For founders with no work-life balance, Route Mobile’s Rajdip Gupta has three mantras. And a fourth.

Swimming against the current and shunning external capital was a tough task for this entrepreneur. During the early stages of a startup, external capital can hinder growth and faster decision-making, says Rajdip Gupta, the founder and chief executive of Route Mobile Ltd, a communications platform-as-a-service (CPaaS) company.

In July last year, Belgian government-owned telecom firm Proximus Group announced plans to take over Route Mobile for at least ₹5,922 crore (about $707 million) through a 57.56% promoter stake acquisition, one of the largest cross-border deals in the communications platform space. That was Gupta’s claim to fame: Having bootstrapped a billion-dollar company and selling it to a global peer.

Gupta is also a keen investor. Apart from an incubation centre to back early business ideas, he plans to invest more than ₹300 crore in startups through his investment company, Clear Bridge.

As part of Mint’s Founder Diaries podcast series, we take you through Gupta’s stellar journey and his life mantras. 

Edited excerpts:

How did your entrepreneurial journey start? What was that one idea or moment that made you want to start up?

As a kid, I always wanted to do something on my own. During my college days, I used to sell software to people and colleges. The entrepreneurial journey started during my first year of graduation. That’s when I realised that once you want to run your own business, you really need to have full command of it.

However, since I come from a very small middle-class family, there was not much of an opportunity to build something of your own.

So I started working as a hardcore developer. I began my career as a software programmer and worked with multiple companies for 6-7 years. My last assignment was with IBM in the UK, where I was a part of the machine learning innovation lab.

During that time, I realised the potential of mobile phones. In developed countries, people have several use cases for mobile phones, which include interacting with people across borders. In almost all emerging countries, I realised there was a huge gap where incoming and outgoing also were charged ₹16. So the question was, how can I build something for a market like India or the Middle East.

I decided one fine day that I’ll quit and start something new. This was not an easy decision to make in the early 2000s. Lots of people asked me how can you leave a well-settled job in the UK and come back to India, where there was no startup ecosystem back then. Also, unfortunately, there was also a dotcom bubble so there was a lot of skepticism on starting something new. But I was determined to try and start something new. It’s good to try and fail rather than just thinking about it.

When I came back to India, I had just ₹1 lakh to build a company. It took almost a year for me to build the entire platform and onboard the first customer. But I always knew that whatever I am building may have good potential in the future. The first customer we onboarded was a $12 customer from Egypt. What helped was that I built the product for the global market.

Similarly, markets like the Middle East, where there are big shopping festivals, often need to communicate their offers to potential customers. So we built something for the retailers there to be able to do that, and we clocked in a revenue of ₹1 crore with a ₹50 lakh profit in year one of the business, which I had started alone.

Where did that insight come from?

I always tell all entrepreneurs that when you build a product you also need to think as a customer. It is not necessary for you to go and speak to 20 customers to understand if a product is bad. First, you need to be a customer of your own product, solving your problem.

How difficult was it to convince your first customer? Credit cards and debit cards were just picking off, not just in India, but globally. How did you convince banks about your company?

It was obviously impossible for me to onboard a banker in the first year. I really wanted to scale my platform so there was enough operator connectivity. We also had enough customers using the platform. It took almost three years before we got the first bank customer. 

In the meantime, we had established direct connectivity with all Middle Eastern and African operators. I travelled across Africa and the Middle East and spent lots of time with them because in our business the operator partnership is very critical. That is how I convinced them.

The reason we were able to convince them was because we built a platform for resellers and distribution. We built this platform because we couldn’t afford to have salespeople at that point. 

Had I hired I would have had to make lots of investments towards paying their salaries to run the entire operation. So we built a white label reseller platform, which enabled small retailers in the region to sell their products to the larger retailers.

I think that really helped us and in the second year. We had 700 resellers in Africa, Asia and the Middle East, paying $500 each.

Later, we enhanced our platform to create a distributed platform that enabled all the resellers to become the distributor themselves. So, the smaller reseller became larger because of their connections and market reach. Four years after we started the business, we had almost 250 distributors and 4,000 resellers.

