April 13, 2000

Ten Fast Facts

vCustomer WHO: A privately held e-commerce startup founded last year by Sanjay Kumar. WHAT: Operates online customer service call centers. WHERE: Headquarters in Bellevue with call centers in India and the United Arab Emirates.

Fast Fact #1: vCustomer uses agents based thousands of miles away to provide live online service to customers of U.S. companies.

Comment: The pinched U.S. labor market means companies here either can't find enough customer service agents or must pay so much that they can't afford to hire as many as they need, says Sanjay Kumar, president and CEO. Right now, most of vCustomer's agents are based in India, but Kumar says he has "every intention of going to other parts of the world and setting up call centers."

Fast Fact #2: Kumar expects vCustomer to employ 15,000 to 20,000 people within three to four years.

Comment: "There is an incredible need today," says Kumar of the demand for online customer service. vCustomer currently employs about 350 call-center agents at three primary locations plus 15 people at its Bellevue headquarters. But with the Gartner Group predicting that within the next two years 80 percent of all customer contacts will come via e-mail, vCustomer is poised to expand rapidly, says Kumar.

Fast Fact #3: Kumar spent three months in his native India preparing to launch the company.

Comment: It was there that the former executive at Microsoft and Teledesic Corp. ran into Aditya Gupta, founder of Intec Solutions. Intec already had put a version of Kumar's business model into practice by operating telephone and Internet call centers for U.S. companies with subsidiaries in India. The two men then put their heads together to form vCustomer, with Kumar funding the new company and Intec becoming vCustomer India. Gupta is now director of global operations. "The serendipity of finding someone with the same view was beautiful," notes Kumar. "Our grandfathers were neighbors in the same village. Those kinds of things cement relationships."

Fast Fact #4: The overwhelming flood of electronic communication is one factor driving the demand for online customer service.

Comment: Only 30 percent of companies in a Yankee Group survey responded to e-mail within 24 hours. "We want to change that," says Kumar. Noting the problems some businesses encountered processing orders last Christmas, Kumar expects many will turn to vCustomer this year. "They think about what happened last year and they don't want to be there again," he says.

Fast Fact #5: The increased automation of phone-based customer service is another trend favoring vCustomer.

Comment: "The enticing thing about the phone is there is going to be a voice on the other end of the line," says Kumar. "But over the last 10 years, that's gone away. You have to hit 3 for this and 4 for that. The challenge is making companies understand that [e-mail is] a very cost-effective way to serve your customers and it's a very precise way to serve your customers." For example, instead of repeating explanation after explanation orally, operators can provide stock answers to common question with the click of a mouse, composing original replies only when necessary, notes Kumar.

Fast Fact #6: Operating overseas call centers -- especially in India -- offers several advantages.

Comment: The lower cost of living means vCustomer can pay healthy wages by local standards and still save money over the cost to hire U.S. workers -- if it could find any, says Kumar. In addition, India has a large population of well educated, English-speaking people whose accents are a moot issue on the Internet.

Fast Fact #7: India is emerging as a high-tech hub.

Comment: Why? "Indians have always been very focused on education and finally that education is paying off," says Kumar, noting that earning a doctorate in computer science from the University of Pennsylvania was greeted "very matter-of factly" by his family. He says Indians have a "real hunger" to prove their country is a world leader. Technology is satisfying that desire.

Fast Fact #8: vCustomer stresses flexibility.

Comment: The company can provide clients with as a many or as few agents as they want -- all trained in a client's particular procedures. vCustomer can handle all or part of a client's e-mail responses, live chat and marketing support or serve only as a backup in case a client's in-house system crashes. By virtue of being on the other side of the world, it can easily cover a U.S. company's evening calls since it's daytime in India when it's night here. Plus cultural differences allow vCustomer to readily help clients meet demands during peak periods. "There is no Mother's Day in India," notes Kumar.

Fast Fact #9: vCustomer currently has 14 U.S. and European clients.

Comment: They don't have to call India for a response. vCustomer's sales force and account managers are based in the U.S. Kumar declined to name specific clients for fear of implying that their previous customer service efforts were lacking. "These are great companies and we're helping them meet their challenges," he says.

Fast Fact #10: vCustomer is growing without outside investors.

Comments: "We are not like [other] dot-coms," says Kumar. "We don't spend any money we don't earn." On the other hand, the company eventually will need to attract venture capital to reach its full potential, says Kumar. "An IPO is in the distant future."

Previous columns:

• Ten Fast Facts, 04-06-2000
• Ten Fast Facts, 03-30-2000
• Ten Fast Facts, 03-23-2000
• Ten Fast Facts, 02-24-2000
• Ten Fast Facts, 02-10-2000
• Ten Fast Facts, 02-03-2000
• Ten Fast Facts, 01-27-2000
• Ten Fast Facts, 01-20-2000