QEDBaton - Racing ahead with Milind Katti - 1801/VIJ

This article is dated 2013, and an update as of Nov-19 is appended at the end. In a conversation with Milind Katti, I learnt about his humble beginnings from Ramdurg to SSBJ to IMDR, his enthusiasm and unsettling desire to build a business, leading to QEDBaton/DemandShore, and his rootedness despite all the success that he has achieved over the years. 

Ever since college days, like many college students who study entrepreneurship and business as a part of their curriculum, he wanted to build his own enterprise. Of course, like every other dreaming entrepreneur, he had no idea about what enterprise to build. After his MBA, after working for a couple of years, after knowing the spirit of entrepreneurship still rode him, after deciding to work on the spirit with two of his MBA friends who were haunted by the same spirit, after aggressively repaying his education loans, he jumped out from his job into the world of question marks. Instances of clueless-ness were so evident in the beginning that, he once quoted a pricing at 10 cents for 1000 characters for a certain project and client came back saying, “You guys have no idea. I like your spirit, honesty and dedication. Take it at 15 cents”. From clueless-ness to building, perhaps, India’s first inside sales off shoring company which later created an impact in the demand generation space with IT majors like Infy, KPIT, Hexaware, Honeywell, Mphasis, NIIT and many others forming the clientele, Milind Katti has been on a humpty dumpty journey filled with enthusiasm, energy and enjoyment taking QEDBaton to newer heights each day.

After completing his MBA from IMDR Pune (Institute of Management Development & Research) in 1998, Milind joined Tata Motors. After working in Hubli for about 3 years in the role of an Area Sales Manager for the North Karnataka region, he decided to quit. With Rs 60,000 on hand, Milind went to Pune. His other two friends, Abhijit Gangoli and Chitra Iyer, had also quit their jobs in Mumbai and come over to Pune. As they continued discussing about the future, ideas, opportunities, etc., they discovered that certain marketing tools like direct marketing, network marketing and loyalty programs would grow tremendously in the coming years and would attract a greater number than mass marketing mediums like the print, TV, etc. They decided to start an agency to create and manage loyalty programs. The beginning discussion was a big one. The 3 partners decided to take a salary of Rs 5000 a month only. Abhijit’s father owned a flat in Pune, which was unoccupied. The hall turned into a makeshift office. Young and immature guys, they kept walking in to whichever posh building they saw in Pune and told the owners that they want to design and execute a loyalty program for them. At most places, they were asked to leave. They would come back, sit all night and laugh over all that happened all through the day. Months went by and nothing seemed to happen. A couple of small companies agreed to go in but they wanted the product before making any payment/advance. In 2002, Milind remembers stating, “Probably, if I continued working with Tata Motors, I would have been drawing a much larger paycheck today”. He says that the statement holds good even in 2012. However, the volume of experience, learning and fun he has had in the last one decade is un-matchable to monetary numbers. QED had begun.

In the mid of 2002, having known about them, Dr Gopal Iyengar, an MBA professor at IMDR, called them one day asking if they would be interested in taking up a digitization project. Milind said yes. On getting the email, Milind realized that the request had come from Peter Rogers from France. An excited Milind called his partners. They had one mobile phone among the 3 and the ones going out would carry it. He said, “Where are you? We have got a new project. We can bill for Rs 1 lac a month”. The other two laughed and said, “Come on, don’t joke on us”. Milind replied, “I’m serious. I have calculated using excel”. The other two started running back to the flat. During his college days, there were hardly any computers and Microsoft Windows was not as common as it is today. He had learnt Microsoft Office after his college and it was a distinction. Anything that would appear on the computer screen was the ultimate truth, more so if it was about calculations, no matter what logic stood behind the numbers input.

