How 3 Friends From Coimbatore Run Olympics and Super Bowl | The Untold Amagi Story

0:00 Banagata road is actually running Olympics for the US. >> 73% of the revenue comes from US. 20% of the revenue come from Europe and recently listed the company at $825 million. >> Very brash and arrogant sort of a vision we started off with. People laughed at us in 2016. Today roughly almost 60% plus of all of US TV channels runs on an Amagi infrastructure. >> One point in time we just said enough of this hardware mess. Let's only do it on a cloud. That moment was the transformative moment for Amagi. >> NBC, Comcast, largest media company in the world. They said, "Hey, we cannot sign the order because we want to know your financials." And I was scared because we are, I think, less than $10 million. And the deal was a $17 million deal at the time. How do we sign a $17

0:45 million deal? We were discussing, do we really need an IPO? Because >> you guys also bought back shares, but most of the founders wait for the events of liquidity. Oh, >> see, we are really Hi Shiva. Hi Basar. Welcome to the Neon Show. Okay. Hi. >> Hi. I'm so excited to be talking to you both today and I am just so amazed and so proud of the journey you guys have lived in the last many years. You guys are building a global streaming infrastructure company. Uh 70 3% of the revenue comes from US. 20% of the revenue come from Europe. and recently in January listed the company at $825 million. What an amazing milestone and

1:31 truly a classic example of you know starting a company in India and building for the world. >> And it all started with three friends in college in Coyaturur who decided to build a company that to for the next 30 years right and it should start uh in India. So like why all these three things were so important for you guys when you when even the product was not there. >> So maybe there's two parts here right? So if you look at it when we when we got out of college we were fairly clear we wanted to start. So and Shini Vidya and myself said okay let's let's go try we were like 24 didn't have anything to really lose if you will. So we said let's go just try something. We didn't have a product we didn't do anything about it. Right.

2:17 When we started it was a more of an unconscious. The first company that we did which is was called impulse soft >> was a unconscious venture. What I mean by unconscious I don't think we were thinking about we were just young folks trying to do something together. Came together and said let's go do it. We didn't think about the future. We didn't think about what's going to happen and all of that and uh obviously 5 years later we sold the company and uh I think so we didn't know why we were building it. We didn't know why we sold it. to some extent it was but at 29 we had actually exited our first exit has happened and we're trying to figure out what we want to do in life literally >> at that point of time I think we started becoming more conscious about we're going to do a second venture >> then we needed for legacy and longevity and wanting to build something much more mindful so that's the reason at that

3:03 point of time we stopped and said we will actually first understand where we want to go as individuals as well as from building institutions rather than trying to look at what's the business plan what's the idea those are all coming next but the value system and the reason why we're doing this has to be fairly clear that's where we started this whole thought process came in >> so basically when we started working in TI and after having understanding of how software is being built you know how can you contribute what can you do soon we understood that we can do products for the world that was very clear to us after a couple of years in uh TI we call it STI so I think after about 2 three years he came and asked saying that uh it's my dream to build a new company and uh you know I want to start something here I want to be an entrepreneur you guys want to join me so

3:50 we said that uh why not definitely let's do something so the whole thing was about trying out new things so while from the external point of view you feel that oh I' they've left a cushy job the way in which at least I convinced my father was what big deal if this doesn't work you can always go back so but let's try so that's how we started >> and then you both were already reading when the first comm was started. >> No, we were not actually. Uh I think uh we were good friends in college. So didn't even I don't think we ever had any sort of relationships literally were like friends. I think once you came to Bangalore then we thought starting together and actually we got married after our first startup was founded. So it was not a >> this was also Baser's idea. >> This was both of

4:36 someone else also asked me who proposed first. In fact I didn't know. So, so and then the marriage happened after the acquisition. >> No, 2001 we got married >> in the midst of the journey of when we started actually. So, companies >> and then uh tell me one more story. Uh I was reading about it that uh when you guys sold uh the first company Impulse and when you were brainstorming about the idea and you were sitting in the park and a palist came what was that story interesting for our audience? Yeah, essentially in 2008 we were like uh we had quit the company which we sold and then we were coming out of the company which acquired us. There's a company called Surf which acquired us and uh Vidy was pregnant with our second son and u we were kind of starting to

5:23 debate what's the next one that we want to do and we didn't have a space to go. We didn't have an office to go. So we used to sit in a JP nagar there is a mini forest park. So we used to go there in the morning, sit there in a bench there and uh spend half a day debating what's the next thing to do. That was that was our real routine in some sense. I remember on a Monday morning we were sitting together. Three of us uh again we like heated debates about why we should do things and uh obviously all of us have strong ideas in life. So we kind of discussing and debating and uh to a point where we were discussing about targeted advertising. We were thinking a targeting is going to be important and we were kind of debating. >> Yeah. And that po at that point in time a small young boy walked up and he was like talk starting to stop us saying I thought he he thought we fighting with each other he wants to stop us but some

6:10 extent he stopped and I said what what do you need and he said no I'm actually a palist and I can actually tell you a future like we're really debating something interesting so don't worry we don't need it thank you then I stuck what why think about that that boy he understood that if you are 11:00 a.m. on a Monday morning sitting in a park. >> Yeah. >> Three young people literally you're jobless. That means you better know your future. So your future is completely uncertain. That's the reason you are in a park at this point in time. He's targeting us very well. So he knew that you need your future. So that was the kind of a >> you got the validation in the park. >> So I was telling them say here is what targeting works of a person. >> How much time did you guys take uh after the company got acquired and before? >> We had a two-year deal with them. couple of years we spent with them and

