Uday Challu (R), 46 & Vishal Dhar, 41
WHO ARE THEY? Challu is a techie; Dhar is a marketer. They met on a flight and became friends.
THEIR VENTURE: Set up iYogi to provide direct-to-consumer tech support services. Built a $19 million business in three years. Aiming for $70 million in 2010-11
BIG WIN: An alliance with Wal-Mart to reach out to potential customers.
WHAT NEXT: Eyeing Europe, India; To start offering depot repair services to US customers. Add Apple Mac and Android to service basket.
When Rachel Smith in Florida, USA, could not scan a document in her multifunction printer, she called a tech-support guy 14,000 kilometres away in Gurgaon, India. In a few minutes, the Indian at the other end took remote control of her computer and peripherals and resolved the problem. Sounds like a typical outsourcing call? Wrong. For years, it was the American companies that hired Indians to provide tech support to their customers. It took a lot of effort to convince users that accent and cultural differences were just a small inconvenience to be endured for the sake of cheap and quick service. But now, a small but growing number of Americans like Smith are prepared to bypass US companies and directly hire tech-support in India. Smith (name changed) belongs to the baby-boomer generation that grew up without computers or mobile phones. Like many of that generation, she has the money to buy the latest gadgets but is not comfortable experimenting with them.
In other words, the 117 million Americans who are above the age of 45 (US Census Bureau data) present a ready market for direct-to-consumer tech support, something that Smith’s service provider, a startup called iYogi, spotted early and cashed in on. Founded by techie Uday Challu and marketing professional Vishal Dhar in 2007, iYogi is a 4,000-people operation answering 15,000 complaints every day from technology users, mostly in the US. The company says it has 250,000 customers in the US, UK, Canada and Australia who have subscribed to annual contracts for round-the-clock service via a global toll-free number.
A big push will come from a recent tie-up with Wal-Mart which has agreed to bundle a free one-time support service from iYogi with computers bought online.
The Indian Identity
Challu and Dhar met on a flight and quickly found they could work together on entrepreneurial ventures. They first founded a business-to-business media outsourcing company called IQ Resources. Challu had run a third-party desktop support business in the 1980s but shut it down because it proved to be ahead of its time. But now, he sensed the emerging opportunity in reviving that business in a modern form.
Borrowing from the outsourcing model of charging dollars per hour of work, the two created iYogi as an Indian brand that sells tech support services online to users of computers and other gadgets in the developed world. They also used the Indian cost advantage to compete with US firms such as Geeksquad, PlumChoice and Support.com. The service is subscription-based and a first-time caller is offered a one-year package costing $169.99. CEO Challu says thirty percent of the customers take a three-year service at $369.99 once their initial subscription expires. The service is round-the-clock and allows unlimited calls.
But iYogi also differs from outsourcing companies in some crucial ways. For one, you won’t find a technician adopting a fake accent while handling customer calls. “We were clear from day one on our goal to build a proud Indian company that offers tech support service with our true identity revealed upfront,” says Challu. “Using fake names and impersonating someone you are not… is a flawed business model.” Along the way, the company has evolved the mindset of a fast-moving consumer goods company.
The business partner is the individual customer who calls, not a multi-billion dollar company headquartered in the US. “We are not taking these calls because we have no choice but to take them. Unlike an outsourced customer support centre for computer vendors, our technicians take calls because subscribers have opted for our service and want paid helps,” says Challu.
For a company of its size, iYogi is quite aggressive in marketing. And it has done it purely through the online channel. It spent $4 million towards paid search advertising on Google last year. This year, the figure will reach $10 million, says Dhar, co-founder and president for marketing. “We track about three lakh keywords on Google and bid for the most relevant ones such as ‘tech support’, ‘computer repair’ etc.” The company has about 2,000 toll-free numbers and has decided against outsourcing its online marketing or opting for automatic online marketing tools. “Less you think you know, the better. Platforms get reinvented in this medium,” he says adding the company can’t risk losing direct touch with the customers.