India Financial Services – Disrupt or Be Disrupted

Matrix India recently hosted two firebrands of the financial services world, Mr Sanjay Agarwal, founder AU Small Finance Bank and Mr Sharad Sharma, founder iSPIRT Foundation, Volunteer at India Stack, for a no holds barred discussion at the Matrix Rooftop in Bangalore. Here is an excerpt from the evening and some of our learnings for fin-tech entrepreneurs.

Part 1 of the two-part series features the untold story of AU Bank, in the words of Sanjay Agarwal himself, as below:

Sanjay Agarwal – on his background and early days before starting AU:

“In my early Chartered Accountancy days, I started out by doing audit work, taxation, and managing clients. I had studied hard and was naïve and enthusiastic at that time hoping, to solve the world’s problems. This pushed me to work harder and I had a desire to do something more.

I believe that we are the choices we make. While evaluating various choices, I eliminated all the options that I didn’t want to pursue e.g. to work for a fee or commission and then I started digging deeper on what really interests me – that was when the concept of AU Financiers was formed.

In 1996, as 26 years old, I began approaching HNIs to raise capital, as back then, there were no VCs. I was fortunate to raise INR 10 cr at a 12% hurdle rate and I had to secure the funding with a personal guarantee. But what is the guarantee of the guarantor? No one questioned this at that time. So, I technically became one of the first P2P lenders, and structured a product that didn’t exist– short term, secured and at a 30% rate of interest. That was the start of the AU journey.”

The Early Days of AU:

“I started off AU as a one-man army. I was everything from the treasurer to the collector. Slowly we built our team and rotated the 10 cr of capital to disburse 100 cr of loans – not a single rupee was lost. There were several challenges at that time for e.g., there was no CIBIL score, financial discipline was lacking, people were still learning how to take a loan and repay it and customer ids didn’t even have a photograph. But somehow, we managed.

The period from 1996 to 2002 taught me everything I needed to learn – how to lend, how to collect, how to manage people, read people’s body language, and most importantly how to manage yourself in different situations. I follow all of that until today, and my team also benefits or suffers from those learnings of mine even today. In those 7 years, we would have dealt with 2000 customers out of which 500 defaulted. That was the ratio of defaulters – 25%. But we managed and there were actually no NPL’s.”

Partnering with HDFC Bank

“In 2002, retail credit was beginning to take off, but our HNIs started pulling their money out, as they wanted a higher return. However, at that time, the most premium bank in the country, HDFC Bank, appointed us as their channel partner. The model we followed was very simple – AU was responsible for sourcing the customer, KYC processing and doing on the ground diligence while loans were booked on HDFC’s balance sheet. HDFC is perceived to be a conservative bank, and it is – however, they gave me Rs 400 cr, on a net worth of only Rs 5 cr! They made an exception in our case due to our strong track record, through execution, sound knowledge of the market, and most importantly our integrity.

By 2008, our net worth had increased to Rs 10 crore through internal accruals. At that time, HDFC told us that we can’t give you any more capital, as we were overleveraged, and that we now needed to bring in equity capital if we wanted to grow.”

Growing the balance sheet and partnering right

“I had two choices at that point, I could continue in Jaipur, keep my ambition under control and live comfortably or figure out what else is possible. I chose the latter and this marked the beginning of my partnership with Motilal Oswal. Its easier to raise equity now, back in the day shareholder agreements used to look like loan agreements with min IRR requirements, etc. As luck would have it, a few months after we raised equity, the Lehman Brothers crisis broke out and most banks stopped funding. We were supported once again by HDFC – they were our saviour and I will cherish my relationship with them always. Once the market settled down, having survived this negative environment, there was no looking back.

Our next major investor was IFC. For the entrepreneurs here, I want to say that you have to be selective about your investors, who will help with not just capital – there should be added value they bring to the table apart from money. IFC was giving me 20% lower valuation, but I knew that I didn’t have any lineage to fall back on. As a first-generation entrepreneur, I had to raise money on the strength of my balance sheet and not basis my family name. I knew that partnering with IFC would shift the perception of AU within the industry, especially for PSU banks. After their investment, we grew from one bank relationship with HDFC to 40 bank partnerships. One thing led to another and Warburg Pincus, ChrysCapital, and Kedaara Capital all came on board after that.”

Consistent performance

“From 2008 onwards, we started diversifying from vehicle lending and got into other forms of secured lending like a loan against property, home loans etc. We never tried unsecured lending and never ventured into microfinance or gold finance. Those were very popular products at that time but focusing on what we were good at resulted in a consistently strong performance. We never had a bad year. In the world of finance, the margin of error is very less. If you have a bad year you can almost never come back. Good companies survive regardless of the market condition, you can never blame the market for your company’s poor performance. In 2015-16, we were a successful NBFC, our RoA was close to 3% with an asset base of close to 8,000 crores, with a RoE of 27-28% and everyone was chasing us – the question at that time before us was, what next?”

How we became a bank

“As an NBFC, it is very hard to manage a book of Rs 50,000 cr with the same efficiency and effectiveness as it’s a people dependent business, there are limits to the kind of products you can do and you can’t keep raising capital. Hence, we became a bank because we wanted to be there for the next 100 years and that perpetual platform can only be created through a bank. That is the biggest platform and it is not available at a price. It’s available through your integrity, business plan and execution. Today, we receive Rs 100 cr of money every single day. This is the same person who was struggling to raise Rs 10 cr in 1996, and is now getting money at the speed of Rs 100 cr every day – it feels amazing but there is a lot of responsibility!”

Part 2 of the two-part series features insights from Sharad Sharma:

Recognizing the Athletic Gavaskar moment in Indian Financial Services

“Indian financial services industry is going through its equivalent of the Athletic Gavaskar project of Indian cricket. The motive behind this project was to instil the importance of being athletic to successfully compete in the modern game. A new team was created with the rule that if you are not athletic, you cannot be a part of the team, regardless of other skills that you bring to the table. Virat Kohli eventually became the captain of this team and the results are for everyone to see. Similar yet contrasting stories played out in hockey and wrestling. In hockey, we lost for 20 years because we refused to adapt to the introduction of astroturf. However, in wrestling, the Akhadas in Haryana embraced the move from mud to mat with rigour, and Indian wrestling is already punching above its weight class and hopefully will do even better over time. The idea of sharing this is that similar to sports, sometimes an industry goes through a radical shift. Take the telecom space, for example, if Graham Bell came alive in 1995, he would recognize the telephone system, 20 years later he wouldn’t recognize it at all. The banking industry is going to go through a hockey/wrestling or communications type disruption and a lot of us are working hard to make it happen.”

Infrastructure changes lead to New Playgrounds

“All the banks and NBFCs put together are not serving the real India today. We have 10 million+ businesses that have GST id’s, out of which 8 million+ are big enough to pay GST on a monthly basis, but only 1.2 million have access to NBFC or bank finance. This is a gap that needs to be addressed and it cannot be solved through incremental innovations.

Entrepreneurs and incumbents should learn from what happened in the TV industry when new infrastructure became available. When India went from state-run TV towers in 34 cities to cable and satellite TV in pretty much every town, there was a massive new market that was unlocked that did not want to watch the same Ramayan or Hum Log TV serials. What transpired was an explosion of entertainment products because of the high demand stemming from the new markets and the TV channel players that reinvented their content is thriving today while others that did not, are barely surviving or have shut down.

So where does this leave the bankers? I think it is the biggest opportunity for the right banker who understands this problem, wants to serve this section of the market and is willing to reinvent the way they do their business and take advantage of the new infrastructure that will be available.”

Dual-immersed entrepreneurs have the biggest advantage

“Entrepreneurs who are immersed in the messiness of both the new infrastructure and the old problem are “dual immersed entrepreneurs”. They are the ones that succeed when a market shift is underway. Today this is not happening. Some of our city-bred entrepreneurs are more comfortable with California rather than Bharat. And some of our sales-oriented entrepreneurs are intimidated by the messiness of the new technology infrastructure.”

New Playgrounds need new Gameplay

“In a world where eKYC exists, and we can transfer money through UPI from a phone, and sign documents digitally – we are ready to deliver financial products on the phone and this is the disruption that is required. Access to credit drives the economy and with this new infrastructure, it is now possible to lend to the real India. However, it’s easy to give money, but the ability to get it back and keeping defaults at a minimum is the real trick. Even there we are moving towards seeing a radical improvement. Debt providers now have powers they never had and defaulters are being brought to book. Customers are now incentivized to build their own credit history to get better and lower interest rates over time. A new Public Credit Registry is coming to enable this at scale. But the biggest innovation is related to the dramatic shortening of the tenor. One can structure a one-year loan into 12 monthly loans or 52 weekly loans. This rewards positive customer behaviour and brings about the behaviour change that is needed.

There is no secret sauce here, it requires gumption – like that shown by Reed Hastings, founder of Netflix. He disrupted the TV and home video industry by first having the wisdom to go from ground to cloud and then again when they started developing original content. In both cases, he had little support from the board or investors. If you can reinvent yourself before it becomes necessary, you’re a winner but this is harder to do for a successful company. The legacy of success provides resisters with the clout to block change. The real beneficiary of Aadhaar based eKYC in the telecom world was not the incumbents but Jio – eKYC allowed Jio to acquire customers at an unprecedented scale and they saved INR 5000 crores on KYC costs as well.”

