10 min read.Updated: 19 Aug 2013, 01:16 AM ISTMark Bergen
ZipDial, run by Valerie Wagoner and her two co-founders, is the first success story in India’s missed-call business
Bangalore: Two years ago, in April 2011, as the Indian Premier League (IPL) season began, cricket fanatics found a new way to kill time between matches. They would place a call and then hang up. An SMS would be shot back with a single number. The fans would use that to track virtual runs in impromptu matches with each other. Then they would dial again, and again. Periodically, the numbers were interrupted by a different SMS—an ad from Kingfisher.
In January this year, a report in The Economic Times referred to India’s burgeoning ₹ 500 crore “missed-call business", a mark of success for the company that was first on the scene: ZipDial Mobile Solutions Pvt. Ltd, run by the 30-year-old entrepreneur Valerie Rozycki Wagoner, who hails from California’s Central Valley, along with her two co-founders.
Book Cricket, as the missed-call IPL game is known, might have made ZipDial’s name, but when Wagoner first heard the term, during a call with a marketing representative from league sponsor United Breweries Holding Ltd (UB) in 2011, she had no idea what it was. UB also owns the Royal Challengers Bangalore IPL franchise. Kingfisher is a UB brand.
To those who went to school in the age before computers and smartphones, Book Cricket involved opening a page at random. Each opening of the book was a ball bowled and the last digit of the page number would be used to determine whether runs had been scored or the batsman was dismissed.
But the UB rep described a game that was being run by Kingfisher on a Web interface and via Facebook. “We can build that on ZipDial," Wagoner told the representative from her temporary Mumbai apartment, while typing an email to co-founders, Sanjay Swamy and Amiya Pathak: “Do you know what Book Cricket is?"
They did, although by then Wagoner had already sealed the deal with UB for upwards of $10,000, giving the new company its largest client. ZipDial, which sells marketing platforms built around missed calls, now has 400 paying clients including Hindustan Unilever Ltd, Procter and Gamble India Ltd, and both the Bharatiya Janata Party and the United Progressive Alliance. This year, it is en route to over $1 million in revenue.
In April 2013, ZipDial secured another round of investment, from Jungle Ventures, a venture capital firm in Singapore, to launch its first campaign abroad, in Sri Lanka: all part of Wagoner’s ambitious plan to build “an Indian MNC (multinational corporation)."
The idea for ZipDial was born from a brainstorming session between Wagoner and Swamy on a late night flight back to Bangalore from New Delhi. They were pondering the problem retailers face in tracking consumer loyalty, and they floated the fix of a missed call.
“And we thought," Wagoner recalled, “‘What else could you do? And what else? And what else?’" The potential uses kept multiplying. Wagoner and Swamy had recently left mChek, a mobile payments company, and had roped in Pathak from Zapak.com as their third partner.
The IPL played a pivotal role in the genesis of ZipDial. A year before the Kingfisher handshake, before the onset of the 2010 season, the company had rolled out its first version of the flagship product, a “marketing and analytics platform for mobile via missed calls" aimed at brands such as Kingfisher that wanted to connect with their customers directly, relaying information about deals, coupons or marketing messages, and polling and tracking match scores. By registering on a number provided by ZipDial with a free missed call, a customer could receive text messages free from the company.
All that was left to do was to build a prototype, and the process was unusually fast.
They created a polling system, with phone numbers attached, that allowed fans calling in to vote for match victors. Pathak, the chief technology officer, built a simple Web counter to track usage. The threesome sat together and watched eagerly, sometimes punching in the 10 digits and hitting refresh to see it tick up.
“We were amazed when 70 people would call in," Wagoner says. “Literally, within a couple months, millions of users were dialling millions of times a day. We had done zero marketing."
The need to become serious about the business quickly became apparent.
During the 2010 IPL season, a user “found" ZipDial’s site, logged in and create his own missed-call campaign. They tracked him down to Gujarat. It turned out that Zaheer was a cricket fan, driven by enthusiasm rather than any malicious intent.
Still, it was a warning and Pathak swiftly tightened security. Meanwhile, through an attorney friend, Swamy filed initial claims for what would eventually grow to 87 broad patents. And Wagoner would go on to create a prize for ZipDial staff who come up with innovative ideas. She called it the Zaheer Award.
Quitting the Valley
In lieu of a business card, Wagoner hands out a number. After logging a missed call, the dialler receives an SMS with her contact details—a demonstration of the product.
“It’s one of those businesses that feels natural for India," says Dev Khare, a partner with Lightspeed Venture Partners who introduced Wagoner to Swamy. “Whereas in the West, it would be, ‘What are you talking about?’"
Brother Stefan Rozycki admits he has trouble explaining his sister’s start-up to people in the US.
Wagoner’s resume is varnished with Silicon Valley sheen. She is twice graduated from Stanford University, the feeder for countless technology companies and the alma mater of her grandfather, his brothers and father. Her first job after college was with Ning, the social networking company founded by Marc Andreessen, an illustrious venture capitalist and co-author of Mosaic, an early Internet browser that became Netscape, part of which evolved into Firefox.
After Ning, she was one of four initial employees at SayNow, a voice messaging start-up acquired by Google Inc. in 2011. She was immersed in the Valley’s “low-key" environment, she says. “I would go to birthday parties and Mark Zuckerberg was there in his flip-flops and basketball shorts."
But Wagoner insists that nothing was handed to her on a platter. “That’s not how it happened. How it happened was I worked my ass off."
Wagoner was born in a suburban farming community, once Gold Rush soil, close to Palo Alto in geography but distant from it economically. The largest industry is a Gallo winery. About half of her roughly 800-strong high school class graduated. “No one in my family is in technology," she says.
