srinivas and Mukund had to pivot the company extensively into an enterprise software company. Even so, they benefited from learning and understanding customer needs, enterprise software models, and Enterprise Data Systems.

As Srinivas opines, this experience and the lessons they learned are invaluable in what they are doing today. The lessons have influenced their fundraising efforts, the outcome of the business, and how they built the Photon business.

Srinivas looks back at the years he spent working out of the dorm room and the people who invested in their company, putting their faith in a couple of 25-year-olds from Stanford. The company made money and earned their returns, while Srinivas and Mukund stayed loyal to them.

Acquisition and Reflection: Lessons from Infravio

The saga continued with the acquisition of Infravio by webMethods for $40M, marking a pivotal chapter in Srinivas’s journey.

“I realized that corporate life wasn’t for me,” he reflects candidly. With newfound insights and an unwavering belief in the potential of digital transformation, Srinivas embarked on his next venture – Photon.

Srinivas candidly admits that their entire entrepreneurial journey has been about cold calling right down to selling the company. He recalls with amusement some of the conversations he had with people on the other end of the line who didn’t know who he was.

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One of the calls paid off, and the duo was invited to meet with the buyers at 8:00 am in Washington, DC. The deal was executed within 15 days, but Srinivas realized that the process of selling to a publicly traded company was not as simple as he thought it was.

They needed to go through financial audits and other procedures. However, the company’s systems weren’t exactly sound, which made the due diligence take six months to execute.

Srinivas credits the buyers as honorable people since they bought the company at the price that they had originally agreed to, even before the company was technically insolvent.

Srinivas advised founders to get their financial and legal systems in order before trying to go through a liquidity event.

The Birth of Photon: Riding the iPhone Revolution

Photon, conceived in the wake of the iPhone revolution, epitomized Srinivas’s visionary zeal. “We fundamentally believed in the concept of APIs and microservices shaping the future of mobile commerce,” he explains.

Srinivas and Mukund developed a business model to serve customers better by focusing on a confluence of strategy, creativity, and technology as a unified consulting offering. The objective was to create a well-packaged format to help users make their digital presence come to life.

They could accomplish this by building a great digital presence, which was the company’s founding version. The release of the iPhone came at an opportune moment and transformed their vision into a reality. Soon, the duo started working with a bunch of startups.

Initially, the duo set up shop in the San Francisco Bay Area and were dabbling in mobile apps and mobile presences. Being the first ones on the block and highly innovative, they soon had enterprises eager to adopt the best practices they had learned from the startups.

When some of these largest retailers, like Walgreens and the largest banks in the world, decided to adopt mobile as an experiment, Photon was the right port of call for them.

That’s because Srinivas and Mukund had the most experience in the infrastructure and with startups. By 2012, Srinivas and Mukund bet on the fact that enterprises would adopt mobile and digital in a big way.

From 2013, Photon rapidly ascended to prominence, serving an illustrious clientele, including Fortune 500 giants. The Photon business model is about consulting with a strong degree of specialization in new age technologies, which is new age hyper expanded digital technologies.

They include everything from code, digital presences, mobile apps, data building, marketing tech, cloud infrastructure, and, more recently, a lot of artificial intelligence. But packaging all that up beautifully in terms of business models and use cases for end customers.

Photon has an outcome-based engagement model that offers real value in terms of x times revenue or outlining how a particular channel should deliver revenue worth $1M. Ultimately, the millions became billions with Photon.

The Unconventional Approach: No External Funding

What sets Photon apart is not just its meteoric rise but its unconventional approach to funding. “We never raised any money,” Srinivas states matter-of-factly, defying the conventional wisdom of venture capital.

He explained that they didn’t see the need for funding since the business was generating adequate cash to fund itself.

Instead, Photon thrived on organic growth and profitability, a testament to Srinivas’s steadfast commitment to serving customers over investors.

Today, the company has several hundred million dollars in revenue, just short of $1B, and has generated several hundred million dollars of free cash flow for its lifetime.

Photon works with a significant percentage, or 40%, of Fortune 500 companies, bringing value to customers with many options. However, they prefer to work with Photon for its unusual ability to add value to their domains.

Preparing for the IPO: Balancing Customer-Centricity and Investor Relations

As Photon prepares for its IPO, Srinivas remains steadfast in his conviction that the convergence of customer-centricity and investor relations is paramount for sustained success. “Serve your customers first, and the rest will follow,” he advises, drawing from years of experience.

Taking the company public is a logical extension of where the company should go, which is the processes and systems that come with the public company. As Srinivas says, it will be very beneficial for them since it’s been an entirely organically grown business.

The emergence of artificial intelligence and other great technologies are out there for inorganic slash exponential growth if they can get investment for the company.

So, it’s the right step for the employees and the stage of the company to put the process, systems, and governance in place to be accountable for sustainable and meaningful growth for the next decade and a half to two.

Words of Wisdom: Lessons for Aspiring Entrepreneurs

Reflecting on his entrepreneurial journey, Srinivas imparts invaluable wisdom to aspiring founders. “Don’t view financing as a transaction; see it as a commitment for life,” he advises sagely.

With unwavering dedication and a relentless pursuit of excellence, Srinivas Balasubramanian exemplifies the spirit of entrepreneurship, inspiring countless others to dare, dream, and defy the odds.

As Srinivas explains, Photon’s core digital business will be only a subset of the new revolution. He firmly believes in the potential of artificial intelligence.

While there may be craters and troughs, he believes that what they have created is only the beginning of what the world will be 10 years later with the power of AI.

But Srinivas also asserts that Photon will have a powerful and meaningful role to play in that. They continue exploring multiple avenues as part of infrastructure, applications, and services while putting these technologies to work. He foresees fantastic and exciting times coming up.

Conclusion: A Beacon of Hope and Resilience

In the annals of entrepreneurial lore, Srinivas’s story stands as a beacon of hope and resilience, a testament to the transformative power of vision and perseverance.

As he embarks on the next chapter of his journey, the world watches with bated breath, eager to witness yet another chapter unfolding in the remarkable saga of Srinivas Balasubramanian – a true titan of innovation and inspiration.

Listen to the full podcast episode to know more, including:

• Srinivas Balasubramanian’s journey underscores the importance of resilience as he pivoted his ventures amidst the turbulence of the dot-com bubble.
• Prioritizing customer needs over investor demands proved pivotal in Photon’s success, reaffirming the value of serving clientele diligently.
• Srinivas’s unconventional path, devoid of external funding, showcases the potential of organic growth and profitability in sustaining business ventures.
• From co-founding startups in dorm rooms to leading multimillion-dollar enterprises, Srinivas exemplifies the visionary leadership necessary for entrepreneurial success.
• Navigating technological shifts and market dynamics, Srinivas’s ability to adapt and pivot underscored his entrepreneurial agility.
• Viewing entrepreneurship as a lifelong commitment, Srinivas emphasizes the importance of steadfast dedication and perseverance in achieving enduring success.
• Srinivas’s journey serves as an inspiring testament to aspiring entrepreneurs, highlighting the transformative power of vision, resilience, and unwavering commitment to customer satisfaction.

 

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