About iSPIRT

iSPIRT is a non-profit think tank that builds public goods for Indian product startup to thrive and grow. iSPIRT aims to do for Indian startups what DARPA or Stanford did in Silicon Valley. iSPIRT builds four types of public goods – technology building blocks (aka India stack), startup-friendly policies, market access programs like M&A Connect and Playbooks that codify scarce tacit knowledge for product entrepreneurs of India.

About AU Small Finance Bank:

AU Small Finance Bank Limited (AU Bank) started in 1996 as a vehicle financing NBFC, AU Financiers and scaled to touch over a million underbanked and unbanked customers across 11 states of North, West and Central India, prior to becoming a bank in April 2017. During this time, AU attracted equity investments from marquee investors such as IFC, Warburg Pincus, Chrys Capital, Kedaara Capital and recently went public when its IPO was oversubscribed ~54 times. Over the years, AU Bank, led by its founder Sanjay Agarwal, has created significant shareholder value with its equity value growing from ~$120 million in 2012 to current market capitalization of ~$3 billion.

Please Note: The blog was first published and authored by Matrix India Team and you can read the original post here: matrixpartners.in/blog

AI/ML Shift for SaaS Companies: Insights from SaaSx Fifth Edition

Early stage SaaS startups typically struggle with one of two things. When you are just starting out, the first struggle is all about mere survival. Will we find customers willing to use and pay for our product ? Good teams typically manage to find ways to negotiate that first challenge. The playbook has been sufficiently commoditized that if you execute well enough, you can actually succeed in getting those early customers. Its a challenge for sure, but is getting easier and cheaper to overcome — which takes me to the second challenge. Once you survive that initial phase, how do you continue to stay relevant and grow? For if you don’t grow, you’ve only prolonged the inevitable and will likely get disrupted into irrelevance by the next upstart that comes along. When you play in a commodity market, that’s the sad reality.

If you find yourself gaining customer adoption, you can be fairly certain that competition isn’t far behind. Unless you find a way to establish sustainable differentiation while you have that head start, you will ultimately die. And that differentiation now increasingly comes down to the value of the data flowing through your platform and how you are able to leverage it better than your competition. In other words, if you are not thinking about constantly learning from the data that you are gathering and enabling implicit intelligence via your products, the odds of survival are going to be stacked against you. Given the significance this topic carries for us at Swym, I was really excited to have the chance to sit in on Ashwini Asokan and Anand Chandrasekaran’s session on AI/ML for SaaS at SaaSx5. And they most certainly didn’t disappoint. With a lucidly laid out argument, their talk served as a strong wake-up call for the SaaS founders in the room that weren’t sufficiently worrying about this topic.

SaaS growth is slowing

Ashwini started out by underscoring the fact that SaaS growth was slowing in general. There’s no denying that most solutions are rapidly becoming commoditized — building a good product has gotten fairly prescriptive, costs have come down and barriers to customer adoption are a lot lower than they used to be. That inevitably leads to markets getting very crowded, making survival increasingly difficult. If you don’t stand out in very defensible ways, you will perish. To make matters worse, AI is slowly but surely causing entire categories of work to disappear — Customer Support, SDRs, Financial/Market Analysts, to name just a few examples. If those workers were your market and you were helping them be more efficient, you are in trouble because your market is disappearing with them. You better be evolving from being software that’s serving those people that in turn serve a function, to actually serving the function itself. Of course you do this with human assistance, but in a progressively intelligent fashion that makes you indispensable.

Embrace the platform mindset

In order to stay relevant, you really need to create a viable roadmap for yourself to graduate from being a simple feature that’s part of a larger platform (No one likes being told they are nothing but a feature, but this really is where most early stage SaaS products sit today) to becoming the platform itself over time. It can most certainly be done because the opportunity exists, and the access you have to your data and how you are able to leverage it is likely to be the most effective weapon to get you there. Think really hard about new use cases you can light up, automations you can now enable, important solutions that hitherto weren’t possible or practical — enabling those capabilities is what will give you stickiness. And you can in turn leverage that stickiness to allow others to build on the data platform you’ve created to expand your moat. Easier said than done of course, but it is the only path to staying relevant. Alexa, Salesforce, Adobe, Hubspot, and most recently Stripe with their just announced app store, all come to mind as stellar examples of execution on this strategy.

How should I be thinking about Data Science?

Anand followed that up with some really good advice on how to go about this, especially touching on what not to do, and it was clearly resonating with the audience. For instance, when he highlighted the fact that most AI initiatives that start with “Here’s the data I have…what can I do with it?” are doomed from the get go, a lot of heads in the room were nodding in agreement — seemed like a pretty common trap that folks had fallen into. Instead, his advice was to identify the end goal that mattered first, with the caution that this could be deceptively challenging. Once that goal is well understood, then focus on the data you have and the gaps that exist — and your challenge basically boils down to filling those gaps and cleansing/validating your data. Those are your most critical, time-consuming steps in the process for once you get the data quality you want, it becomes much simpler to build and iterate your model around that and figure out how to engineer this into a repeatable part of your workflow. The sub par data quality is one of the most common causes for AI projects “failing” and no amount of modeling proficiency will save you from bad data or a poorly understood problem statement.

Get on the train, but don’t lose sight of what got you here

I’m really glad to have had the benefit of listening to their talk in person, and now that I’ve let the arguments sink in over the past couple of weeks, a few truths have become indisputably clear in my head. The AI shift is not one you can ignore as a SaaS founder. If you don’t get on the train, you’ll likely end up under it. And no, getting on the train doesn’t mean simply attaching a “.ai” to your domain name and claiming success. It really comes down to internalizing your vision for why you exist, identifying in very clear terms how your roadmap to making that vision a reality will need to evolve given the AI shift. How do you see your problem space changing in the the next 2–5 years thanks to AI, and what does that mean for you? And given your existing strengths, what can you do to make the most of that shift?

Its important to remember that a lot of the fundamentals of a good SaaS story still don’t change. For instance, a sound distribution strategy is still very much necessary, for without sustainable access to customers, the rest of it is moot. Likewise, you want to be able to protect the access you have to your most valuable asset, your data) and lower the barriers enough for adjacent players to be able to work seamlessly with your offering. All those advantages you have still very much matter. Really, the biggest mental shift you need to make is thinking very deliberately about how the world around you is changing because of AI, and how you leverage those strengths so you continue to have proprietary access to the data you need and become an integral part of that change.

The article is authored by our volunteer Arvind Krishnan, CEO & Founder – Swym Technologies.

Deeper Strategic Partnerships – Pitching for Significant Scale and Co-Creating the Value

David Vs. Goliath had a happy ending, but the odds of beating Goliath as a startup are slim and most startups do not have a fairytale ending, unless…

At SaaSx5, I had the opportunity to hear Vijay Rayapati share his story of Minjar. This was a fairy tale with all the right ingredients that kept you engrossed till the end. With angels (investors) on their side, along with Minjar and Vijay’s prior experience, Minjar could have faced many Goliaths in their journey. Instead of going the distance alone, Vijay followed the Potential Strategic Partner (PSP) playbook (Magic Box Paradigm) and identified one in AWS. His reasons were clear, one of the biggest challenges a startup faces is distribution. And, a PSP can open several doors instantly, making distribution easier, revenue growth faster and gives the startup multiple options. As a startup, you need to think about a PSP early in the game at the “Flop” and not at the “Turn”. You need time to develop a PSP and you need to start early.

Identifying a PSP in your vertical maybe easy, but building a relationship with them is the hardest. It requires continuous investment of time to build the bond with the PSP such that they become the biggest evangelist of your product. This involves building relationships with multiple people at the PSP -from Business, Product & Tech- to make sure you have the full support from the company to scale this relationship without roadblocks. In the case of Minjar, with AWS as their PSP, it opened roads to customers, built their brand and also increased the value of the company. One of the highlights of the Minjar story was about the CTO of AWS, evangelizing the product at their conference. As Vijay ascertained “Invest time in people who can bring visibility and credibility to your company”. Focusing on these people is a sales channel by itself, and a Founder has to be involved in building that channel when it shows glimmers of hope. The Minjar story had a happy ending, because they invested more time in building their PSP relationship and limiting other marketing activities: they did not spread themselves too thin. This involved multiple operational changes like training, presenting thought leadership & co-selling at conferences, and making sure the end users at the PSP are successful in using your product.  It is also important to note that a partnership is not a reseller or transactional relationship. A partnership is a relationship of strengths, in which each entity brings unique skills and together provides exponential value to the end customer. Partnerships work when you have champions leading on both sides of the table and one of the best outcomes a PSP can provide to a startup is a strategic acquisition. A PSP is one of the best ways for a startup to exit, especially if you have not raised a lot of capital.

At Tagalys we have tried to develop relationships with PSPs; twice, and we seem to be making good progress today after one failed attempt. My learnings resonate with Vijays’ and some of them are

Persona: Not every large enterprise, who might also serve your target customer, is a valid PSP. An enterprise is an ideal PSP if the value you provide as a startup is something that can be incorporated into the product or process of the Enterprise, and without which the end value of the enterprise depreciates. If your startup is not important to the customers of the PSP, then they are not a match for your startup.