6:56 pretty much after that we left. >> So after the transition uh we left and then we started debating what to do uh right and then we started a market >> there was always uh this clarity that you guys would start the company together. >> Yeah. Yeah. We told them up front when they acquired saying >> three of us also always like feeling that I think we need to do together always we've been like that is something of a almost unwritten rule at least three of us had that whatever we do >> and how would you uh divide the roles and responsibilities because I remember Vidya talking about it in one of the interviews that initially there were no roles designations in the company >> in Amagi we had no roles designations for everyone basically it will only tell role was there designation won't be there. It'll never say VP or anything

7:43 like that including the founders. It'll in fact my role is basically I'm an engineer. I I love to solve problems. That's all I had written. So, so yeah. So between the three of us, he's the dreamer. He dreams and he comes up with an idea and for him once the idea is appeared to him and you know he kind of does all the mental thing and for him it feels like done. For me I have to realize the dream >> then it feels good >> and for Sini it requires um you know a numerical analysis has to be there. Business should make sense, right? >> Business should make sense, right? And uh he is a number man. >> I'm a person who needs to do I need to do and see it work only then I'm happy. He is the one who envisages the ideas.

8:30 This is how I mean we didn't really say that Basar you do this shini you do it but eventually it became like this. Yeah. But if you come with the idea and you have to convince the other two people, doesn't it feel, you know, a baggage on the shoulder? What if I it goes wrong? >> No, no, we have done hundreds of >> debates and it'll get >> No, it will always we have done hundreds of mistakes as as a team, right? One unwritten rule that three of us have between us is very simple. Once we align on doing something together, we will never blame each other for what we do. That's like a what it doesn't matter who what decision we make we will all make decisions we'll make mistakes but always the three of us will back each other in does not matter what it is all about go together in whatever decisions so that

9:17 we'll never have this uh you told me we did it not because we've always been that way and that's a unwritten rule in the way we operate >> and we have no fear to discuss an idea in fact what we used to do was we'll discuss an idea and we'll see if that idea lives with us for one week 2 days, 2 weeks, 1 month, then it's something that's worth pursuing because uh if it goes away after some time because you found some problem then it's not worth pursuing >> right can you recall some of the fights or some of the disagreements that happen >> not so it happens pretty regularly I can tell you the reason is they are distinctly different people uh by definition and uh I can tell you when we were kind of uh pivoting the company in 2016 wanting to do this whole cloud-based approach of broadcasting and all these things we're trying to do I I

10:03 remember a conversation shiny vid and me were discussing and we were proposing saying we'll do cloud play out and all of this and shiny as usual went and looked at the TAM came back said the total market size is $10 million what are we doing here sort of >> argument with him >> and Vidya saying how will it work in the cloud we don't even know and uh I was of the view said hey I'm able to imagine it let's let's try worst case we're going to fail but at least let's try and I think fortunately all the three of us said okay let's go because the choices were very less anyway Okay. So we said let's go about building. >> This is a very interesting segment. I'll talk about it in detail. But uh before we talk about Amagi and this pivot uh Basar if you can just give us some sort of elevator pitch like with the biggest

10:49 achievements you guys have had at Amagi. >> Okay. >> So little bit of introduction and then the achievements. >> Absolutely. Absolutely. Amagi as in we are a media technology company. uh from founding days I think we started with assumption that we will build something which will disrupt a market whatever the market we get in we should disrupt it should be large enough and it should be for a long time that we should be able to build this as a kind of an and we don't call it a corporation we'd like to call it an institution and I'll come to some of the value systems that we follow and why we kind of treat it that way so that was the first uh thing that we started off with amagi started in what's called geoargeted advertising on TV which essentially meant that if If you're watching a Z or a colors in the in in 2010 12 time frame for example you

11:36 would watch same ad spot if you're in Bangalore you will see a different ad what you' see in Mumbai or Delhi or a Punjab or a UP. So the idea was that we split the satellite beam across the country. So every part of the country will have different ads on the same ad spot. This is the core idea that we came in with and uh obviously it was crazy as hell. People said it won't work in India because of the complexity of cable and satellite. it won't work. People don't pay money. A whole slew of uh nos that was there in that sense. But we kind of being bullheaded. We said no, let's go do it. If somebody says no, it's actually exciting for us to >> go about it. So we took that as a challenge. The next six years we really launched the company and actually do it >> and I feel very proud of the what we could build as at that point in time in

12:22 tering because we built India's largest targeting infrastructure. We had the likes of Unilver, Vipro, Glaco, PNG, everybody operating on the platform. So that is a big big uh milestone for us for a reason. We had to pivot and we'll talk about it later. But that's a great milestone for us. When we started this part of the business, which is the new Maggi, what I call the 2.0 version of it. We started with the fundamental assumption, very simple assumption. If you look at any media business, for example, there is a camera on one side and there is a TV or a screen or a phone where we are watching content. We naively so started with the assumption that everything in the middle should not there'll be no hardware in the middle from the point of a camera till the point of the TV set. Can we take everything as a software infrastructure on a cloud that we can actually run the largest TV networks in the world very

13:08 brash and arrogant sort of a vision we started off with people laughed at us in 2016 but what's happened in the journey and I think we have also been lucky and fortunate of the journey the industry started changing and the industry started adopting cloud infrastructure over the years example two big changes that we've been part of one is called fast which is the free ads supported TV as a model started coming up in the US in 201617 time frame. We were very fortunate to be in the right place, right time. We became the technology backbone for this whole industry. Today roughly almost 60% plus of all of US TV channels in this whole thing runs on an Amagi infrastructure in the back end and that's been a again we got an Emmy award last year for that where the TV industry