Months went by and there was no response on interest shown by them. QED assumed they lost it and continued hunting for loyalty program clients. They had started working on the program/product and a little revenue had started flowing in. They had exhausted the initial capital and now lived on borrowings from near and dear ones. On a fine day in November 2002, Rogers sent a mail asking the QED guys to meet him at Mumbai. They were happy to go to Mumbai, more because he did not come to Pune as he would have never given a project to them seeing their makeshift office which had now returned back to its state of a bachelors’ home. Considering the referring professor knew the boys, Rogers wanted to see their faces for once. After meeting them, Rogers was convinced and he sent them some samples of the work they were required to do. They worked on the samples all day all night. “We have negligible knowledge about software or a program. We sat down and learnt everything from scratch. It was like doing a BE in a month”, says Milind, “It was a simple project of digitizing all the old journals and books of a library in France. The pages were too fragile to handle and thus, they had decided to convert them into electronic format. We would receive the scanned images of these books and we had to convert them into text and further publish them in electronic format”. Peter Rogers was kind enough to offer them 15 cents per 1000 characters against their asking rate of 10 cents. Rogers knew that the same work would cost him 20-25 cents in Bangalore, QED realized this later on. “Opportunities come up in everybody’s life. It requires diligence to spot it, courage to take it up and efforts to execute it. We did convert the opportunity into a commercially successful and viable business”, Milind says.
The real courage is the moral courage, not the courage of power.
A lot in life depends on the opportunity you pick up and lot more on the one which you don’t. Way back in the 1983, Milind's father saw an ad calling for young kids to join Sainik School Bijapur, the cradle of military leadership. He had a laborious task of bringing up 4 children, Milind and his 3 sisters. Being a professor in village, Ramdurg, he couldn't afford much. On seeing the ad, his father went to a coaching center that prepared boys for the exam to seek help. The master told him that he cannot teach a 3 years class in 7 months. So, he traveled from Ramdurg to Hubli to buy a book for Milind to prepare for the SSBJ entrance examination. Milind had never read an English alphabet. His father translated and wrote almost the entire book in Kannada. Milind’s consistent efforts for the next few months got him a full merit scholarship seat at SSBJ. The spotted opportunity was converted into an executed dream. He calls this as the first turning point of his life.

After 7 years in the school preparing to join the NDA, Milind was terribly disappointed on knowing that he had not cleared the SSB interview at Bangalore. He had no clue on what to do in life. He was neither interested to know. For him, the world had come to an end. Most suggested him to drop a year and some told him that he has a week before the CET exam and he can he can save a year. Milind decided to save a year. His 12th marks were not very encouraging. However, with tremendous for the next one week, he scored well in the CET exam and thus, had a decent ranking. Those days, the average of class 12 and CET score would be considered to rank the students for engineering and medical entrance exams. He joined Gogte Institute of Technology (GIT), Belgaum to study engineering in 1991. However, his mind was on NDA. He cleared the written exam again and went to SSB Bhopal for the interview. This time, he did it. SSB Bhopal cleared him and recommended for the medical examination. The skies fell to end his dream of joining the Armed Forces forever as the medical board rejected him on account of heart murmur, a condition that forms ground for rejection. Milind appealed for a reexamination at Command Hospital, Pune but the result was the same. It took a lot of time for Milind to digest this and see life from a new angle.

The digitization project at QED ran at full rate. They took 10 computers on rent and hired 10 people. The data received in image format would be converted into text using software with about 90% accuracy. The further work involved corrected the text to 100% accuracy and adding tags, i.e., author, subject, locations, ISBN, etc., which would help in indexing the file. All this is an easy task today using advanced software. However, it was a big task in those days. The greatest problem they faced was no employee was sticking for a long term considering the mundane nature of the job. The productivity dropped tremendously after 5 hours due to the monotony. A breakthrough idea hit QED. They started going to colleges in Pune and offered the kids there to do the work. Considering that the students had nothing to do for the remaining half of the day after the college, they could spend 4-5 hours earning some pocket money. The pay per page attracted such students who were on studying on financial assistance. More work at lower cost with higher efficiency was done in 3 shifts of 5 hours each in lieu of 2 shifts of 8 hours each. “A lot of great ideas are very simple. Once an idea is recognized as a breakthrough idea, we feel it was so ordinary. In fact, most of us might have thought of it and ignored. On the other hand, most would have ignored it so much that they would not have ever thought of it. The greatest deal of energy goes in going against the standards set in our brains. They are so strongly embedded that we do not think about anything from step 1. We begin from somewhere in middle as we strongly assume that there is nothing in the step 1 or 2. We ought to understand that step 1 & 2 are the basics and foundations”, Milind says.