Timing: In your early days, a startup needs to focus on customers, customers and more customers. A PSP is likely to work with you only if you are part of the affordable loss for them. Very early in your stage the risk is too high for the PSP to consider the relationship an affordable loss. Remember, you are adding value to the PSP, hence any risk in the value proposition you bring to the table, is a risk to the end customer. Only after having proven your value to your own customers, will a PSP be willing to take you to their customer.

Credibility: Today, Tagalys works with many recognizable customers in the country and that makes the process of gaining credibility & trust easier. Your product is only as good as what your customer says it is. For a PSP to work, you need buy in from stake holders like the CEO, CTO & Product Managers and they are going to put their neck on the line if they can trust you. Customer references are the best channels to gain trust.

Lifecycle: As CEO, I have time to invest in meeting with various stakeholders at the PSP because our product is in steady state. This steady state of the product is theright time to speak with a PSP because your team can take on this additional responsibility. We also have a clear understanding of our expected outcomes, risks and upside in working with the PSP, hence our conversations are well guided and makes the discussion very productive.

Bill of Materials: While Tagalys is a line item in what the PSP provides to the market, we are an important line item who can potentially extrapolate the end value provided to the customer.

Not every startup can find a strategic partner, but one thing is for certain, as Vijay said, “You miss 100% of the shots you do not take”.

Antony Kattukaran is the Founder & CEO of Tagalys. Tagalys is a merchandising engine for online retailers, dynamically predicting what products to display across search & listing pages to increase conversion.

The Second 20 Confirmed Batch at #SaaSx5

2 days to go for #SaaSx5 and we are reaching our limits for this year. I had missed a few folks in the first batch of 50 announced, so including them along with  the next 20+ (in no particular order).

  1. 99Tests
  2. Appmaker
  3. Auzmor
  4. Botminds Inc
  5. CallHippo
  6. CIAR Software Solutions
  7. Cogknit Semantics
  8. CustomerSuccessBox
  9. Deck app technologies
  10. GreytHR
  11. Happay
  12. HotelLogix
  13. Indusface
  14. inFeedo
  15. Infurnia
  16. LogiNext
  17. Makesto
  18. Mindship.io
  19. Pepipost
  20. PregBuddy
  21. Recruiterbox
  22. ReferralYogi
  23. Swym

There will be one last list sent out tomorrow of confirmed participants. Really excited about the sessions which are shaping up at #SaaSx5

Product Teardown explained in 10 minutes (well almost!)

Last Saturday we had an awesome teardown roundtable in Chennai moderated by Suresh (KiSSFLOW) and Bharath (FreshDesk) 🙇🏻.. This was my first direct experience with the teardown. Six companies participated (PickYourTrail, FoodEngine, SysCloud, CustomerLabs, Tagalys, and ManageArtworks). While the entire session of 4+ hours was extremely intense, I want to quickly share with you in 10 minutes (almost) of what happens in a Product Teardown.

Teardowns are coming to your city. Please apply here (Limited Seats).

Product Teardown Framework

The iSPIRT product teardown (esp. for SaaS websites) is primarily structured around 5 key principles outlined below.

Idea 💡

What is the problem you are trying to solve? Who is your target user? It is critical to have a clear picture of your target user persona, their problem and how your solution solves their pain point. Essentially establish your problem-solution fit and articulate it for the customer journey from Discovery → Conversion.

Discovery 🔍

How do customers find your product? Is it through google search? Is there a channel they frequent? Have you identified your TAM (total addressable market), SAM (serviceable addressable market) and SOM (serviceable obtainable market)? Use this model to help identify strategies to have your SOM discover your product.

Website 🕸

Your website is the first & most important way to establish trust & relationship with your customer. This is true even if you don’t use inside sales. What is your first message or hook for your target user persona? Are they able to connect your product with their problem and the path through which they discovered your product? Are they able to understand how your product solves their problem, and why they should use it? Once they identify with your message and establish trust & credibility the rest becomes easier.

Sign up 💰

If the customer has understood your solution and found it fit for their needs, the last purchase decision is the cost. As Suresh said

If the cost connects, signup happens!.

WoW! reaction 🌅

Post signup, is there a WoW first experience? Whether it is a try & buy experience or a first purchase onboarding, it is important for customers to experience some instant gratification for the grueling journey they just went through. Believe me, making a purchase decision can be taxing. If you can make this journey pleasant and the final destination fantastic, you have a winning product 🏆.

Do go through the video above and hear Suresh’s simple explanation. And if you like what you hear remember you can apply here for a teardown in your city.

Coming soon – 2017 SaaS Survey

While I still have your attention, we are excited to announce that we would be launching the third edition (2017) of the India SaaS Survey in a week from now. This survey is an annual exercise conducted jointly by SignalHill and iSPIRT to gather valuable data for drawing insights which help various stakeholders in the ecosystem understand this space better.

Please click on the following link to access last year’s survey results

Please stay tuned to this space. We will be providing a link to this year’s survey very soon in an upcoming blog post.

PS

The amount of time & effort Bharath & Suresh provided to review and analyze each product before the actual teardown is simply inspiring. 🙇🏻. to their commitment to the community.

Guiding the customer journey from Discovery → Signup → Onboarding for SaaS Startups

Are you ready for the product teardown roundtable in your city

As Diwali marks a Joyous celebration and heralds a Prosperous New Year for all, we kick off a series of Product Teardown Roundtables to help our SaaS startups prepare for a successful year ahead. This series of PlaybookRT will focus on Guiding the customer journey from Discovery to Signup & Onboarding.  The teardowns are being planned across our startup cities in quick succession (see tentative schedule below). We kickoff with a teardown RT in Chennai which will be facilitated by Suresh Sambandan (KiSSFLOW)Bharat Balasubramanian (FreshWorks).

Apply to get your slot here. (Limited seats).

Why are product teardowns important? For Explosive Growth!

Explosive growth is a common pain point for founders across startup stages, be it an early stage startup or a late stage startup. One key attribute to explosive growth is to make your customers market for you. Quoting from the article Six attributes of Explosive Growth Startups,

Nothing parallels word-of-mouth marketing

Why? Because the customers do this work for the startup. If this is to happen for your product it is important for your customers to have a clear-cut understanding of your product proposition, discovering it’s ROI and a WOW no-brainer experience of signing up and using it.

Our product teardown session is focused on exactly this evaluation for your product. Using our community of peers and leading practitioners, you would go through an intense journey and visualize how your potential customer discovers, understands, signs up and connects the product proposition and ROI to their needs. If you do a damn good job about this, you gain a big advantage because you don’t have to work so hard for marketing leads, getting you further on the path to explosive growth.

The teardown model

In this playbook series, we look at how to get your messaging right, and building a website and signup/on-boarding flow that converts with very little human intervention. This roundtable would begin with a deep dive into the company’s Idea, Discovery Process and navigate through the Landing Page, Sign Up, and its “Wow” experience. The format of the playbook is built around quick 10 minute demos, followed by peer-feedback moderated by SAAS founders & experts who have already built successful SAAS businesses.

Past teardowns

You can read some of the previous teardown experiences from the founders who participated.

Registration and Pricing

If you are keen to attend this RoundTable, do let us know by filling in your details here. We will confirm your seat subject to availability. All RoundTables are conducted pro-bono. The only payment you have to make is to provide your undivided attention and active involvement in the process. Playbook-RoundTables are a dialogue and there’s no monologue. None!

Teardown Roundtable Schedule (tentative)

City Date Time Register
Teardown RT in Chennai 4-Nov-2017 (Sat)  11am – 4pm Register
Teardown RT in Bangalore 11-Nov-2017 (Sat)  11am – 4pm Register
Teardown RT in Delhi 18-Nov-2017 (Sat)  TBD Register
Teardown RT in Hyderabad 25-Nov-2017 (Sat)  TBD Register
Teardown RT in Pune TBD (Dec) Register
(if interested please apply)
Teardown RT in Mumbai TBD (Dec) Register
(if interested please apply)


Notes

These are founder invite only events. Date, Time & Venue details will be sent along with the confirmation.
Since there are limited seats, we would request you to kindly apply at the earliest.

Playbook-RoundTable is one of the most sought after community events of iSPIRT. It’s a gathering of 12 like-minded product startups who are beyond the early stage. RoundTables are facilitated by an iSPIRT maven who is an accomplished practitioner of that Round-Table theme.

Why No One Responds To Your Customer Success Managers

Who am I writing this for: people who are building or managing a Customer Success function.

What’s my key point: your CSMs need to provide value, and for that it’s better they specialize based on industry (or business-type) versus round-robin or regional distribution.

Our experience with the Hubspot CSM

When we bought Hubspot as our marketing automation platform, we were assigned a customer success manager (CSM). Our CSM did everything right; she got the entire marketing team and the CEO on a call, asked us questions like what will make us successful, what does failure with Hubspot look like, what our goals were, and more.

Then she gave us links to all of Hubspot’s training videos and said she’ll get back to us with a preliminary marketing plan that’ll help us get started. So we waited. When we got the plan we realized she didn’t know that we were a SaaS product. Instead, she mistook us for a marketing agency. It could mean that our website at the time did a shitty job, but I invite you to have a look for yourself.