13:54 worldwide actually awarded Amagi as a pioneer in bringing a technology which actually changed the industry and that's coming out of an India and coming there was a very a good proud moment for us for our teams and engineers who built this whole capability for us. Second thing that's interesting happened is 2020 uh the TV large TV networks worldwide started to wanting to change. Uh we started working with NBC Comcast which is the largest media technology media company in the world wanted to move to the cloud and uh for some reason they decided they will work with a small company out of Bangalore to kind of go through that transformation journey. U today I'm proud to say that in the last five six years we run Super Bowl for

14:39 them. We ran the Olympics for them with all the window Olympics. So we've become the backbone of this company in terms of all their live and linear playout systems today for example. >> So like I think uh one of the investors is telling me that Banagata road is actually running Olympics for the US to watch Super Bowl to watch. >> I think that's that's been a fascinating journey for us as a company. Obviously I think in a we in a very early phase of the transformation and we're extremely excited about the next decade of what's going to happen. So the public going public was a milestone as well for the company which I think is a is we thought it's going to be a normal we didn't obviously we when we started the company uh slightly uh over arrogant we thought we will actually be public that's no big deal >> but that didn't happen for a long time because we had to go through the pivot

15:25 >> but I think it was a very good humbling experience to get there do that particular milestone but truly we feel much more responsible now for the next 10 years in building this capability that's where I see >> and why do you say It's you're still very early in this journey. I remember you talking about that um u it's just 10% of the market that you guys have captured so far. Can you >> Yeah. So the basically if you look at it the modernization of this see these are all all these industries which have been legarddition adoption technology are moving through a giant transformation a transformation where hardware and satellites and OB vans and everything that you see as a lot of infrastructure in television has always been very hardware and people driven that is a big change happening in this industry where everything is becoming softwaredriven we truly believe that it's in a very very

16:10 early phase only just 10% of the largest TV networks in the world have moved to the cloud Yeah. >> And there's 90% worldwide and this is a television is a global business. So all of this has to eventually transform to the cloud and we truly believe we have the right to win to kind of build those capabilities and that's the reason I think next 10 years is extremely exciting for us as a company >> and uh um let's also talk about the pivot that hap you guys did in 2018 right >> yes >> and uh so the whole geo tagging technology you worked on from scratch right you built uh the whole technology from scratch so when he said that let's just move to cloud business. How was your reaction to that pivot? >> No, no, we he was saying it for a

16:57 reason. So the reason which he said we'll describe later, I'll describe it now. The biggest challenge with the geo targeting business was that basically it was cannibalizing the business of the TV networks. So let's say I'm a TV network salesperson. I had gone to uh GSK and asked for the deal for Nationally. Now GSK was saying no I need only Westbol and Tamil Nadu and I can take it from Amagi. >> So it was cannibalizing their own business and they started giving us a lot of constraints about whom to sell which uh agency to work with and so on and so forth. So at one point we felt that the business will not be as profitable as it should be. So at that point we had no other choice that we were left with except to you know try this out globally. By the time we had gone to I think one show one or two

17:42 shows in the US uh uh broadcast shows uh where people come and look at the technology and there was a reasonable interest. So that's what he was trying to pick up. So while it hurt us like basically we had built a sales team which was doing the sales and we had to let go those people. It was a painful exit for them right like but the point is that there's no other choice. We at least have to try the second one. So we took it it was difficult but we took it in a wholehearted way and we decided to try it in a wholehearted way and the good news about the second part that Amagi 2.2 is that when we did Amagi 1.0 itself we were doing everything on the cloud so therefore adopting the technology into the new products that we were trying to do was not such a big challenge. >> Yeah. >> And what was the scale of the business before the pivot? >> Old business is roughly about 180 crores

18:29 of business. So it is actually so we didn't pivot when the business was not doing we were pivoting when the business was >> doing well doing well. >> That was the most difficult part. Right. >> Correct. Correct. And again this is like see we had raised about almost $25 million by then. >> Okay. >> We had spent $20 million. We had $5 million at the bank. >> Yeah. >> I remember the distinct conversation that we went to the board and said we want to shut this business down and we doubled that business that year in terms of revenue at least from a topline standpoint. But like what Vidya pointed out all the structural deficiencies we felt if we are going to run it for the next 30 years we knew that this is not a structurally solid business design that we were actually doing because we were dependent on three large TV networks uh literally being a mercy of them in terms of cost structures and all the

19:15 compliances. So that was fairly clear to us that we have to pivot but I think our board was like we had a thesis on which we actually put the money was that that and we had $5 million in the bank. We told them we're going to really pivot to a business. They said how big is that business? It was few crores. I think two three crores if I remember right. >> Yeah. >> And it was a hard conversation but I think good news is they trusted us. Eventually they trusted and said folks you know it best and they knew us that we obviously we had built it for the last 8 years by then and we were actually saying that we'll kill something for what we did for 8 years in our journey and restart from scratch and obviously we diluted the whole business both for ourselves and obviously for for them they thought it's a right off literally and and uh they said hey we cannot put any more money in the

20:01 business because we don't know your new thesis. >> Yeah. uh we said no no no we don't need it we'll take the $5 million rebuild the business again so we went back pretty much as a startup some extent after eight years in the journey >> so we didn't raise any new money just use >> we didn't raise money at all we we said we will sit tight we'll just move everything back uh >> so that's why you had to let go of the team otherwise you would have kept them >> no that they were actually local sales people who are selling >> ades sales so we cannot I cannot use them that is the reason we had to so the engineering team remained intact >> uh but the but the people who are involved in operations and the sales had to be let go. >> How big was the team that time? >> 120 people. >> Yeah. 120 people. >> And now how big is the team? >> People, how many of them are in Bangalore? >> 700.

