Sumit Mehra and Ashish Toshniwal enjoy a morning coffee at Café Un Deux Trois, just off Times Square in New York City. They are the co-founders of Y Media Labs, a 270-person company that specializes in creating consumer apps for clients like Home Depot, PayPal, Salesforce and Staples; 27 of their clients are Fortune 500 companies. Y Media Labs is headquartered outside San Francisco in Redwood City. This morning in New York City, the founders are preparing for various meetings with clients, investors and their local Y Media Labs team.
Sitting in one the bistro’s red booths with a street view, Mehra and Toshniwal, both in their mid-30’s and dressed in business casual wear, explain the evolution of Y Media Labs. Their story includes many serendipitous twists and turns, most notably, growing up two miles apart in Kolkata, India, but not meeting until students at Purdue University in 2001.
The two had been tinkering away with startup ideas since 2004, but 2009, at the height of the economic recession, became a pivotal year. Both had been approved for H1-B work visas after a long, arduous process, despite the fact that usual quotas had not been filled.
[Read more about obtaining work visas and their suggestions to foreign-born entrepreneurs who want to launch in the U.S. here.]
In 2009 they both quit their jobs, Mehra at Yahoo, Toshniwal at a startup sold to Google. And most significant to their future, Apple opened their app store to outside developers. “That became really interesting,” says Mehra, “that’s when we started.”
Toshniwal puts the 2009 mobile landscape in perspective: “iPhone was a new technology.” The two get extra animated as they joke about the typical Wall Street guy with his Blackberry, the dominant mobile device at the time, who thought iPhone apps were just for high school kids downloading games for 99 cents, not enabling billions of dollars of transactions.
One of Y Media Labs first corporate clients was Safeway, headquartered in a multiple-building complex in the Bay Area. Toshniwal gleefully remembers standing in front of the VP, using the term “In our company” in their pitch. “And the company was right inside that room!” exclaims Toshniwal, prompting hysterical laughter from both. “Fortunately, we got the business,” says Toshniwal. They began to get additional clients like Sesame Street, Foot Locker and Symantec.
“We engineered the SEO, really well,” explains Toshniwal. “Someone would type in ‘iPhone developer,’ our name sometimes would show up even before Apple,” he continues, “It was shocking!” They also got clients through word of mouth.
In 2010, they helped create the Montessorium app, teaching kids ABC’s and 123’s via touch on the iPhone and iPad. 48 hours after the app became available for download, which happen to be Apple’s 54th app, Toshniwal says they received an email. “Thank you, let me know how I can help. I love what you are doing. Best, Steve.”
After a moment of giddy silence, they clarify in unison, “Steve Jobs!” Mehta whips out his phone to find the old email from Apple’s co-founder. “It came at 3 am in the morning,” Mehra says with glee.
They recall talking each other down and chose to believe someone playing a joke on them. Until the founder of Montessorium, who had received considerable pushback from Montessori groups, as their method of teaching and learning isn’t about touching a screen, also received an email from Steve Jobs. “Keep doing what you are doing, you’ll prove the critics wrong,” Toshniwal and Mehra recall.
The only funding Y Media Labs received in the early days were loans from family and friends, helping to bootstrap the business. “I think we paid the loans in the first 12 months,” says Mehra. MDC Partners became investors in 2015, allowing Y Media Labs to scale, opening offices in Indianapolis, Atlanta and Bangalore, India in addition to the New York and Silicon Valley locations.
Being immigrant co-founders has been an asset to the business, both Mehra and Toshniwal believe. “Entrepreneurs need to be scrappy, frugal,” says Mehra, “that’s a really important skill set. To be able to do a great job when you have nothing. Right? How do you make everything out nothing?” asks Mehra rhetorically. “When you grow up in different parts of the world, the opportunities and challenges are very different,” he adds.
“In the Bay area,” says Toshniwal, “you order this frappuccino…” Toshniwal pauses, noting that many get really upset if the wrong type of creamer has been used. “Come on!” he exclaims, “Get perspective here. I mean, where we come from… “ Mehra quickly interjects, “There is only one option!” They laugh, riffing off each other, understanding both worlds and the absurdity.
The conversation takes a serious turn. “The advantage we have,” says Toshniwal, “is not having this sense of entitlement.” Mehra agrees with a quick affirmative. “And being grateful for what we have,” Toshniwal continues, “I think that’s a huge advantage.”
Both their fathers were local business owners in Kolkata; Mehra’s worked with cotton yarn; Toshniwal’s with lighting. “They didn’t have huge VC funds to build their businesses. They built their businesses organically every single year,” says Mehra, “I think there was a lot of learning just looking at them.”
Y Media Labs employees also benefit from Mehra and Toshniwal’s sense of gratitude. Mehra proudly shows a slick video of a lush Hawaii property set to a cool jazz soundtrack, which they rented for their employees, free of charge. Mehra guesses 85 to 90% of the company has vacationed there since January. “This comes back to being grateful,” says Toshniwal, calling 2016 a “phenomenal” year.
“U.S. society makes it so easy for anyone to start a business,” says Mehra, noting that the bureaucracy and corruption found in many other countries, often mars the intent of building a business. “That’s what I love about the U.S.,” adds Mehra, “if you are somebody with ambition, you can do wonders. In the process, create so many jobs, build things that take us as a society forward.”