After we corrected her, she got back with some other campaign ideas which were all a variant of:

  1. Create an ebook
  2. Add a bunch of automated, follow-up emails

Unfortunately, there was zero context of SaaS, about our goals, about how a visitor signing up for a 30 day free-trial is better than getting back to us to talk to Sales. We felt like she had very little understanding of who we were, of martech, or of the SaaS business model.

And Hubspot had 24/7 phone support for our plan level, has all their KB and documentation on the web, has all their training videos available in the Academy, so basically we soon had no need for the Customer Success Manager. That’s a good thing, when customers have everything at their disposal that they don’t need a human touch.

But it’s bad because we had zero need of the CSM. We knew she couldn’t really help us with our key goals. We knew getting on a call with her was not going to bring us much value. Soon enough, we just completely ignored her. And it wasn’t her fault. I’d put it on the person who planned that CSMs will be distributed region-wise without getting the ability to gain experience and expertise in any one industry.

Our experience with the Google Adwords rep

Our experience with the Google Adwords rep has been worse. While the Hubspot CSM just checked-in once in a while if everything was okay, the Adwords rep seems intent on getting us to run more campaigns and campaign types, tweak settings to what we know isn’t optimal for us (they might be good for Google though), and make us spend more budget in general.

She’ll make promises about doing some competitor benchmarking and give us best-practice recommendations, or going through our account and telling us how to optimize, but invariably those aren’t relevant and I now actively avoid getting on calls with her. In fact whenever anyone in the company or in my network asks me about talking to their Adwords rep, I discourage them from it.

So what do I think is the solution

Context. To be valuable, the Customer Success Manager needs to know and understand my problems, and be like a consultant who has seen these same problems and solutions at so many different clients that they can give me useful feedback, leading me to trust and respect them. In fact, the best case scenario would be if I pay extra to get a few more hours of their time every month or quarter.

After all, it’s their expertise that’s valuable, not the fact that they’re easily available.

Other reasons why industry based specialization is valuable

  1. Content marketing: Something written by a CSM who is basically an industry expert is extremely valuable and immediately appeals to readers, because in their language, in their suggestions and in their content resonates the voice of the customers.
  2. Product development: I’ll wager that they’ll end up giving more valuable product feedback than even Sales to your PM team because while Sales will close a deal and move on, it’s the CSMs who then work with customers to actually understand and solve their problems.
  3. A new revenue line: CSMs so valuable that customers pay for their time and help. Like the Forresters, Gartners or ZS Associates of the world.

Guest Post by Siddharth Deswal, Lead Marketing at VWO.

I am the Product Manager

Of the various hats I have worn all these years – Founder, Sales guy, Deployment Specialist, Level 1 and Level 2 Support, DevOps, Coder, Cheque depositor – I have come to realize I was a Product Manager all along – right from the get go.

Putting a label on what you do is extremely important. It helps you define the job you do, appreciate it, read more on it and helps you improve on that particular skill.

If you are the guy/girl in charge of making the Product among the Founding Team – you are the Product Manager. Say it out aloud – “I am the Product Manager”. The fate of your entire Startup lies in your decisions.

All other designations – CEO, CTO, Director, Co-Founder all are important – for the outside world and your team-mates – but nothing is as critical as the “Product Manager” hat you are wearing now.

Strap the Product Manager Hat tight.

When I gave Sales demo – I was not trying to get a Cheque out of the customer. I was listening to their pain points, and my mind was frantically scanning to see how my Startup could alleviate those paint points. I was trying to find patterns among Customers – so my solution can solve them all. I was trying to see how much value we can give them, and price our product as a fraction of the value ( and not just features ).

When I was paying the monthly bill for AWS account – and saw it was increasing gradually, asked myself – Are such resource hogging servers really necessary – and promptly turned them off – and found better cost effective alternatives. Also when I plan a feature, I keep the cost in mind – I am not going to get sold on the hype of a technology.

When I got a customer to go live – I realised how a few small features created some of the biggest headaches and heartburns. Promptly booted them off or tweaked them.

When I had to do Marketing – do SEO, or write content for Brochrures, or create Competitor analysis – I had to analyse inwardly as well as the competition and could identify the areas we were strong and weak. I knew what areas we could pull ahead of the competition – become more stronger, and what areas we had to improve – so we cannot be beaten down with.

If you are the Product Manager of a Startup – and working 9 to 5, doing a few customer interviews, talking to the CEO/CTO/Founder, browsing competitors website/Apps, STOP – you have to do more. [ ps : Startup founders, if you have hired Product Managers – here is what they have to start doing ]

1. Accompany the Sales guys in a few demos. In fact you should constantly do this – product keeps changing, market keeps changing, competiton keeps changing.

2. Get your hands dirty and deploy a few accounts – from start to finish.

3. Write the next set of marketing material, do the next Competitor Analysis document yourself – instead of just giving inputs.

4. Do SEO, plan the adwords campaign yourself.

5. Be the DevOps and/or pay the AWS bill from your pocket and get it reimbursed – and see for yourself that one cool feature which hardly anyone uses is costing a bomb.

And for Founders of Product Startups – Say it aloud. Print and Stick this in big fonts right in front of you.

“I am the Product Manager”

Guest Post by Venkat Kandaswamy, CoFounder, ApartmentAdda

85 Things I learned being a CEO

  1. It is going to be an extremely hard job. No amount of preparation or education is going to prepare you for what it demands.
  2. You will feel like quitting at so many instances. Don’t, just persist.
  3. It’s a lonely job. There will be no one who you can tell everything about your work.
  4. Uncertainty is the hallmark of entrepreneurship. You have no guarantee that you will last a year, at times a month and sometimes even a week. Learn to embrace this uncertainty.
  5. You will wake up crying at times. Don’t fret about it, deal with it.
  6. If you are married, your spouse will play a very crucial role. They are going to be the only person who you can tell everything. They can give you the third-person view to take unbiased decisions. They are going to be your rock when you are the lowest.
  7. Being a CEO is all about transitioning from doing everything in the early days of the company to delegating everything as the company matures.


Key Responsibilities

  1. You are going to make a lot of decisions in the company. If you are overly careful in your decision making you will slow down the growth, if you are too impulsive you will end up taking the wrong decisions.
  2. Setting the vision and talking about it is your responsibility. You cannot crowd-source the vision from your team. You must listen to everyone but at the end you set the vision.
  3. You define the culture and most importantly you guard it. People will ultimately emulate what you do.
  4. As a founder-CEO it’s your number 1 duty to ensure that the company never runs out of money.
  5. CEO should always be involved in the product. You can go away from any other function but not product.
  6. The success of your organization depends on how well your team is equipped. No one comes knowing it all at the job, it’s your responsibility to ensure that you train everyone.

Decision Making

  1. You will never have the complete information that you need to make decisions. Your gut/hunch will play a big role in such situations.
  2. It may sound counter-intuitive but gut-thinking can be developed. Great founders take right decisions not because they have all the information but because they have vast amount of knowledge. That’s what constitutes the gut-thinking.
  3. You will be wrong more often than you will be right. The trick is to detect your mistakes early, learn from them and never repeat them.
  4. You must stand by the wrong decisions you make. People will respect you if you are willing to accept your mistakes.
  5. Take time to explain your decisions. People around you need to know what is the thought process behind your decisions.
  6. Don’t fall in the trap of over-deliberation. Most of the times speed is more important than the right decision. You will always get time for course correction later. Good is better than best.
  7. There will be times when you are going to take decisions that nobody will believe in. If you have 100% confidence in yourself, go forward unabashed, because no one else has the full picture other than you.
  8. When taking strategic decisions, step out of your day-to-day operational work. Decompress completely. Swipe the board clean. Forget everything that’s going on currently. And then think about whatever you want to think. Think, how your future will change if you take this decision and not what benefit your present will get out of it.
  9. There will be some decisions that can significantly alter the direction of the company. You can’t always white-board a conclusion out of them. At times, you need to mull over them, you need to let serendipity happen.
  10. All good decisions seem obvious in hindsight because it’s easier to explain a chain of events, rather than predict one. Don’t mistake yourself in believing that you have found a pattern.
  11. For decisions like letting a misfit go, shutting down a product line etc. it’s always better to do it sooner rather than later.

Culture

  1. You are the guardian of the culture. You define what is to be appreciated and what is not acceptable. If you don’t do it ardently you are fucking up the culture.
  2. It’s always easier to hire people who believe in your culture than to try and convince non-believers. If someone doesn’t fit your culture, don’t hire them no matter how good they are on skills.
  3. You have to speak, shout, repeat, chant, recite and roar about your culture. Culture becomes culture only when it’s spoken about all the time.
  4. There is no definition of what a good culture is. More than being Utopian it has to have universal resonance.
  5. Your culture is never set in stone. The basic tenets will be defined but the shape and form of culture will rapidly evolve as the company grows.
  6. A good culture must breed 2 things — respect for each other’s work and open communication.