20:46 >> Uh 7. Yeah. Out of Yeah. >> Yeah. 700. >> 700 plus. >> 650 to 700. >> 650 in India and rest of them are Europe and >> Europe. US. US is big. I think almost 120 people in US. >> Okay. And then just u maybe if you can talk about more more about this part that you had $5 million in the bank account and then what happened in the next few months. >> So I think first thing is obviously it was a emotionally hard moment for the team because I think we had a fantastic team. The team actually had put all their heart soul in to get this where we were as a company. So these they were more friends and family for us rather than actually employees in some sense. So we had to call them and then say you know what hey we've tried this at this point in time you know the hardships we're going through as a company you

21:32 know and so it was kind of a bittersweet sort of a moment for all of us even today they're all good friends and we kind of talked to each other and so we had to first get that done and simultaneously we had to build this business to start off with >> the first princip we went back to first principles and said let's get first we had to bring the cost structures down to where we could afford it number one number two we needed somebody in the US because we were all in India at the point Shini everybody's in India so the biggest call I think so we got Shini to take this because Shini was always a go to market person so he had to uproot his family completely like what I'm sure all the founders do >> had to take them back and he had kids who were in the ninth grade and sixth grade for example at the point in time so they've always they were born and brought up in India but here was a

22:18 situation that we had to do so he took that call to kind of pretty much approve the family from here take them to LA settled them down. We didn't even know how big the business was, but we had to take that call to do that and settle and kind of completely new lifestyle that he settled in there. For example, fortunately he he went to LA where I think that the time was timing was right for the business. As I told you, the fast the free ad supported model was starting to work. We found that to be the right place, right time where we could be the technology vendor and uh that was the moment I think we felt okay now we got a product market fit of some fashion. So I think uh good news is obviously three of us are pretty much operating the business literally in that sense we were kind of hands-on the company was a 40 50 people team at that point in time we had already become small so I think uh that was the core of

23:05 the business for us to kind of start restart the journey for all of us and start rebuilding it so every night he used to call and then Vidya and Shini used to talk about what to get done the rapidity at which we could deliver things our customers are surprised because by 20 we used the leverage the 24 hours very well 12 hours discussion and then shini used to call in the evening late night the team starts building things out next day morning when shini is there he actually got a product which he can actually show to customers so that is the sort of agility that we could show I think made a huge difference in terms of our own success I think sacrifice of trainy to go there and do that >> and the ability for the teams to do it I think it's been a great journey >> and how old you guys were when this um pivot happened >> we had already I think we had spent 8 years I think 29 30 we almost close to

23:51 40 right to 35 yeah 37 to 40 right so >> at the time most of the second time founders start >> pretty much >> the pattern I'm seeing >> and when the next round of funding happened >> so what we did is we with $5 million we actually became profitable as a company by 2020 uh I think uh we had become we were doing about $20 million of business year after >> okay wow >> so we like from zero we just kind of rapidly grew and again the company was pretty much doubling and tripling and some of the time. So we were kind of growing in given the size of the teams and others we were already profitable as a company. So we didn't actually need money. >> Yeah. >> Technically only reason is in 2021 I think uh our investors who had invested in the early part of the journey. Obviously timeline had come where they had to exit.

24:37 >> Yeah. >> So couple of those investors came back said busar I we love the business what you guys are starting to look at really looks interesting but we cannot our journeys have to end here. So incidentally in 2021 early 2021 we did a deal with Axel Norwest and others only as a secondary transaction we said we don't need the money so we didn't take any primary in the company at that point time we said if you want to they are ready to sell folks can buy we're not going to get involved in the business right that's where it is when they came in I think before that in the next 6 months we had actually already doubled the company had started becoming almost $30 million plus at that point of time I think uh we all sat together and said okay now looks like we and build a a billion dollar company at some some scale that we could potentially build. Is it important for us to go look for

25:22 some sort of money to be raised because that will help us to kind of expand the team? We were like having seven people sales team which is driving a $30 million AR business. >> Wow. >> So it is I don't know sometimes super efficient sometimes it also burns out people >> and we had a team which is very small in India as well. So we didn't have a next level management teams at all. So at that journey is when late 2021 and 22 is when we raised capital uh largely to kind of now fund the business at the next level and that's been the journey we started off. >> And how big was that round? >> First one we did about $100 million. The second one also we did $100 million but I think partly there was also secondary because we wanted our teams to also get money back because it was almost a time to kind of give back as well in some sense. So we did that in two rounds and then uh I think about $80 million plus

26:09 80 plus 80 almost like uh we had about um almost 150 $150 million of primary capital came in $50 million was all secondary. >> Okay. And it uh if you can talk about the next phase of the growth after this funding uh happened. >> So after the funding happened >> like how did we use the money? What all happened? So obviously see we uh the we had more money than what we could spend even today and that's the way the company's been like one is we've been always a very capital efficient company because we are a always a software company doesn't need a lot of capex in some sales and we didn't need a lot of marketing because it's a vertical um business that we are in our biggest costs are people and nothing else literally right so that's the way the business has always been so although we raised I think one raise that two raises

26:54 we did out of which I think close to $100 million was in the bank even when we went public. So, so the money was not even used in the whole system. For example, >> having said that the first thing we did is to obviously build the next layer of management teams. >> So, we brought in head of sales, we brought in engineering teams, engineering heads and all of that. We kind of started building the next layer of teams for example and that was a two-year journey where we went through again we took a loss business because we had to build that whole capability and capacity building that we did after which we again came back to profitability. So that's the only space where we actually spend the money and else we are like coming from middle-ass families and we are like at some point we not a very brash sort of uh we don't spend a lot of money in most things in life so it's literally getting office to a point where it actually looks good for

