Entering the Product Space – Shoaib Ahmed, Tally Solutions(Part 2 of 3)

You can read the Part 1 of the 3 series interview here.

Shoaib Ahmed, President of Tally Solutions, began his career as a retail
software developer in the early 90s. Formerly the Founder-Director of Vedha
Automations Pvt.Ltd, Mr. Ahmed was responsible for developing Shoper, a
market-leading retail business solution — and the first of its kind in India to
bring in barcoding to the retail space. The company was acquired by Tally
Solutions in 2005, where Shoper merged with the Tally platform to offer a
complete enterprise retail software suite. In the second of a three-part series,
Mr. Ahmed talks about product development in the B2B space and reaching out
to customers.

Why do you think we are seeing businesses that start off as a product
company become service entities?

This is where I see the need for educating customers: why should you buy our product,
what can you expect from our product and what shouldn’t you expect from our product?
More importantly, will the product solve your key issue and will it do it well? Unfortunately,
who is educating the customer about these aspects? It may be a service provider who is
interested in the service revenue only. So there’s a disconnect — there’s nobody who is
evangelizing the product and being a product champion in the small and medium business
space.

What do you feel about having ‘pilot’ customers who can obtain the
product with an attractive offer like a reduced price?

I don’t think this is the right way of doing things. When you’re reaching out to customers,
it’s important to solve some of their key issues. To do this, you need information about a
particular profile of customers so very clear about who your customer is and what your
customer looks like to you. Now, if you want to get a large enough slice of the market
make sure you have experience with a complete set of customers — you cannot pilot
a semi-experience. You need to be able to engage with him and get your value from
him over the proposition you are making. This means measuring not only the product’s
effectiveness, but also measuring the quality of the sales pitch and that the service
capability and the service quality promise is being fulfilled.

You may decide in the first six months to choose a smaller customer set to target but
you’ll be measuring to see if all elements of your complete product experience are being
monitored for effectiveness or reviewed. This gives you an idea of scalability, since you
can then adopt an attractive pricing strategy with confidence. It can be an incremental
process, but unlike a pilot, you’re not only reaching out to a few customers and shaping
your product around them. With a pilot, the danger could be that the pilot customers are
early adopters who will view evangelizing you product amongst their peers as letting go of
a competitive advantage.

Do you think it’s a myth that it’s easier to develop B2C products rather
than B2B?

I think the success of Tally disproves this. Out of a potential 80 lakh businesses, nearly
40-45 lakh own computers. A large group use Tally for their business — nearly 90%
of the market. So, the constant need for us to deliver a value is critical and it’s also
important to keep communicating this value. If I as a business owner don’t see a value
in paying you for a product or service then I don’t, but increasingly in the connected
world a businessman understands that he can grow his business manifold by leveraging
technology. The information system now has to support him because he is in a connected
world so the game is changing.

In the B2C area, let’s look at the average individual : he has a higher disposal income and
is more exposed to technology. A lot of his day-to-day activities are done using technology
(like banking and filing returns). When he’s engaging with the rest of the world, he’s going
to expect a similar experience. This may act as a driving force for businesses to match
that : for example, can an individual get his doctor’s appointment online? If there is no
supporting eco-system for the the tool that the customer has, then even the greatest
online tool available to this customer can’t drive enough value. In my mind its critical that
business-to-business product development is on the system and the efficiencies have a
direct economic impact. For example, the average time for payment reconciliation in the
small business space is an average eight days. From a digital perspective, it should be
instantaneous. Just imagine the impact and velocity of commerce!

Interview Cont’d

Fullerton India – Revolutionizing India

At a time when “Cloud” was still a buzz word and “Platform as a Service” as a category didn’t exist, Fullerton India was looking  for the next generation computing technology to help them build business applications faster, cheaper, better.  Fullerton India stumbled across OrangeScape Platform (formerly known as DimensionN). They realized that the conventional approach to build a whole host of of application in the “White Space” area will be heavily time consuming taking anywhere between 30 to 90 days for an application.

And, added to that complexity, these applications change every other week and change management becomes a huge challenge. OrangeScape helped Fulllerton to fill this gap by providing a platform approach not only to build these new applications, workflows as per their business process but also to frequently upgrade them as the business need changes. Listen to Pramod!

Mr. Pramod Krishnamurthy who as EVP – Technology (2005 – 2010) at Fullerton India Credit Corporation Ltd. (FIC) talks about his discovery of OrangeScape and how he adopted our platform which ultimately resulted in their IT team building business apps faster than they would have done in the traditional mode.

Pramod shares more on this success story over a video here and ends with a message to his peers on cloud adoption and working along with emerging companies. Pramod is currently CTO at Birla Sun Life Insurance.

Watch the Video on the Organgescape blog

Get Your Story Straight

What do top technology companies have in common? Think about SalesForceIBM,VMwareWorkdayAppleRiverbed, Cisco.  What separates market leaders and category creators from the rest of the pack?

They tell powerful stories.

Stories matter. We see it over and over again. Companies that capitalize on an inflection point and grab a leadership position always have a thought-provoking point of view that resonates with buyers. Customers buy into the story before they buy the solution. 

And a story is more than a slogan or a catchy tagline. It’s offering a different perspective, not just pushing a product. It’s a crisp, clear way of communicating how a company or a product will solve a big, hairy problem for customers. It comes from putting the customer’s needs and requirements first, not the technology or the company’s agenda.

Look at Cisco. The company wasn’t founded to sell routers and switches. It started when a husband and wife wanted to email each other from different offices at Stanford and they couldn’t. So they created the multi-protocol router and solved the problem. And they knew others wanted the same problem solved. They didn’t launch a product—they solved a problem and created a powerful story and different point-of-view. And they instilled a customer-first, problem-solving culture at Cisco. You know the rest of that story.