Leadership

  1. Soon you will realize the impact you can create through your individual contribution is meaningless when compared to the impact you can create by leading people.
  2. The best way to lead is to lead by example. A good leader tells you how it’s done, a great one shows you how.
  3. As a leader, the biggest thing that you can give your team members is your time. A lot of them will go through a bad phase or will be clueless about what to do. At those times, they need to know you are there.
  4. People will look up to you. At times, even for things in which they are far more skilled than you. You don’t have to take their decisions, just provide them your confidence so that they can take their decisions.
  5. Good leadership is when people are not afraid of bringing bad news to you.
  6. Politics starts at the top, if you start taking sides, everyone else in the company will too.
  7. In no situation can you afford to shout at your people. Things will go wrong, you will loose your calm, you can be stern with them but not disrespectfully shout at them.
  8. People need inspiration. To be a leader you will have to inspire them and it’s best if you do it by story-telling.
  9. Talk to/address the entire team at regular intervals. The format and frequency depends on you. It could be for 30 mins every week or 3 hours every month. I do an ‘All Hands’ every month. It has been 3 years and the All Hands has always had above 80% attendance.
  10. Very few employees are going to critique your decisions, particularly if you are a vocal leader. It’s very easy to get blindsided because you will rarely get a critical feedback. There are two ways to mitigate it a) have a close network of advisers who can say harsh things to your face b) consciously create a culture where people are not afraid of you.

Self-Management

  1. The first thing you need to learn is how to manage your time. Your time is a scarce resource, you must be very protective about it. Say no to anything that doesn’t add value.
  2. Learn to manage emails. No matter what communication tools yor organisation uses, you cannot escape emails. This particular trick has been extremely useful for me in managing my inbox — https://blog.hubspot.com/sales/email-multiple-inboxes#sm.000a54r0d14a2ct5r3d1yoluod5vf
  3. Manage your calendar — every Sunday spend 30 minutes analyzing your calendar for the week.
  4. Learn to manage your cash-flow situation. You need to keep track of the following every month — cash outflow in the month, revenue collected in that month, money spent on salaries and money in the bank. Setup a process so that you receive this information regularly.
  5. Every thing that goes on in the company will come to you. Very soon it becomes over-whelming to manage this information barrage. You need to learn to deal with it.

People Management and HR

  1. Hire a HR early in your company. 30 employees is the right stage to hire a HR.
  2. The sooner you introduce an objective performance management system, the better it is. In the early days you know about what everyone is doing, but as you grow you will loose control. The right stage for introducing a formal process is when you are 40–50 employees.
  3. One on Ones are absolutely critical. Ensure that you do one-on-ones, at least once a month, with everyone who directly reports to you and so do the other leaders in the company. In his book ‘High Output Management’, Andy Grove talks about the right way of doing one on ones.
  4. Set Goals — Every employee needs goals in order to contribute effectively. Most of the time people don’t under-perform because they don’t want to work but because they need direction. A quarter is the right time frame to set goals.
  5. Providing Feedback — Provide both negative and positive feedback with the same demeanor. It’s very important to come prepared when giving feedback. Provide negative feedback not based on your feelings but based on facts. Don’t use the Sandwich Approach, discuss the positives and the negatives as is.
  6. Just providing negative feedback is not enough, it’s your duty to also provide them a direction on how they can improve. If you are feedback is not accompanied by how they can improve then you are wasting their time.
  7. Appreciation — Everyone needs appreciation, do it often. Appreciate people at the time they do well (don’t save it for later) and be genuine when you appreciate.
  8. People don’t leave because they are underpaid, they leave because they feel you haven’t been fair. You are not supposed to compete with the best paymaster out there, but you do the best you can and they need to know that you are being fair.
  9. Setup an on-boarding process. When the company is small it’s easier for people to understand everything happening in the organization. Once you are beyond 30 it can be daunting for a new employee. Setup an on-boarding process where they get introduced to the product and people.
  10. Set a rigorous reporting process: Having access to the maximum amount of information across organization is going to be your biggest asset. As the organization grows you will find extremely hard to get all the information. You need to set up a rigorous process of updates with your direct reportees. Every function head should share updates with you in-person as frequently as every 14 days.

Meetings

  1. Whether you like it or not, you will have to do meetings. The point is how to make sure that your meetings are productive. There are only 2 types of meetings that you should attend — a) where you have to take a decision b) where you get updates/information. The productivity of the first depends solely on you and the latter on how you have trained your team. Step out from any meeting where you are not going to take any decision and you are not getting information you already don’t have.
  2. In his book High Output Management, Andy Grove talks about the concept of ‘Chairman of a meeting’. This is the person who is going to lead the meeting, facilitate discussions and take decisions. You will be the chairman for a lot of meetings as a CEO. If you are not going to prepare for these meetings you will waste everyone’s time. As a rule of thumb for a 1 hour meeting, you must spend at least 30 minutes in preparation.
  3. You don’t have to take charge of every meeting. As founder, you would be tempted to do that in any meeting you are part of. Refrain!
  4. Explicitly ask people if you are needed to be part of a meeting. Wherever you are needed, ask them for an agenda and also ask what is expected from you in the meeting. Else say no.

Hiring

  1. No matter how careful you are, you will make wrong hiring decisions. There is no definitive science for interviewing so don’t beat yourself up for wrong hires.
  2. Add a layer of objectivity in hiring. Every role should have some form of objective evaluation, like a task.
  3. Don’t interview people on what they have done in the past, interview for the role they are coming in for.
  4. Go prepared to interviews — put down a list of questions that you definitely need to ask. You don’t have to ask them in any specific order but you must ask all the questions.
  5. Ask your interviewers to give a Yes, Weak Yes or No. If there is a single No then don’t hire. There should be a majority of Yes in the verdict.
  6. Ask people where they screwed up in the past. Their failures will tell you more about them, than their success.
  7. Set an interview target for yourself — commit to doing at least 15 interviews per week in the first 2 years.
  8. Don’t look for patterns, there are none. Some people are good at giving interviews some are not.
  9. You need to create a circle of people (not necessary everyone in the company) whose loyalty is unshakable. These are the people you will rely on when shit hits the ceiling. Look for this trait when hiring key people.

Fundraising

  1. Whether you like it or not you are always fundraising. Practice the pitch incessantly, so that you can pitch anytime, anywhere.
  2. Fundraising is not a milestone, it’s not an achievement, it’s just a necessary evil.
  3. Fundraising is about story-telling. More than facts, investors are interested in your story.
  4. Choose your investors carefully. These are the folks with whom you are going to take some of the toughest decisions for your company, you want someone you can play with.
  5. Choose friendly terms over extra money. It’s okay to get half a million less in the bank if you can get less restrictive terms.
  6. You don’t raise money when you need it, you raise money in the good times, and as soon as possible.
  7. Raise as much as possible. Your company can fail because of reasons completely out of your control. Having a war chest at that time could be invaluable.
  8. Become immune to rejection. Most of them will turn you down not because you are not good but because they don’t understand what you do. 99 rejections are worth it for that one who says yes.
  9. Don’t let fundraising get over your head. It’s your number 1 duty but not your only job. You can’t compromise with running the company just because you are fundraising.

Things you should do

  1. Read voraciously, set a target to read at least one book a month.
  2. Network — In the early days of the company meet as many people as you can. In the later days of the company, choose who you want to meet and reach out to them.
  3. Take holidays — don’t feel guilty about it, you need it more than anyone else. Take spontaneous and frequent holidays, you will be amazed at the kind of thoughts that will come to you when you are relaxed.
  4. You will have to do a lot of public speaking — internally to your employees and externally to the world. Rather than being forced to do it, do it consciously. Practice before every major speech.
  5. Your job is to protect the downside of the company. The upsides will anyways take care of themselves. You should be constantly sniffing for what can go wrong.
  6. Exercise — Being a CEO will take a massive toll on your mental health. One way to keep your sanity is to exercise. Make it a habit to exercise at least 5 days a week (you can pick a sport).
  7. You are always negotiating — negotiating with your investors, your clients, your employees, prospective hires and everyone else. Master the art of negotiation, at the end it’s all give and take.
  8. Every time you say ‘Yes’ to something, you will be saying ‘No’ to something else. Choose your ‘Yes’ wisely.

Guest Post by Sachin Gupta @ HackerEarth. Original Post can be seen here

Every scale has an expiry date #PNgrowth 2016

It was all about #GoodScale at #PNGrowth2016 !!

Pitching to Peers in Gurukul Style

I participated as a volunteer this time around and missed the keynote in day one since I was busy in printing #MindFlip worksheets for 50 odd entrepreneurs. These entrepreneurs were handpicked by a very credible set of people who knows what #Scale means to B2B products.

Pallav and Shankar Maruwada did the priming by asking all the founders to reflect and redefine themselves within a framework that was designed carefully. Here not only they were asked to redefine who they are but were asked to open their heart and mind to play ping pong shooting game with co-participants sitting next to them. Learning to allow others become your mirror is a great way to identify your mistakes faster. These hard hitting peer challenge just bring the hidden self and does the world of good and the benefits will longer. Once they know who they are, they were told to pitch for a different context and at a different level. Mentors and peers played a critical role here and acted as an investor, prospective employee, customer etc.