27:40 everybody to work and getting things done. So we like really uh basics are covered I think we are happy with that sort of stuff >> and uh before uh the IPO happened company was valued at I think some 1.2 2 billion. >> Correct. >> And the IPO happened at $825 million. Correct. Correct. >> So if you can just talk about that. >> So essentially if you look at it going public provides the liquidity. There's a liquidity premium in India. Right. So it's important. >> Um again as if you look at the go the genesis of why we did the IPO. See our investors none of them wanted to exit because they're like they were just four years or some of them are only three and a half years into the IPO into the company. So none of them wanted to there was no exit pressure for anybody to do it fundamentally and there was no exit

28:26 pressure for us as individuals we like I think they're well settled I don't think we needed any sort of stuff exit or liquidity to that extent right so the only biggest motivation that we saw is for our teams and employees who kind of struggled with 1.0 to and a two through cycle and we had people who spent more than a decade with the company and the the emotion I think I think Vidya pointed out the emotion when we started three of us are discussing and I remember sitting in sunny >> should we do IPO >> Sunnyale we were discussing truly do we really need an IPO because the company is profitable we're growing our investors are happy there's no good reason to go IPO should we do that at all fundamentally right and we don't have this ego trip of wanting to be a public company so have that as well and we know all the challenges if you're a public company. So we kind of understood the balances. It was very balanced call.

29:13 The only big emotion I think when Vidya pointed out was hey our teams need liquidity eventually these people have been with us for so long. How do we enable them to buy their houses and car and whatever they want to buy in their stuff and at least have a legacy for saying hey I worked at Amagi I got something done with this whole thing is an important emotion. I think that is the core emotion that drove us. The secondary part was our customers are starting to become larger and larger. Enterprise customers starting to come for them. They wanted the longevity of these because our our business is an enterprise business. So people want to feel comfortable that you have you're going to be for a long time. public provides that credibility, the transparency and eventually the respect in the industry that hey here is a company for longevity that we can trust with our infrastructure because these

30:00 are mission critical infrastructures we run for our business customers and uh I think in that sense that was a real decision process that we went through >> and you guys also bought back uh shares right uh but most of the founders wait for the events of liquidity right? No see we are really this for us is we're leaning in heavily this we would have loved to have more shares as a company technically as a company I think we truly believe strongly the next decade is a transformation and again we the conviction is extremely high and that's the reason we want to lean in we if you look at it we didn't liquidate any not a single stock in fact we had a challenge even getting our investors to liquidate the stock because they knew that the business is actually doing well and getting through so it's always been a that's that's journey so high conviction

30:45 is a very important part of it. We want to lean in and do things because we truly believe there's a big opportunity in front of us to kind of build it out. So that's >> and then if you guys can talk about the version 2.0 like um if you can break down the business model of Amagi 2.0. >> Okay. So if I look at it so fundamentally it's a software business. We are providing software to a TV channel. So think about any TV channel today for example when they want to create a live sports or a news or or entertainment channel today for example they buy hardware they set up a studio they say take their cameras to all the field they bring what's called an OB band it's a satellite which actually captures all the content and the cameras sends it back to a production center and

31:31 the studio is in one location where you create all of this and eventually send it to homes through distribution either through satellite or or through IP networks or internet that we all watch content for example it it involves a lot of hardware and real estate which actually drives this business what Amagi does today is to convert that into software and when we converted a software the biggest change we did was start it was a capex intensive business you have to buy all these equipment create all of this what we did was to convert an opex business what do we do we lease cloud from the likes of Amazon and Google and others We host our software on the cloud and we pay money to an Amazon on a per month basis. Similarly, our customers paid us on a per month basis. So, we made it a

32:17 subscription model for the business which allowed them to pay us on a per month basis and we are able to kind of obviously the transaction is where we pay for the cost of goods or in this case the cost of the servers and the software for the cloud that we pay. That's the core business model. So suddenly customers can launch their channel, run live sports and news by paying on a per month basis. Although contracts are longer periods, but they're paying only on a per month pay basis. That's the core big change that we did for the industry. And this is our genesis of SAS that's been there in every other part of the business for for the broadcast world. We brought in the idea of SAS of how they buy software and and replace that hardware with a software and a and an opex sort of model. That's the big change we brought in >> and uh like we talked about before this

33:03 conversation started that 73% of the revenue comes from US and uh the the kind of logos we have at Amagi. How how do you convince them? Because uh this is the advice uh B2B founders keep hearing who are building for US market that you have to not just the tech team can be in India but uh for a business team you have to be in US. how hard uh it is to sell to US uh market and the kind of logos you have being a local uh company >> two parts right so >> and how was it before and how it has changed now >> it's changed dramatically and I can tell you right so if you look at it early days I think we were a see nobody believed that a company out of Bangalore

33:50 will be in broadcast tech we were never known for tech and more importantly broadcast which is like a very missionritical software technology So I don't think anybody thought that a company out of India would actually kind of be able to support them and run the most critical workloads ever. Right? Two things are happening. One is I think given Shini was there I think it helped us to create create the presence of saying hey we are local we are we are in the US >> and we have and people understood this whole idea of having GCC sort of operations environments in India. So there's not India was not at the place where people thought uh it's not something that they didn't know. They knew that India existed. So they treated us as a somewhat of a local sort of presence to that extent that helped a lot. And I would think that having a