Need other examples? Look at game-changing CEOs Marc BenioffLarry EllisonSteve Jobs, and Jeff Bezos. They disrupted markets and catapulted their companies into legendary status with conversations that re-framed the problem for buyers. They articulated their company’s value in simple, concise positioning stories and a narrative that offers a new perspective to buyers.

So if a great story is the key to success, why doesn’t every technology company have one? The reason is simple.

All too often, the responsibility for positioning is taken on by tech CEOs or product managers who are in love with their technology.  And technology moves to the forefront of the story. WRONG. Buyers don’t care what’s cool about your technology or your IP. They care what it does for them.

The most effective storylines carve out a distinct corner of the room—and box competitors in as having a solution for “yesterday’s problem” or “the right idea, but the wrong approach.”

What makes a good storyline? The most effective positioning stories MUST answer three questions for the target buyer:

#1: Why your company or product, NOW?

Tell them in clear, human terms what problem your product solves and why it’s important to solve it TODAY. Is this an old problem that has gotten worse? A new problem caused by fast-changing market dynamics? Will your buyer lose his job if he doesn’t solve this problem? Strong positioning stories empathize with the buyer’s situation and create a sense of urgency about solving a critical problem.

#2: Why is your solution different?

Once the buyer agrees with your point of view, the next question on their mind is “who else can solve this problem?” or “can my existing technology vendor take care of this for me?” Great stories lay down the logic for a new approach to solving the problem. This requires talking about your secret sauce, IP, or game-changing differentiators  in terms of business requirements. You can avoid the tedious “feature-checklist” war by articulating the need for a different approach. Different, not better, always wins.

#3: How will this improve my life six months from now?

Paint your buyer a picture of how much better their life will be with an investment in your solution. Your life is “hell” right now (big problem); here is the unique approach (our secret sauce) for solving this problem; here is what your life will soon look like.

All market leaders and category disruptors have a compelling and distinct point of view. If you want to join them, start by getting your story straight.

The Product Business is Like the Movie Business

I read the cover story in Forbes on the success of Dropbox, which is set to do about $240 million in sales in 2011, with only 70 employees. As Forbes points out, that is about 3x the revenue per employee of Google, which is no slouch in the revenue per employee department itself. First, congratulations, Dropbox! This is the type of breathtaking number that makes the ordinarily successful companies like, well, Zoho, to wonder “What are we doing wrong?”

In our 15 year history in Zoho Corporation – which is bigger than the Zoho product suite itself – we have shipped over 70 products, of which we would say about 30 have been successful in the sense of being nicely profitable. Yet, even with that group of 30 products, we have seen the 10x effect: a set of two products that have taken approximately the same amount of effort to build, by similarly situated teams, yet one of them does 10x the sales of the other, with both of them being profitable. Of course the 10-bagger is much more profitable but the key point is that both of them could be counted as successful in the sense of being profitable. We have even seen 100x difference for approximately the same effort, but in our case, that is the difference between doing only $100K a year in sales vs $10 million a year, and I would not count that as 100x because the $100K product either grows up or we would eventually discontinue it because it is not profitable.

Dropbox is a logical extension of this phenomenon, where a product does 100x the sales, without taking much more by way of engineering effort than a profitable 1x product. And then the grand daddy of them all – Google search, which in its heyday reached $1 billion in sales, on not much more than the effort of a single engineering team – the headcount gets added later to diversify the company but the original search was a small team. I believe there has only been one Google search so far, so the ordinarily successful (ahem!) shouldn’t feel too bad.

Y Combinator, which has funded over 300 companies so far, is a perfect illustration. All these teams are similarly situated, with similar founder profiles and they all get similar initial funding, and they spend similar initial effort. If we consider only the universe of profitable YC companies, my guess is that so far there is only one 100-bagger i.e Dropbox, in the YC portfolio. Based on Zoho experience, I would estimate YC has about ten 10-baggers, and about fifty one-baggers (i.e just about profitable).

Welcome to the product business, which looks very much like the movie business!

Enterprise Applications – Thousands of app “snacks” instead of “full meal” applications?

Today was the second time I am hearing that the future of applications in enterprises are thousands of small apps instead a hundred or two applications!

I was listening to the CTO of Computer Associates who forecasts the future of applications in enterprises as stringing together lots of small apps that do something very well rather than developing something from scratch fully!

Here is the article that covers his talk that is provocatively labelled “Video Killed the Radio Star and Cloud Computing Will Kill the Programming Star”

Donald Ferguson, CTO of Computer Associates makes the very interesting point that you can STITCH together bigger applications with small focused apps together to do something larger in an enterprise.

Very true! Here is the website I created for our local networking group Healthcare Innovation Programs – Kentucky which is a networking group to educate each other about innovations happening here in Kentucky.

I put this together in 30 minutes! THIRTY MINUTES! Ten years ago this would be a three month project with hacking HTML by hand!

About a year ago I put together another website for another networking group usingNing that took me three hours to figure out and set up!

Here is the second article that argues for enterprises using thousands of small apps rather than developing large apps! – On Deploying Tablets in the Enterprise


The discussion panel in this article also makes the same point – “Don’t turn tablets into PCs,” Todd Barr said, meaning that IT departments shouldn’t try to manage them as closely. Since apps are cheap, organizations should encourage experimentation and individual work styles.

Seems like that’s where things are headed – small apps stitched together to do something bigger!

It’s happening in mHealth already – Withings Body Scale enters into partnership with BodyMedia FIT Armband.

Be faithful in small things because it is in them that your strength lies. – Mother Teresa.