When Phani talked about how he was lucky and all that happened around him at RedBus just happened and he just sailed through the wave. With all that humility he then explained if he had to present something like Girish, it will be something. The contrast was visible and it was beautiful as nature painted on a canvas. Girish spoke about #GoodScale he narrated the techniques that helped him to shape up Freshdesk. These techniques are not #GrowthHack these are practices that have been experimented, hammered and perfected. The honesty and ability to open up without ego, self-promotion was incredible to see.

Learning sales funnel from people like Aneesh, Suresh, Girish is like dream come true and Aha moment for many. These are something that can be practiced and implemented the next day !!

Manav re-iterated that it’s all about Sale-Sale-Sale for the founders to win. It truly amazing to listen how he closed big deals or key hires over cup-of-coffee, I personally loved the way Manav has navigated the journey by increasing his target market size with one step at a time. Solving one problem at a time and then moving to adjacent space which made it easier to traverse instead of starting big from day one.

Preparing for Final Pitch Selection within a cohort

The mentors were in no mood to get the feel-good emotion to sync deep inside founders, while some of them were in the go-kill-it mood, Sanjay Anandaram, and Sanjay Deshpande did a Jugalbandi and helped people to come down to earth from cloud 9. While everyone one builds a multi-billion dollar business it is also important to understand what the expiry date for the things that we do and then taking the smaller exit when appropriate does a world of good to the founder and as well as the country.

There were some discussions around “let go” — while good scale requires founders to realise it’s important to let go things and have other participate in growth, however depending comfort one could choose to hands-off-and-eyes-on model. Lots of participants participated in this discussion and shared how this could become the biggest bottleneck to scaling.

Building #ProductionNation is not an individual effort and is no less than #FreeDomFight for a country like India. People compare everything we do with #SiliconVally. However, I can’t imagine whether #PNGrowth is possible in #SiliconVally where successful founders will come and spend 3 days apart from spending days together in preparing the content and structure of the program during the last couple of months. The selfless attitude and ability to open their armouries to a group 70 odd startups are simply amazing to see.

Signature Club Resort at Brigade Orchards was amazing in the evenings. Hanging out with 50+ founders with DJ Music and beer gets even better. Ashish Tulsian and Vinod Muthukrishnan are shining star and we discovered them during last PNGrowth. After the heavy and long day, there is no better way than chilling with them. Their unique ability to hold a large group of people and make them laugh is just unthinkable and you can only relate to it if you have been part of the show before. This time the VC teardown in front of a VC was just the killer effect of the whole event !!

Mentors and Volunteers

Hope this has shaken and woken up some of the founders and they will carry all that they got and move from #HappyConfused state to a 100 Million dollar or more startup in years to come.

I am so fortunate to witness this event. Great learning for me as well even though I was not able to sit through all the sessions. My biggest learning: everything has an expiry date and learning how to map that to what I do is key to success small or big !!

When sales hijacks your product roadmap

Hey product manager, let me remind you of that time when you had the perfect roadmap for the market. You had it all sorted out (finally!) with engineering and were clear about what you’d build. Your teams had already worked on a few sprints and you felt that this time, you’d be able to get the product right.

when-sales-hijacks-your-product-roadmap

But then, your sales person turned up and said ‘I’ve just promised feature x to the client. We have to build it.’

You gnashed your teeth and got into an indignant fight.

The sales person just made your carefully crafted product roadmap look pointless.

How could he do this? You had just sent out your roadmap last month and said this is what he was getting. Why does sales always do this? Why can’t they just sell what you have, instead of pushing for what you don’t?

You take it up with your management, and maybe even the CEO, but finally are told that this client is just too critical, and you will have to build what the sales person wants.

You grimace, and feel all your passion drained out. Ok, you think, I’ll do it, but under protest. It’s my job to get it done, but it’s no fun anymore. Maybe you should just look for another job where they trust product managers over sales….

Let’s break out of the reverie. This is something that happens in a lot of organizations.

Most product managers have an ambivalent equation with sales. They need the sales team to bring in revenues, but hate having to accommodate what the sales persons ask (and always at the last minute at that!).

Is there a way out? Can you safeguard your product roadmap from mutilation?

To be honest, it depends on how your organization is structured and power equations within. But there are things you can do as a product manager to prepare for something like this.

Learn how sales works

A large number of engineers turned product managers look down upon sales as a necessary evil. They’re far more comfortable in the deterministic universe of building a product. Sales seem to be a profession for smooth talkers who care only about their numbers and not about the intrinsic product itself.

Unfortunately, this worldview makes life difficult for all involved, but is like a self-inflicted wound for product managers. You can complain about sales around water coolers all you want, but it’ll help more if you learn to appreciate how sales works.

In most of my product manager trainings, I ask product managers and aspiring product managers if they have worked with sales earlier. Many say that they’ve just accompanied a sales person on a customer visit. Often, they would be briefed by the sales person just before the meeting, and requested to not comment on anything beyond the demo. ‘Leave the relationship part to me,’ the sales person would say. If, during the meeting, they strayed from the brief, the sales person would try gesturing frantically to not say something that puts the deal in jeopardy. They usually walk out thinking that they should just send a junior the next time for the demo.

In my experience, I’ve seen that good product managers have a great understanding of the sales process and see themselves as team players in getting customers to choose your product/solution.

But I also find that most product managers have only a vague idea of how sales works. Sales is also a process, and most good sales folks have a keen understanding of how to get started in the market, generate leads, convert leads into conversations and go through the consideration-preference-sale process. Sales, especially enterprise sales, is a lot more strategy & structured approach than just numbers.

My recommendation to product managers who haven’t been through a sales cycle is to get a buddy in sales, and understand how they work. Not only does it make it easier to talk to them when it comes to client asks, it often gives surprising insights about how your product is used and/or what competitors are building.

Have different versions of your roadmap

Many folks are surprised to hear that you should have different versions of your roadmap. The sales team often uses the roadmap to sooth client concerns on whether your product/firm sees a long term view for something they need to invest in.

If you have the same roadmap that your development team uses, you risk the sales team aggressively committing to features to win the deal. Often, clients are speaking to multiple potential vendors, and there is risk of competitors learning about your product roadmap. There is also a risk that if the client signs off on a deal based on your roadmap, you have very little slack if things go awry (don’t they always?).

It often helps to have a ‘light’ version of the roadmap for the sales team to discuss with the clients. You could share the development roadmap in confidence with sales, but insist that only the light version be seen by clients. That way, the sales person also knows that he can reach out to check if he needs to share something from the development roadmap with clients on a case-by-case basis.

Negotiate

Most product managers know the art of negotiation with engineering teams to get them to agree on what to build. But good product managers also know how to negotiate with sales teams.

What does this involve?

Often, it means having the right amount of flexibility in your roadmap. Don’t look at yourself as a ‘mini-CEO’ who has to call all the shots for the product. At the other end, have your viewpoint that’s not based on what engineering can build or what sales tells you they can sell (this is why it’s important to know your customers well).

I’ve been lucky to work with sales folks who respect a well-articulated viewpoint on why a particular client ask will take the product down a path that will make it difficult to adapt for other changes later.

These conversations take the path of ‘how do we make this deal work?’ What usually follows is a negotiation on what we can tell the client, even if we can’t fulfil all his/her asks. This helps build a joint pitch on what we think is best for your business.

This doesn’t always work, but the process of negotiation with the sales teams often help build respect for your capability and reasoning as well.

Another factor that I’ve found helpful is to have a strong list of priorities for your product, and areas where you can be flexible. That helps in the give-and-take of the negotiation.

You may not always be able to prevent your roadmap from being hijacked, but you can minimise its impact with this approach. I’d love to hear your thoughts on this topic in the comments.

 

6 challenges faced by early-stage startups that some effective tools can help you combat

Harbouring an idea in your head is one thing. Taking the leap of faith to execute, nurture and grow the idea is an entirely different ball game.

It calls for a tribe of people that we call Entrepreneurs.

Fortunately, this breed is on the rise. They make this game look deceptively simple.

Apart from the fact that you have to face a fair amount of social ire and family grumpiness, launching your own business and getting it off the ground comes with its unique set of challenges, the foremost of which is the problem of “scarce resources”. Your money tree will take months, sometimes several years to sprout.

One of the most valuable lessons we can learn is that there are several tools and apps for various functions that have grown all over the internet to help us overcome this “limited resource syndrome” that startups acutely suffer from.

We faced this challenge of limited resources in our early days too. In our experience, here are some of the biggest challenges faced by an early-stage startup that the appropriate tools can help you combat.

Bringing order to your sales pipeline

Sales requires a combination of people skills and product know-how. It also demands that we make sense of what the customer wants, and quickly dive into seeing what they need.

While getting those first few paying customers is about networking and selling within your circle, there comes a time when you have to start casting your net wider.

It is important at this point to have a process and tackle sales in a methodical manner.

While you can make do with Excel sheets for the first few months, they will add to the chaos as your customer base grows. Investing in a CRM tool becomes mandatory at that point.

This simple tool will allow your sales team to focus on selling and not waste time on decoding the sales pipeline and customer information that would be scattered all over the place without a CRM.

Working together as a team

Needless to say, one of the biggest assets for a startup is its people. For an early-stage startup, the people are the company’s only assets.

A startup environment requires people to fill multiple shoes and wear multiple hats. Not to mention that people now consider remote-working a norm – thanks to technology.