34:36 founder having that presence is super important. If it is any other sort of a hey another head of sales there you wouldn't bring the emotion the passion the ability to convince people. I think so founders being there was a super important part of the journey for us. I think from a success I think that is a very critical part of it. Number one. Number two, if you look at it is no no large broadcaster decided that they'll work with the Magi in one day. So obviously it was a big journey for everybody to go through the process. Uh what changed is obviously the industry change forced them to look at it and what we've seen and again this is something that we learned over the process is the uh we follow a book called the crossing the chassis. So this is a book by a person called Jeffrey Moore right he talks about a mechanism of a almost a Gaussian curve or a binomial distribution curve that you see

35:22 is the way how industries perform there is the early adopters in the first part of the graph uh visionaries early adopters pragmatists and legards that's the way the bell the bell jar is replaced right obviously the early adopters and the visionaries >> are people who are irrational in decision-m process so it's important And I think we were kind of lucky to work with companies and the CTOs and the decision makers in the companies who are irrational to some extent because if they had start calculating numbers assessing amagi as hey is it x to y I put an RFP figuring it out we wouldn't have crossed any of these milestones literally right these are people who felt hey here is coming in and actually

36:08 talking to me I feel the passion with this person they're delivering things in my PO and stuff at the speeds with which I've not seen with my vendors. It's worth a bet. I know it's irrational in my heart, but let me take a bet and look at it. I'm not going to give the highest workloads to start with. I will give my fringe projects to you. Show me what you can do and then let's see the whole process play out. I think that's where the journey starts. And we were really happy to lap it up. We said, "Okay, let's let's get into these large organizations and demonstrate why we can be world class and do that." But the beauty is we could we're able to quickly get through that ramp curve of trust. Right? Today some of our customers run tens of billions of dollars of content through Amagi's infrastructure. Now the sometimes and I feel I joke to my

36:54 customers that the tide is turned where they call up call me and said hopefully you guys are clear because you are you are the backbone now. >> So we would we you cannot afford to fail. We cannot fail today because that actually will be a big challenge for that example. And now the brand the trust is so high in the industry today. For example, I think uh we just came from a show where I think all the top tier customers worldwide could wanted to be at Amagi where they said okay I want to meet these guys. Looks like they've been always innovative creating new things big trust. Obviously that's been earned over a decade and fortune so matters luck is matters in all of this being the right place but also being choosy about which customers you start to work with who can kind of carry you in the journey. But for us, I think our biggest success is our customers who

37:39 actually took us where >> who were these early customers? >> Uhhuh. >> Who were these early customers? >> Early for example, NBC, Comcast, I think they took a took a bet. I think >> 2019, they decided to start the project with Amagi. >> I think that was a big bet for them as a as a company. If I'm NBC, I think they were like uh I remember the day they said, "Hey, we cannot sign the order because we want to know your financials." And I was scared because we were like we were I think less than $10 million and the deal was a $17 million deal at that point time. >> So we're thinking I have the whole company $10 million. How do you sign a $17 million deal? Then I remember going to PremG invest who was one of our investors to get a blank pretty much a blank commitment from them saying they'll support the company and I I had

38:25 to give that letter to NBC saying you know what trust us we have backing which is really solid obviously we had to bank on PRG's brand and GG's invest saying that they're ready to back the company for whatever time and get it done right so because their finance teams and procurement are saying who are these guys like >> where are they coming from and why are you giving them projects to them right so that's So some of this also about the the journeys was a lot of these moments where were lucky moments to some extent having the right people made a lot of sense. >> I want to add something. >> Yeah please. >> So basically um yes founder presence is very important. The customers were coming to us but media is a very brutal operation. Right. Imagine you're watching a match and something goes blank. >> Exactly. Right. So actually our customers were very scared. Initially Swini I was running this pre-sales

39:11 customer sex all of those. Sushi used to tell me that you know I need people in the US. I need people in the US and I used to say no no no we'll do it from here we are available 24/7 we are available in midnight but customers were never convinced that that was really true. And then slowly I I turned and then you know we hired a team we set up a customer success team we made sure that people are there. They saw the commitment. They saw that there is some phone number to call locally and somebody will answer me if there is a problem. Once that trust comes that is when you know uh people start trusting you a lot more and uh things become easier. So we we built a reasonable size uh you know GTM team uh uh in >> and what are the other customers we have? >> We have 450 customers now >> for for the top number names we have Sinclair is one of our top customers

39:58 Lionsgate uh Don they are actually the you can say call it them as a Netflix of sports they're based out of Europe. Um then um A+ C which is now called Hurst Networks, the History Channel, Fox >> Warner Media, >> uh Warner Media, Discovery. >> Uh >> how do we sign these contracts because this is such an sensitive uh you know job uh because like you said, if a second of screening goes off, >> uh it's a total mess, right? >> So they act they also take a lot of time. That's why closing some of these deals take time because they also go through a process wherein they look at the technical architecture they they compare they do a proof of concept they ask you to show the redundancy switch off one region and show that the whole thing works all those they would also do

40:45 and um and then you have to give the SLA commitment and make sure that you stick to the commitment on a monthly basis to ensure that the product really works the way in which it should. I also remember you talking about this part in detail that uh uh there are some other clauses also in the contracts. If you can just talk about those clauses also >> there'll be a lot of clauses. So like first time when we had to do this SLA I couldn't understand actual meaning of 99.99. >> So 99.99 means of of a whole month. So you take the number of seconds then you take like point not not one say one one of the total seconds that's available right that's about I think 99.99 will give you about um 30 seconds right >> no 99.99 is 17 minutes you have like

41:30 less than two we had about what 2 minutes was the downtime that we could do in a year for 99.999 so we had a fine >> finite class with the customers so all of these you need to understand and you need to make sure that you know you put in the thing which is uh which is something is achievable physically achievable >> and if you mess up with that >> no largely two two two parts right so customers uh when you write a contract typically customers are wanting to protect themselves so that's what it is but what we've seen realistically is customers are really wanting to know your intent and obviously we've never been fully perfect ever I don't think any of us could be perfect and they didn't expect us to be perfect as well all every time they want to know intent wise are you