By 2003, QED was a 60 people team billing about Rs 10lacs a month. They were very happy with the work. While inexperience helps you to discover new things, it also leads to missing the sequential progress. QED never made an effort to move up the ladder or meet other libraries to garner more business. Datamatics, a new company, entered this market aggressively. In the next months, the business from the existing client kept drying and QED realized that they had become a low end document conversion and tagging business. Further, considering the pace at which software technology had grown, they would be outdated soon. QED had also continued investing into its initial loyalty program business where there was a little revenue from one of its bigger client, Bajaj Allianz. While diversification ensures that one business picks up when one fails, QED was up for a double whammy as the documentation business was drying on one end and on the other end, Chitra, who managed the loyalty business, called it a day. Though they hired another professional for the loyalty business, nothing worked. In the next few weeks of 2004, life turned terrible. Soon, the Saturday night parties were being sponsored by other friends. Plans were being laid down to get rid of the spirit of entrepreneurship, get married and settled down with an annuity income kind of a job.

On one such social night, Milind and Abhijit overheard someone say, “I spend so much money on my sales guys in the US and things don’t seem to move”. The world’s problems are an entrepreneur’s opportunities. They decided to barge in. “What if we call the companies in US and set up meetings for your sales guys?” the discussion began. In the next few minutes of introduction, they learnt that it was the CMO of Zensar Technologies, Subbu, they were conversing with. “Come on, this is not some insurance sales. We deal with million, billion dollar clients, not individuals”, he rejected them. He was not interested in the conversation anymore. While they were leaving, Abhijit made a point, “Fine, we can’t do it. What about the idea? This can be done from India”, and left.

Subbu gave it a thought and put it forward to the management at Zensar who asked him to go in for a 3 month trial with someone reputed in the field. Subbu, a fair guy, requested that a chance be given to QED. “For security reasons, we were asked to begin our work at Zensar’s office and we were more than happy as our office had again become null. We neither had an ISD line nor AC nor some silence”, Milind recollects those days, “Considering that it was a big risk, we ourselves sat at Zensar and started making calls. We were, both together, paid Rs 30,000 a month, a pay that ridiculed us in ourselves. But then, we knew, it’s just a beginning. In 3 months, we set 15 appointments and it was a bonanza. The other sales guys in US started demanding for leads for themselves as well. In 6 months, our team grew to 6 people and soon, we won the project and slowly, the operations moved to our office. We were breathing again. It was a second life
Truth and only truth matters in the entire run of life.
After getting into engineering, Milind had no interest, either in studies or in a career. His first semester scores were bad. Soon, he realized that life had changed. His perspective had to change. His plans had to change. Once determined, Milind had a joyous ride. He marks card read distinction for the remaining 7 semesters. While in the 3rd year of engineering, his friend invited him to come over to Mumbai during college holidays. Milind was stunned looking at the city. His friend’s father was a GM in IOCL (Indian Oil Corporation Ltd) and upon visiting his office, Milind was totally spellbound. The buildings, the furniture, the cars, the lifts and the security, everything was for new for him. Milind was advised to read business magazines and newspapers. He caught an interest in these on returning and soon, he took interest in reading business articles and news items. In 1995, after completing engineering, he joined Sterlite Industries. During his 3 months training at Mumbai, he would take the 7pm local train back home and study for CAT. After the training, Sterlite sent him to their Gujarat factory in the role of an Instrumentation Engineer. His hard work had answered. IIM Lucknow called him for an interview. However, he was not through it. In 1996, he joined IMDR to study for an MBA in marketing. While he faced numerous challenges at QEDBaton in the initial days, he was convinced of being an entrepreneur. He had decided to keep risking, no matter what happens, at least till he gets married.

The margins from the Zensar project were good. However, they did not increase their salaries. Financial discipline is the most important aspect to run a business where relationships are closely knit. A clean distinction between personal and office expenses goes a long way in building great business relationships in the long run due to the enormous trust it creates. Incentives and bonuses were accounted for till the last paisa. In his search for a bride, a few girls showed no interest and the one who married him assumed that he was lying to her about his meager salary in order to test her reaction. “‘How could someone in Pune working almost 24x7 with big IT companies as clients speaking in lacs/crores all the time make Rs 5000 a month?’ was her logic”, says Milind. Logic doesn't always work. Milind's wife, Ranjana, married him not knowing what to expect. She had to go through several hardships, at times more than what Milind was going through. What made the a big difference was that she stood behind him, rock solid, at all times as an ultimate pillar support that kept him going. When your family backs you up with your endeavors, you are at least one step ahead in your journey.