So, this is how Route Mobile grew faster and started making revenue in terms of fixed amounts of $500-1,000 for distributors and $350,000 from resellers.

That is how we built our product and got huge success. I can say that being an early mover in this space at that time really helped us. We always knew that if we want to start offering services to banks or large enterprises, we needed to have a direct partnership with operators.

Because of the reseller-distributor platform, we were able to generate enough volume on a platform. Route Mobile eventually started operations in India in 2016 and in eight years we have about a 25% market share in the country.

Why did it take you so long to enter India?

India as a market was not very lucrative till 2016, with SMS pricing at 1-2 paisa. To serve a large enterprise customer for that kind of a margin, you really need a huge amount of salespeople, customer support and tech to serve them.

Having no margin did not make any sense for my business, because I think it is very critical for us to always remain a profitable company. We have been profitable from the first year.

However, there was a shift in 2016 as there was a price increase in India. The pricing had gone up to 2-3 cents and then I realised this is the right market for me.

Founders face a problem attracting the right talent early in their journey. How did you overcome that challenge?

My brother Sandeep was a chartered accountant and had a high-paying job at PwC. I did not want him to leave the job in the initial days as having some sustained income for the family was important. However, after we started making more money in the second year, Sandeep quit his job and started working with Router full time.

Still, in 2005, we had only eight employees. For almost 12 years, we both didn’t take a salary from the company. Every single penny we made was reinvested till we started taking about ₹12,000 a month. Sometime in 2007-08, we had enough money in the bank and through all our interest used to pay employee salaries.

In 2007-08, many private equity and venture funds were being set up in India, and there was enough cash available in the market. Given that you never thought of raising external capital, how difficult was it not to fall for that lure?

The previous company that I worked for had raised funds and I had seen the founders struggling with investors. I have seen the amount of time they used to spend with the VC guys every week. So, I realised that I will raise when required, but not at the early stage, because I really wanted to grow my business and make decisions faster.

I have seen some of my founder friends and the amount of time they worked with those investors. Many of them lost focus on putting more effort on their own business.

Of course, there are benefits to being backed by a VC. We get access to greater connections and a faster pace of growth. The advantage of having a VC is that we will get lots of guidance.

But I really wanted to grow slow and remain profitable. I understood that if we did things right, there would be a huge opportunity in the future. So, we realized it was not the right time for us to actually get into VC-backed funding since we were already moving at a comfortable pace.

What led to your decision to grow slowly with stronger unit economics, given that most founders prioritise faster pace of growth?

Last year we exited with ₹4,000 crore revenue and ₹400 crore in profits. For us, it is not about growing slow or fast, but how much money there is in each of the markets, so we always knew where to invest. We really did not want to take a risk because of the idea of being able to grow multi-fold.

What we did was we ensured one market was successful before we went to the other one. In the last 3-4 years, we have scaled to ₹4,000 crore from ₹950 crore. This year, we will close at about ₹5,000 crore.

So the idea is to identify the market without the pressure of having to grow by burning cash and hiring and firing people.

That said, we have not had a single layoff season in our life. I always keep sharing my mantra with other founders—3S: scale, sensibility, and sustainability. In the last 20 years, we are still sustaining in a profitable manner, and we will continue doing that.

Given that founders’ lives can be very lonely, can you tell us about some of your mentors or industry stalwarts you went to when you encountered challenges in your business?

I had a lot of good friends and even my ex-bosses from my previous organizations. I learnt a lot from them. Every single time I used to have any problem, I used to go to them, and they were my critics. A mentor can just guide you on what is right and wrong but at the end of the day, you need to take a call as a founder. So, sometimes my gut feeling is very different from what my mentors are trying to explain. But having one in your life is very important.

The role of a founder needs to keep evolving with the growth of a company. How did you cope with that?

Entrepreneurship is all about creating more leaders. Yes, it is very tough to overcome this kind of situation, because you always believe you’re the best. And that’s one of the dilemmas every founder goes through. When you build something from scratch, you know exactly how it works and every single part of it. Suddenly when somebody comes and gives you guidance, it is natural to think that this is not the right thing.