42:16 going to go solve these problems for us and actually become better right so as a company if you look at it one of the value system that we really aspire is called be vulnerable vulnerability is a very important uh trait for us as a company not only internally between our our teams and leadership and everybody else but also with our customers with our customers we always have a relationship where when something gets screwed up we call them and say you know what we screwed up we would never give them saying this is something that we should have done we have not solved it it's our problem we will go fix it and proof point is obviously we fix it and demonstrate that we actually fixed it so trust gets built when you go through this process in fact I remember some of the enterprise customers came in and asked us the first question they were asking us is how many

43:03 times have you gone black on the screen the the naive answer is if I told them >> never they wouldn't have signed the deal they told me very clearly if you had told me never I the the Hey, I would say not because you you are telling not telling the truth, but we would believe that you've never done real broadcasting. >> Yeah. >> Cuz if you really done real broadcasting, nobody gets it without a black screen. So, everybody goes through the process. The question is how did you come back and recover and what you do is much more important for us or somebody naively telling them that it'll never go black or it'll never fail for example. Those are all in a complex business like what we run today. It's the ability to know that failures will happen but ability to recover from those failures and more importantly fix them forever so

43:49 that you don't come back. I think that's the success of all of these systems because the systems are becoming more and more complex on what you're trying to do. >> And so far we have talked about uh the crucial uh milestones of Amagi the pivot happened and how did we decide for the whole IPO thing. What are the other five you know major decisions you guys have made? I think uh I think the first decision of starting together at a Magi as I told you one of the first thing we did was to what are the tenets that we would like to do because as you said the big decision we made is next 30 years we'll try to build it I think that was a decision which I which is a very deep decision not easy um I think at some point we also thought we will be successful which which didn't happen in

44:35 the first first part of the journey so it was a decision we stood together and it's not like at pivot level we said okay now oh it's not working let's let's get two quits we didn't do it three of us said no let's double up and let's do that so that is a very important decision we made at that point in time we also took the decision to do something in India for India at that point in time that is a decision we changed in the midst of this journey for the business dynamics of what it was but I think we kind of stood with that decision for a long time and at some point I think I remember one of the investors in the middle of the time when we doing India business um we were trying to raise money. We were talking to him and he said I think guys the amount of work that you're doing in India is the same thing if you do it for any other country. You would have been a

45:20 much more successful business than what you're trying to be in India. Why are you guys wasting your the prime part of your lives trying to do that? I think we heard it but we didn't want to we didn't want to pivot. We said no no no it's happening in India. We'll make this work. Right. So that is the second part that I remember as part of the journey that's important to look at it. Right. The third is the pivot itself which is a big uncertain event for the company and uh we had to take a call to drop something which looked like success because revenues are growing in others and yet in our minds we never thought we'll be able to build a long-term in a 30-year view. >> Yeah. >> That 8 years was worth sacrificing to some extent and 8 years is long. So lots of people felt we are illogical and irrational at that point in time to take a call to go to a very small business which never existed and try to build it

46:07 versus try to take this. I think that is the third big decision that I feel truly about. Right. Fourth, I think Shini always comes back and tells me that by shrinking and making something more focused helps you rather than trying to do too many things. >> Mhm. So when we started the new part of the business, the first thing we decided that we'll do only one country which is US we'll only do one product we'll only do one cohort of customers that we'll go to. So by sharply focusing ourselves not trying to do oh what happens it doesn't fail we said okay it doesn't matter we'll put eggs every egg in that basket make sure that we'll make it successful to an extent till the point we know it's not successful we move but we'll do that actually I think that was a critical stuff where we could

46:53 just truly by f focus brings a lot of strength to the whole thing because everybody in the company is focusing on one thing one geography one time zone that we have to manage one language to worry about one standards everything was like much more sharply focused. I think this was a big learning for us as both as three of us as founders as well as for the company itself how focus can make worldclass companies get built completely. I think hindsight that was easy. >> Uh at that point in time it is scary because you're taking everything and putting in one basket. Would it all fail? What happens? You'll be back to the drawing board to some extent. Should we do three things, two things which you can do it? I think at that point in time trimming it and saying we'll only do one thing in one geography I think is a big decision that we made as a company literally. >> You also wanted to add

47:39 >> yeah actually there was one technical decision which we took. For me it looked like the biggest thing which changed the history of the company. So in the first phase between 2008 2015 when we were building we were using the cloud but we had to install hardware in the in the we call it as hidden the cable center where where the splicing happens what Bosco was saying the splitting of the satellite beam happens and then later on when we decided to pivot in 2016 we started with the Intel servers wherein we were putting the software I still remember a lot of time where we have to take the box go inst install in a in a location where they are transmitting the signal and all that. But at that time one point in time we just said enough of this hardware mess. Let's only do it on

48:26 a cloud which is basically as he explained renting data centers in the cloud from public cloud companies like AWS and Google and doing it only in the cloud. We took that bet and we ran the 247 running linear channel on that and then we started pushing that to the customer. That one moment was a transformative moment for Amagi. That is how the cloud-based SAS solution came in. So that is one that I could remember and now the recent one we recently took a goal saying that you know we will bring in all the AI products uh from Amagi in the next two years and we will make sure that our significant portion of our company's business runs through the AI softwares. >> What are the questions your investors and customers are asking regarding AI?