Some day in 2005, Dr Iyengar dialed in and said, “You boys are doing well. But you really need to get focus now. Don’t pick up everything that comes on your way”. For one full day, they sat with Dr Iyengar and wrote their first business document, the first business plan. The first decision was to close all that they did except the Zensar business. They had discovered that this new stream of business, demand generation or inside sales off shoring as they call it, had tremendous potential. They also realized in their interaction with larger companies that they will not enter it as it is a low volume game. This was the way forward. This was a domain perhaps waiting for them. QED was reborn. It was now called as QEDBaton. “The sales cycle is like a relay race. QEDBaton runs the first 100mts and passes on the baton to the client to run the remaining 300mts”, says Milind

QEDBaton started acquiring clients aggressively. The volumes grew at an imaginable pace. Nobody in the world refuses to take a sales lead, a filtered genuine sales lead where the conversion rates are so high. In the next 3 years, QEDBaton saw some crazy growth rates of more than 100% a year and by 2008, 60 employees worked at QEDBaton and the turnover crossed Rs 4 crores.

Another revolutionary idea that came in to QEDBaton was that of educating the employees. It was observed that the attrition rate on hiring engineers was very high. Milind experimented by hiring call center employees, train them on IT industry, the products, the software, its applications, uses, benefits and related aspects and put them on the job. After all, the entire business depends on those 60-100 calls that have to go at the dark hours with all enthusiasm to the biggies in the big nations. In most cases, the calls do not reach beyond the secretary. The results were amazing. Further, the employees were thrilled as they could re-tag themselves from call center executive to an IT sales professional after a couple of years of work. QEDbaton wanted to enhance the competencies and knowledge of the graduate employees further by sharing executive MBA costs of the employees. This way it was also hoped that employee retention and engagement increases. They also tied up with local college for the same contributing to content & delivery of the course. Though the initiative was not sustained for a longer period, it touched many lives for that duration. The incentive for QEDBaton was the employee would not leave for 3 years. A plan that worked wonders for QEDBaton.
There is a very thin line of difference between meekness and humility, between aggressiveness and assertiveness, between arrogance and confidence. Carefully handle yourself on the right side of the line and that will determine success.
What makes me happier than the plan’s working is that these guys are, today, having a great career. In fact, they recognize how they rose to become a person in demand in the IT industry in these 3 years with 3 years of niche IT experience and a well recognized MBA garnering pay packages of Rs 12-18lacs a year”, Milind says, “Today, these guys have set up a QED Alumni Association and we meet once in a year. It’s an amazing experience when people come back and tell you how a commercial entity made a difference to someone’s life. We start feeling like a social entity. One of my employees told me that he never ever imagined or even dreamt that with his BCom degree, working in call center, there is anything there for him in this world. The life’s greatest bliss and the greatest happiness, achievement or whatever you call it, has been derived by this one statement”.

Milind remembered his school days each time a discussion on education came up. He says that most of the lessons were learnt by him at a very young age and that has been the greatest virtue of his life. Fairly good in academics, Milind participated actively in football, gymnastics and athletics. Being responsible for our lives, taking risks, building everlasting relationships, sticking together in difficult times and all times, support everyone to move up and enormous multitasking skills are some value additions from his school life. “It is easy to philosophize today but those moments were undeniably awesome. We freaked at each competition. Life was a battle. But then, in moments, we were brothers. Life was comradely. Ground sports have been a big teacher in my life. Today, I have a friend in every city in this world. We cry even today when we depart after meeting and our wives are thoroughly confused”, Milind laughs, “The school alumni meets are unique gatherings. I attend my college alumni meets which are mainly to network and speak business. At school meets, you only speak love, love and love. It may not happen anywhere else in the world. But then, the speed at which needy get help from the alumni is blazing fast. Even this doesn’t happen anywhere.