A founder’s vision must be to create more leaders. I think I was very clear that the people around me are smart enough and that they can take every challenge and build the company to the next level. Today, the team is spread across 22 countries and we serve top tech giants including Google, Facebook, and Amazon. They understand the vision of what the company wants to achieve in the next 5-6 years.

How do you handle work-life balance? What are the things that excite you outside of work?

For founders, there is hardly any work-life balance really. If somebody says that they can maintain that work-life balance, it is fake. I know how many times I have missed my kids’ (parent-teacher meetings). I know how many anniversaries and birthdays I have missed.

As founders, we must go through that period and make those sacrifices. At the same time, salute to your family members also for going through all of it without any complaints.

How did the deal with Proximus happen?

As a founder, you also need to understand your limitations. You have tried something, but it is taking more time because of the rapid changes in the market. The competition is changing faster than you expect. So we tried to set up our US operations multiple times in the last 20 years and every single time we failed.

I always knew the potential of what the US and Europe markets can bring to our business. If I don’t get those markets at the right time I might just have a growth of 10-15%. As a founder, I really want to grow and create that larger scale for the organization.

The moment Proximus came for a discussion, the first question I asked was we are a listed company with a $1.2 billion market cap, and I own 60% of the company. Why should I sell? They said you guys are champions in Asia, Africa and Latin America, while we are champions in Europe and the US. If we come together, let us see what kind of story we can create.

Although I got a very good exit, I decided to not sell everything. I am 47 years old and have that energy to run the company. The only request I had was that I wanted to reinvest back into the whole group and they agreed to that. As of today, we own almost 15% of the combined holding company.

What’s the end game? A Nasdaq listing?

It is too early to comment on that. There is a lot of work that needs to be done and requires more compliance to list there. But as a founder, I have a vision to do that. You will get to know maybe in a year or two, but we do have a plan. If all goes well, we will get listed very soon.

There are a lot of founders who have taken to angel investing and reinvesting into the market. What are your interests?

There are a few investments we have made in this time. At the same time, I also have a different investment philosophy. I think the investment and founding company is limited to a certain league of people today. In India, there is a huge amount of talent in tier two and three cities, but these talents have never gotten the right opportunity.

So we started a Virar Hub Incubation Center, where we fund every single good idea for ₹10 lakh without equity. If this idea gets better and the business grows, then we invest further and try to get equity.

I think giving back to society is fine but there are lots of founders who are struggling to get the right mentor also. So, I can create a hub like this given that India has huge and diverse talent.

We have also done mainstream investments in companies like Biryani By Kilo and are looking out for another 10-15 investments. We plan to invest over ₹300 crore through our investment company, Clear Bridge, which is dedicated to investing in startups.

What three ideas are convinced will be the next best things in a decade?

There’s a huge opportunity in blockchain. AI has multiple use cases too. The time has come when we need to really build stuff, or a stack based on collaboration. Whatever Google or Meta are doing has already been built. You can collaborate with APIs to make sure you can overcome the dependency in your organization. That is where success is.

Does that also mean that Route and Proximus put together will explore an organic opportunity in these areas?

We will. We have always had a policy of build and buy right. There are certain products that we built in-house. But wherever we felt that the market is growing very fast and we may not have the time to build the whole thing in-house, we acquired them.

We are almost a $7 billion revenue company, if you combine the group with Proximus. And we’re talking about a $10 billion revenue index 3-4 years down the line. We have lots of use cases within the group to use AI and we do have certain investment pieces that we are looking forward to.

How important is spirituality for you? How do you find that inner strength?

You should always believe there is something called a supernatural power around you. You name it as a god or for some people you get through with yoga. There are several ways around it.

I think for a founder’s life, spirituality is important. Every single time you struggle, or have lots of challenges in your life, I believe that if you're doing the right thing for the community and the people around you, there will be some kind of power around you that will always motivate you.

Just do your duties and don’t wait for the result. I think as a founder, I always believe that my spirituality is all about Lord Krishna. I say whatever verse of the Gita you read, you can learn a lot every single time you feel low.