49:11 So the way we present to people and that's the way we at least are have high conviction internally is when you're an infrastructure business like what we are today for example where we're running the gut of the systems for our customers >> that is not a reasoning system it's really a video fabric a pipeline which is running >> ample >> versus an application business is very different. So the way we delinate to them is hey we a mission critical infrastructure which is sitting in the pump pipe there and nobody's going to go there and do it because you don't want my tens of billions of dollars running on a vibe coded business example right >> so those are the ways where we think there's a and this is now providing us a huge opportunity because of the tectonic shifts now the transformation is happening on on top of the infrastructure we own the infrastructure

49:58 now we have the right to win of building everything on top of the infrastructure for our customers I think that's the biggest value that we're able to drive value in and again that's but again there's a vantage point of one company the way we see it but if I'm an investor truly it's very hard and I'm an investor myself personally and when I look at a lot of the companies I it's very hard for me to feel comfortable >> is it a one month away problem or is it a one year away that somebody's going to >> give some examples like some companies >> see lots of obviously lots of the SAS companies which are in the application domain >> is a hard problem Because will it be something that we can actually make them survive and grow is a hard problem truly and not because it was all very sensibly good businesses uh 18 months back or 24 months back and that looks like that's

50:44 that can actually be replicated in few months or few weeks >> the more of these businesses and every business including us I think the transformation is going to happen I feel that we uh there's a person called Hamilton Helmer who's written a book called seven powers of strategy >> and uh That's been a very timeless book to some extent. It's over the last 20 plus years. I use that as a framework through which you apply for every business and because that's not changing the the the strategy of the businesses and so sustainability has to come through some sort of business mode and not through just technology mode alone because there's nothing called a technology mode and that's gone for everybody right. It's become a zero sum game for all of us and when software becomes close to zero then the modes are going to be the business modes and what

51:29 you try to drive at. So that's my lens of even evaluating ourselves, our businesses as well as any other business that I see today. So how are you planning the next five years considering this AI? I think for us I think it's a two parts from a vantage point of where we are for example our customers like what I think Vidya pointed out right are seeing hey can I where is my operating leverage because of AI that's one big question for them where do I think I can now I have a a specific business competency which is content creation storytelling can I make my storytelling better can I really bring it to new audiences for example so these are genuinely large opportunities for them and for to leverage the whole AI as a capability to transform those capabilities for example right and again there are many

52:15 many such examples right today for example we we had launched a product called news pulse it's actually a for news channels now they want to target the Gen Z population local news in the US is a 40 plus sort of age group audiences for example >> but over years they built billions of dollars of infrastructure and business to kind of get to cater to the community >> now But that's not the most attractive component. You want to be able to get to the next tier of population audience. Example, what do we do? We take their existing content that's already been they have hundreds of millions of dollars of studios and production and stories coming in. We transform that into a into tweets and social sharing and others for example so that we're able to reach audiences in the devices that they actually do today. For

53:01 example, not on the television sets of the past but in the phones of the future that we're able to do. That's one example of where we're able to carry these customers to the new journey and all of this is done through AI infrastructure and agentic infrastructure and we launched perhaps the the only agentic AI infrastructure software today the in in our business for example which helps our customers to do that and again this is one of a battery of new offerings that's going to come in I not look at all of that right now but the idea is that we're trying to build those journeys for our customers >> okay and maybe after the podcast I'll also discuss the startups that you evaluate Yes. Yes. Absolutely. >> Very excited for that also. And Vidya's journey is even more interesting. So I would want to talk to Vidya.

53:46 Uh I think Anjali also talked about this in in her LinkedIn post that Vidya is is um not just one of the few women techies in India. Uh but there's also someone who has led the company throughout all these years and even took the company to public and how you started you worked in a global company also being a 2x founder now uh you know building an public company leading it uh on the front how has this journey been for you vidya >> it's very fulfilling to say as bas told I love the job that I do and I do to with utmost passion. >> But Basar has so many examples. There are so many men who have done it right.

54:32 >> But for you when you were you know in that room uh where you only said that there are so many women investors you are seeing at one place right you didn't know that we have so many women investors in India uh that you got to see in that room that day. So for us we don't have those many uh >> examples >> examples you are one of the very few examples. How do you uh feel about it? >> No, I I think I've told about this many times. See, in the role that I play when I even when we were building a software or whatever, gender should never come into play. If gender comes into play, it becomes very difficult to do. For me, the role models are all the you know people whom we all looked at like you know be it from the founders of Apple, founder of Microsoft all those stories

55:18 we have heard and you know we have seen the software that they've built, we have seen we have studied computer science with utmost interest. So the interest was in what can you do, how can you build and slowly it goes over time. I've been lucky and I've been fortunate to be associated with these guys uh to have built this company. No foundation again two two things that in my mind at least comes right at least shini and me never took vidya as oh women founder we I don't think I think for me also personally if you look at it when we built it from the trenches in the last 30 30 years we've together I think in the last few years is when we really thought oh women founders is something that's distinctly different because I I don't think we treat each other as oh women male female actually doesn't gender as good as you're pointing out we never had that in our in our and that's

56:03 the way the company behaves in itself right company behavior is like nobody thinks it's like oh and u lots of people who join us sometimes don't even know that we are actually spouses >> it confirm it >> and the name is very confusing right because my last name says Shini was even if they think that they were spouses they would think that Shini is my husband >> so that's been the one so we kind of kept that >> but you intentionally uh kept it like this >> yeah people should yeah people should work with you because of what you are not because you know you're so and so's husband or wife. So that's how we looked at it. Yeah. Yeah. That is one and I have struggled not to say that uh this was easy with the kids especially I've struggled a lot >> uh you know juggling between guilt work

56:52 and uh doing things for him. But I've been fortunate to have a fantastic family especially my mother-in-law is

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