2009 came in to screw the lives of every IT business. QEDBaton was no exception. They were used to 80% growth rates and suddenly, a fall of 10% was indigestible. They were running very fast and a brake at this speed results in damage. Clients remained but the engagement numbers declined as their sales budgets were cut. Firing was the new word across the industry. QEDBaton was no different. After brainstorming discussions, it was decided that nobody at QEDBaton will be fired. However, there were other ways adopted. Milind delivered a speech one day before all employees, a memorable one, “We are all in a ship in the middle of the ocean with no idea of what will happen next. Now, either 20 of us will have to get down. Or, all of us have to throw our luggage out. Of course, we can buy everything new once we reach the shore”. The employees were thrilled and agreed for no variable pay for the year. It was a moral and ethical boost for everyone at QEDBaton. “Today, however, when I look back, I feel I did wrong. It is a good business decision to have 80 happy employees after firing 20 than to have 100 not so happy employees considering their paychecks are smaller than before”, says Milind, “A great shock came in when, even after 6 months, there was no improvement. Eventually, I had to fire people helplessly at the loss of my credibility. It was a very bad phase. I shiver even today when I look back at that one day. A recession teaches a lot. It reviews our fundamentals, processes and focus. Today, we have more than 130 people on board and in case a recession comes in now, we are more prepared to deal with it.

QEDBaton now operates form KCIT Park in Pune. Having been eligible to buy an office space under the MH-IT park scheme with 75% discount on stamp duty, the company faced enormous difficulties in getting the space for obvious reasons in the Indian business environment.

In 2010, QEDBaton reviewed its business plan and decided to work on developing IT products as well. Since then, Milind spends most of his time on the products business and Abhijit spends it on the services business. QEDBaton has designed 2 products - DemandFarm and LeadEnrich, a completely new concept, and they are through the testing phase. One of these has already started flaring revenues. There are numerous software to manage sales leads. However, when it comes to expanding business volumes with an existing client, companies tend to depend on expertise of the employees to identify it. In association with MuSigma, QEDBaton is designing software to address this concern by building B2B key account management features in it. The other product the company is working on is a B2B marketing data platform using which companies can run marketing campaigns. QEDBaton has taken a big gamble by investing a big chunk of earnings into promoting as well as building these products further.

Milind started focusing on these 2 product ideas based on the decade long B2B sales and marketing domain that QEDbaton had worked on. Today they are spun out as 2 separate entities DemandFarm solutions Pvt Ltd and QED InDemand Pvt Ltd. Both the product have received first round of funding based on the positive traction from initial customers. That’s what brings Milind to Bangalore while Abhijit runs QEDbaton from Pune.

With the kind of education system and society we have around us, we all suffer from caused thinking. We need to twist our heads a little and the results will be completely different. While a corporate guy decides his goal and then plans on what resources he requires to hit the goal, an entrepreneur already knows what resources he has and his task it to plan for the goals accordingly. If you look at this way, it sounds simple. You just need to get a little comfortable with uncertainty”, Milind's statement perhaps explains a lot on entrepreneurship.
Managing success is more difficult than managing failure. Once your head is too convinced of your success, you may head for a disaster. Be humble, all time, every time. Nobody is indispensable in this world.
Update as of Nov 2019
In an image/brand makeover, QEDbaton was renamed as DemandShore, and is known for lead generation through tele in the industry. Following the focus on digital, the company has embarked on transforming itself by using email and other marketing technologies to generate leads. Eventually, DemandShore became a digital media company, and its flagship site www.martechadvisor.com became one of top 10 publication that CMOs read from. The company got into a non linear revenue curve. It was also the first company in India to build a B2B media business for global market. In Aug-18, DemandShore was acquired by Ziff Davis, NYSE listed media company. Milind says, "Life has been kind to us. Only 5% of startups succeed, and of those, 5% get an exit. The deal gave us the huge financial reward for all the risks and hard work."

The company also worked on a product named "LeadEnrich", which died a painful death. It was a great idea but wasn't executed well. On the other hand, another product "DemandFarm" is thriving now. Milind now runs the DemandFarm business as its CEO. He says, "It’s fun building another company and this time product and not services. All the learning from previous company, the financial stability at personal level make this journey very exciting. I am able to take bigger bets. I have a great team that is young and hungry.", and further in his own words,
"Sometimes, I sit and wonder about the journey from small place Ramdurg and life defining SSBJ to here. It’s unreal and surreal. "


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