Team collaboration tools can help a great deal with keeping the team together and assist the project manager in assigning tasks in a more meaningful manner. It’s easier to keep track of projects and the status of tasks, and come up with contingency plans better.

Plus, it helps keep the sense of purpose alive in the team.

Without a tool to keep track of what the entire team is working on, it is easy to lose sight of the priorities of things that need to get done.

Creating a brand following

In the bygone era, marketing used to mean plonking billboards on the highway or buying TV spots for blaring commercials. Today, marketing means mastering the nuances of social media. It means building an email following. It means adding value through useful content and leveraging SEO.

Typical tools like social media scheduling tools to manage multiple social media accounts, email marketing tools, content management tools and analytics tools that integrate with your website are must-haves to keep your visitors and customers engaged.

This is also a way for the team to measure, analyse and learn from their experiments. Building on what works and scrapping the things that don’t is an important step forward in the growth of the company.

Design

Design is not just about aesthetics anymore. It has become an absolute necessity.

According to research, coloured visuals can increase your audience’s engagement with your offering by 80 percent.

Whether you need a website designed, a blog image or simply an image to go with a social media post, there are several tools to make your life easier – even if you have never been anywhere near a design school in your life.

Managing the monies

Amidst all the high-energy events in a typical startup workday, finance can be the one thing that will be happily relegated as the last priority – only for it to get back at us with a vengeance during those closing days. Not to mention that most startups don’t exactly consider hiring a dedicated accountant at this stage.

Here again, somebody has mercifully created tools for the non-accountants to look up and still smile after “crunching numbers.”

If you have the resources to invest in just one tool, let this be it. Trust us, you’ll thank us for it.

Connecting with your customer

“Your most unhappy customers are your greatest source of learning”- Bill Gates

Understandably, most entrepreneurs seek to meet a critical need in society that can be fulfilled by offering a product or service.  However, the most well-planned startup can fail in the blink of an eye if they lose sync with the customers who use their products and services.

Customers are a huge part of the startup ecosystem and being accessible to them at every turn can define the success of the product or service.

It becomes imperative that we establish, open and maintain channels for valuable dialogue with our customers while making sure we are listening to them. Again, some amazing tools make this a breeze, while also acknowledging that a startup does not have deep pockets.

To sum up, it’s an excellent time to be an entrepreneur. Countless opportunities exist, and more and more free resources are available to entrepreneurs than ever before.

Tapping into these resources and advice effectively can be the thin line between the success and failure of a startup.

For a detailed list of the tools that helped us grow during our early days and our experience with them, download our ebook here. (There’s a lot of tips and some ideas for jugaad as well).

Guest Post by Shivakumar Ganesa(Shivku), Co-Founder and CEO of Exotel, a leading cloud telephony company

Setting up Inside Sales to sell SaaS into US – Learning’s from iSPIRT #PlaybookRT

Inside Sales was presented as one of the strategic levers for SAAS companies selling to the US market at a recent Google Accel event. no wonder when

iSPIRT arranged for a round table on this topic there was a buzzing interest.

If you are not familiar with the round tables of iSPIRT check them out here. (Highly recommended)

Suresh of kissflow.com who has been successful in cracking the US market with his DIY Self-service workflow product conducted this round table.

Agenda

What was interesting is when the group was setting an agenda. It sort of covered areas from the complete funnel from marketing to Sales. Here are the sections and key learnings that were discussed in each. End of the article we also have links to tools and resources that can help.

Leads/Marketing
This is concerned with generating leads. These might be signups on your free-trial self-service product or request for demos. [Inbound]

These might also be leads that you have gathered by list building/event which you might be nurturing through email marketing or Inside Sales for outbound.

Learning

  • SEO is a must and early start helps
  • Start with a keyword list (Commercial intent) and then keep building backlinks and writing content. In Suresh’s words its do-able and needs discipline and not hacks. [In my own opinion we as Indian entrepreneurs have done a shoddy job in this area and need to learn this fast]
  • Keywords, which you cannot rank on, go with PPC. The typical signup costs discussed were between 50 USD – 200 USD per signup / MQL
  • Data for outbound prospecting is very important; Mass Emailing does work but it is super important to spend time on defining segment well and crafting messaging which is relevant.
    [In my opinion one would actually have to go a step further with personalization if you are not a mass market solution and selling to mid-large markets]
  • Having a strong Web Engineering team which works on Google Analytics and conversion optimization is a must

Inside Sales

Roles

You may be calling this team with different names. In theory the following are possible

  • Lead Development Rep – Qualify Inbound leads
  • Sales Development / Account Development – Generate Qualified meetings from outbound
  • Other names discussed were BDRs (Same as SDRs or some times channel)
  • Account Executive – Someone who closes
  • Product Specialist – Someone who knows product well and closes
  • Should you have a product specialist closing or Account executive?
  • Self-Serve product with low complexity AE (sometimes even an SDR) can close
  • If a product requires mapping use cases configurations (Like KissFlow) then Product specialist are in the best position to close
  • If you selling 50K + ACV then a field Sales or experienced AE in the US is recommended.

Where to Hire Inside Sales

There were different thoughts and opinions on what talent can fit into this role. Typically the options are

  • Someone who has been in a BPO
  • Fresh Graduate who wants to build a career in Sales
  • Experienced Lead Generation in IT Services / SaaS

It was recommended that if you are starting out get someone who is more experienced and can then train new members. Training was an important aspect of Inside Sales and once you have 2-3 members it’s best to invest into training.

One of the learning I have had is that the player coach model does not work. If you are getting someone to manage / coach a team do not have a individual quota for them.

Compensation Structure

  • At one point this became a discussion of Chennai vs RoW ☺
  • SDRs should be compensated and evaluated on meetings / opportunities passed and accepted.
  • AE should be compensated on MRR addition (and may be a bonus on long term contracts)
  • The starting costs of SDRs discussed varied from 4L – 8L [Inbound is far easier than outbound]

Metrics discussed

  • Inbound leads per Rep per month – 200 – 300 this is for ACV <10K kind of deals. Larger deals lesser leads
  • Outbound accounts per SDR per month – 200 – 300 and aim for 1-2 meetings per day
  • Email Open Rates for Cold Emails – 20% – 30%
  • Right party Conversations per Day – 8 – 12

Tools discussed

Resources/Books

Guest Post by Sachin Bhatia, Founder at InsideSalesBox

 

Becoming Cash Flow Positive In SaaS Business & Growing Revenue By 3 Times In 3 Months: The ShieldSquare Story

In Q1 2016, we saw our hard work payoff. We achieved some notable milestones. We became cash flow positive and our annual revenue rate (ARR) grew by 3 times in 3 months. We expanded our customer base to 68 countries (with over 90% of the revenues from outside our home base), and doubled our team to 50. Our Average Revenue per account (ARPA per year) has doubled to $10,000. Above all, we pushed ourselves to become one of the top 2 bot prevention vendors across the globe!

This is quite an achievement, and I’d want to share some of my learnings on what worked, and how we got there.

Who Are We?

We are ShieldSquare – a startup based out of Bangalore that has come up with a world-class solution to fight bad bots that scrape content, spam forms and engage in various forms of site abuse. We started off in late 2013 with a founding team of five incubated at Microsoft Ventures Accelerator, Bangalore. We worked hard on building the product and refining it by working with early customers till the first half of 2015. We launched ShieldSquare for the global market in mid 2015 and started getting good traction. We decided to shift gears and accelerate the business growth for the year 2016 and this is how we went about doing the same.

Expanding To Outbound Lead Generation Channels

We initially focused on a low-touch approach in getting leads via inbound channels. With the right keywords, and after a lot of optimisation, we became the No.1 in search ads. We started getting a good number of leads, and this also helped us secure a top global financial portal as our customer.

However, as the average deal sizes through the inbound approach were small, we kickstarted our outbound marketing campaigns with aggressive sales targets. We launched personalised email marketing across different verticals, analysed the technologies our prospective customers were using and focused on them. This helped us reach out to the Europe and US markets, and win marquee customers – still keeping it a low-touch approach.

Incentivising Customers To Opt For Longer Duration Plans

We wanted to have a win-win situation for our customers (lower total cost of ownership) and us (cash flow and predictable business growth). We removed monthly subscriptions, and started providing significant discounts to customers that opt for annual subscriptions. Why? Because we believe that the the cash paid today is many more times valuable than the same amount paid after a year. If the valuation of the company increases by 5 times over 12 months, the cash being realised now is 5 times more valuable than the same amount realised after 12 months. We now plan to expand this strategy to incentivise customers that go for 3-year subscriptions.

Then Came The Growth Hacks!

Our regular efforts resulted in regular leads, but we wanted higher conversions with minimal touch.  We  launched a few growth hacks that are first in this industry, to increase our conversions. Our free-forever diagnosis plan helped our prospects try, and experience our product with no upfront commitments. Our free tools  ScrapeScanner and BadBot Analyser  provided reports that enabled our prospective customers understand the need for ShieldSquare and prioritise it internally.

scrapescanner free tool

Wise Investments To Achieve Growth

One way for businesses to reach positive cash flow is to get the team to work 2 times harder, cut costs, and the like. But our team was already working 2 times harder and our costs were tightly managed.   Another way—the more sustainable way—to reach positive cash flow is to grow revenues! We chose this path for becoming cash-flow positive!