She does, however, follow in a long line of entrepreneurs, notably on the female side. Her mother started a court dictation firm, and her maternal grandmother was the first woman in California to buy land at an auction. Two years ago, Wagoner’s parents created a “diabetes-friendly" barbecue sauce and began selling it to local stores. (Her mother is diabetic.)
Husband Trip Wagoner jokes about the vigour of the Rozyckis: “Her whole family is so energetic. ‘Let’s go play tennis, let’s go hike a mountain, let’s go start a company.’"
But it was not until her senior year, with a course on hi-tech entrepreneurship, that Wagoner’s career path began to take shape. Upon graduation, she received offers from Goldman Sachs and Morgan Stanley, both of which she turned down, opting to stay in northern California.
She joined eBay in 2006 at 24 in the e-commerce giant’s products arm, her tenure coinciding with a rocky period at the company. On the eve of a launch she was working on, the product was suddenly spiked. Such large-company whims grew frustrating. “If I’m going to fail, I want it to be because I failed," she says. “I want it to be on my own merit or failure, not because of something which felt arbitrary."
An itch to travel brought her to the division of eBay that handled emerging market sales.
“There wasn’t really a position we were looking for," recalled Gautam Thakar, chief of international marketing at the time. “She kind of convinced her manager and her team that this would be something that would be interesting for her to work on."
Thakar, who now heads Shopping.com for eBay, remembered this as a consistent quality, citing her “ability to find the right network and relationship, and be persuasive".
In 2005, Wagoner travelled to Chennai for research at the Institute for Financial Management and Research for her master’s thesis on microfinance.
Back in San Jose, she began telling friends about a nagging interest in returning to India. As a result, acquaintances introduced her to Swamy, who was running mChek and had been appointed to the post in 2007 by Draper Fisher Jurvetson, the California-based venture capital firm.
Swamy wasn’t exactly scouting for hires, but “by the time she called, I think she kind of made up her mind that she was going to come and work with us", he says.
In April 2008, Wagoner visited the mChek office in Bangalore after a trip to Dubai. Two months later, she began working for mChek from her home in California, moving to India in July.
Building a brand
Not everyone endorsed her transition from the US to India, and from a big company to a start-up.
“To be honest," Thakar says, “I actually discouraged her from considering making a move, because it sounded like she was caught up in the glamour of an emerging market—India Shining."
While her attitude may have appeared whimsical to Thakar, her family knew better. “Everything quote-un-quote outlandish (thing) that she’s ever done, she’s always done all the research," says Rozycki, who is a year younger than his sister, and a recent medical school graduate. “The way she presents her decision-making, you never really second guess it."
It wasn’t a smooth run at mChek. As head of the company’s nascent financial inclusion efforts, Wagoner found herself frustrated. On a visit to Mumbai, she was cycling through multiple meetings with a private bank. “I was just banging my head against the wall," she says. A friend connected her with the Indian Debating Union, a patchwork team that held verbal contests for students. They had been searching for an easy tool for instantaneous polling. During their meeting, Wagoner laid out the basic idea for ZipDial and they were immediately sold.
When Wagoner returned to Bangalore, the company was officially born. An invoice system soon followed and, by April 2011, the start-up had got ₹ 3.5 crore from the Mumbai Angels, five months after signing its first big client, Gillette India Ltd, for an advertising campaign. At the end of an SMS with cricket scores, ZipDial users received an advert and a feedback option for the retailer. Mumbai Angels are a group of angel investors.
Since its arrival, ZipDial has seen its space crowd, with the arrival of at least six similar competitors by Wagoner’s count. While missed-call platforms are still winning marketing contracts, the advent of cheaper smartphones will likely make the tool obsolete. ZipDial knows this and is revamping its strategy, yet when it moves from missed calls, the start-up will be taking on rivals with deeper pockets and far more experience in mobile marketing.
“I have great respect for Val—one of the few ‘serial’ tech entrepreneurs that has built successful, growing businesses here in Bangalore," Michael MacHarg, a fellow US-transplant, who co-founded the solar energy start-up Simpa Networks, wrote in an email.
In October 2010, Bloomberg UTV (now Bloomberg TV India) ran a reality show called “The Pitch". Ten entrepreneurs had to sell their ideas to investors, with one booted off each show. The winner would receive ₹ 5 crore backing from Mumbai Angels.
Wagoner made it to the final three. In her last show, investors failed to understand her presentation, Swamy says. “It just didn’t go well," he says. “Actually, I never watched that show. I was pretty bummed about the whole thing." Wagoner, he says, was in tears after the loss.
The show did give significant exposure to ZipDial, however. And seven months later, the company got its own Mumbai Angels investment.
Wagoner learned her lessons from the demise of mChek, which folded shortly after she and Swamy left in 2010. She conceded that the market for mobile payments was not yet ripe in 2010 and her primary lesson from mChek circled back to the epiphany with the debate club.
“You can blame regulation and you can blame ecosystem challenges all day long," she says, repeating an argument she has delivered to Bangalore entrepreneurs before. “But at the end of the day, somebody is not jumping up and down to buy your product."
But ZipDial knows that it needs to keep evolving rapidly. It’s currently expanding internationally even as it reconfigures its fundamental identity.
“At the end of the day, we’re not selling missed calls," Wagoner says. “Because tomorrow, everybody’s going to have a smartphone anyway and the user interface will evolve."
The company is instead striving to position itself as the “Google Analytics for the offline world" or the premier marketing platform with the fullest reach. The company is already part-way there, says Wagoner.
“Even the guy who speaks no English, doesn’t know how to SMS, has zero balance on his second-hand mobile, and lives in a village—he’s ZipDialing," she says. “And that’s amazing."