  • Growing revenues require building solid sales, marketing and product teams, and we invested on growing our teams across functions and bringing in passionate talents to drive these teams.
  • There are certain things that might seem unimportant, but rather carry great value. Our employees at Bangalore enjoy free breakfast, lunch and snacks, while the same will be implemented soon for our folks in the Chennai, who are already beating the heat with the free tender coconuts we offer twice a day.

It’s Ok To Say “NO”

In business, priority is everything. 20% of the activities we do contribute to 80% of the results. Here’s how we prioritised things to be more productive:

  • We steered our focus away from activities that are of less or no value to our business, like attending feel-good/networking events. Rather, we reached out to our advisors and mentors whenever we needed guidance and advice.
  • We have restricted ourselves from meeting prospects until we qualify them. But we keep engaging with various players to get better educated about the market, trends and customer requirements.
  • As we were focusing on building the business and not raising funds, we have politely refused the calls and meetings from VCs who wanted to know about the business. Yet, if any of them insist on learning more about the exciting things happening at ShieldSquare, we invite them to our office to meet the team. This really works as only those who are serious will come to our office to have a conversation, while the others drop out.

Strong Foundation

We have promised ourselves that we would never compromise on the core values that took ShieldSquare to the global audience. It would have been impossible for us to be in the global top 2 position in our space, if not for the following:

  • A world-class SaaS internet security product that caters to  the problems of customers
  • Self-serve platform that requires minimal effort to integrate
  • Strong 24×7 support processes to help our customers
  • A great onboarding experience for customers using diverse tools

The aforementioned are the key learnings from our own trial and error experiments as well as interactions with our awesome customers and advisors. The key takeaway from these learnings would be to believe in our own instincts instead of reinventing the wheel.

The overall experience of developing a stellar security SaaS product for the world was amazing! As it turns out, the feedback we get from our customers are equally overwhelming, and yet it reminds us of the fact that the journey has just begun, and we still have a long way to go.

Guest Post by Pavan Thatha, Co-Founder & CEO of ShieldSquare, one of the fastest growing Saas Security company globally.

 

Freshdesk at #SaaSx3

The story of how Freshdesk grew 500% in revenue in 12 months, and how Girish Mathrubootham and team went about telling us how they did it at SaaSx 2016.

“How many of you recognize this man on screen?” Girish Mathrubootham, CEO of Freshdesk, asked the room. He was gesturing to a picture of a man with thinning dark brown hair, a wide forehead, and a familiar crooked smile. A lot of hands went up even as people called the name out. Quentin Tarantino, people murmured, the eccentric filmmaker.

“Today’s presentation is going to be like a Tarantino movie.” he announced. “There will be different characters in it, narrating different stories that were happening at the same time. Hopefully, you’ll be able to put everything together in the end.”

There was a ripple of laughter as Girish turned to the four other people with him. They turned out to be co-panelists; early employees of Freshdesk who were going to join Girish in sharing inside stories from way back in 2013.

Panel-Freshdesk

The last presentation to round out SaaSx3, a full day event for founders of subscription-based startups, Girish’s session was literally what everyone was waiting for. The session was supposed to take the attendees through Freshdesk’s journey from a $1 million to $5 million in a year. For the people who’d attended SaaSx2, this talk was the sequel to Girish’s presentation the year before about going from $0 to $1 million.

But before Girish slipped into the nitty-gritty details, he began with a disclaimer. “I’m going to be sharing some real numbers,” he said. “Learn all you want. Just don’t take pictures. And please don’t put anything up on social media.”

If the Tarantino joke hadn’t gotten the attendees to sit up, this sure did.

Chapter 1 – The First Million

Girish was true to his word. In typical Tarantino style, the first slide read “Chapter 1 – The First Million”. The year was 2013, he told us. The month, January.

And then, he was off. The next few minutes were a blur of anecdotes and insights, numbers and theories.

One of the highlights of this section was his “n-1 theory of pricing”, where he explained the reason behind adding a fourth “Estate” plan, at $40, to Freshdesk. The Estate Plan, he told us, went live with just one additional feature a few months before. This was intentionally done to make the cheaper “Garden” plan, at $25, look more attractive to customers. This decision, according to Girish, played a significant role in accelerating Freshdesk’s revenue.

Then, just to prove that he wasn’t making it all up, he showed us an actual investor report from January 2013. The report read that Freshdesk had crossed 84400 in MRR, which meant they had over a million dollars in annual revenue at the beginning of 2013.

But where were they going to go from there?

Chapter 2 – Happily Clueless

At the beginning of the year, Girish admitted with brutal honesty, his team had no clue about their target for 2013. Everything was up in the air; they were flying by the seat of their pants. He had a number in his head, a number he’d had, ever since he’d learned about Twilio and Sendgrid’s growth at Bessemer’s Business of API hackathon. But it was in his head and no one else knew about it.

Until this point, Girish was the only one actively talking, explaining and expounding. This was when his team jumped in to elucidate just how clueless they’d been. There were some candid stories about targets being set on a whim and how people would bargain with “G”, as they fondly called him, for more realistic numbers. As they spoke, we began to realize just how normal and confused Freshdesk had been before they had decided to go after the five million target. I’m pretty sure more than half the people there could relate to this because most companies go through something similar when they’re small.

However, Freshdesk was on the right track during this turbulent period even as they wavered over their targets. They moved to a freemium pricing model, offering three seats on their lowest plan, “Sprout”. An attractive offer, it helped them double their customer count in a month.

By this time, it was already end of March, however, and the team closed the quarter at an ARR of 1.4M.

Chapter 3 – The Big Dream

By the time Girish finally seeded the 5M dream in his team, it was April. A quarter had galloped by and there were only 9 more months in the year. Nobody believed it could be done. But try, they did and quite a few changes were done to spur them on.

  1. Monthly targets were changed from “no of seats sold” to monthly recurring revenue to make sure that the sales team knew where they were with the annual target. The small team was split so that there was one sales rep per geographical region and given their respective goals.
  1. The digital marketing team worked backwards from the 5M goal to create projections for the number of leads they needed to generate every month. This was done using assumptions based on existing numbers for conversion rate, ARPU and seasonality.

The team admitted candidly that the 5M target was the first time the sales and marketing team’s goals were aligned at Freshdesk. A lot of experiments were run to make sure they were doing it the smart way and not the hard way. Every 15 days, they’d check their course to make sure they were doing everything they could to reach the target.

As they began ramping up operations and aligning goals, the Freshdesk team realized that they needed more people to take care of the increase in leads. And they needed them immediately. Girish jumped in at this point to explain how they’d solved this problem by hiring “freshers” right out of college and put them in customer facing roles.

“It’s important to match people with work they will enjoy doing. I believe that you can’t put in something that God intentionally left out of someone.” He explained, emphatically. “So, when we hire a candidate, we look for talent. We know that we can train them for skill later. That’s why we look for people with good communication skills, who can interact well with your customers. Everything else can be taught.”

This was also when the pre-sales team came into being. A team dedicated to helping customers with their evaluation, pre-sales reps spoke to customers, understood their requirements and helped them fit the product to their needs. A one-two combo, reps would prep leads before they passed them onto sales to increase chances of conversion.

By end of Q2, the team had achieved an ARR of 2.1M.

Chapter 4 – Escape Velocity

While the aligned goals of sales and marketing gave them quite a boost, the team still had to look at other ways to scale their growth in a sustainable manner. The right, and obvious, thing to do next was to align the product to the business goal.

This was done, Girish explained, by splitting engineering into core development and customer development. A decision taken in tandem with his co-founder, Shan, this would ensure that while the core developers focused on building important functionality, the customer developers could take care of bugs, feature requests and migrations.

When this was put in place, the core team started working towards making the product attractive for bigger deals. With input from sales, the product team started adding features to the $25 Garden and the $40 Estate plans to support the business. Meanwhile, the customer development team worked on making sure that existing customers were happy and their revenue was safe.

At the same time, they also realized the importance of upgrade revenue in SaaS. Girish showed us numbers detailing how their free or low-value customers were upgrading on their own by buying additional seats. Without any effort from Freshdesk, the accounts were growing. As businesses grew, they stuck with the solution that had helped them out when they were small. It had an even bigger effect on revenue, thanks to compounding.

Girish referred to it as “the advantage of SaaS” and stated that every founder at SaaSx has the opportunity to take advantage of it.

When Q3 rolled to an end, the team was at 3.1M ARR.

Chapter 5 – The Last Mile

By this time, Freshdesk was running like a well-oiled machine. A lot of new processes and ideas were in place and the team continued to see the benefits of the changes they’d made in the previous quarters.

But as Girish put it, “Life doesn’t stop at 5 million. You will have investors asking you what’s next and you have to look for things beyond your current target.”

So even as they were busy chasing their target, the team had begun working on some long-term projects for the next year. This included the beta launch of their second product – Freshservice, a channel sales program to find resellers in upcoming markets and raising more money from existing investors in an internal round.

He also had an important lesson to share about the effect of high targets on team morale.

“If we’d gone from $1 million to $4.5 million (instead of $5M),” he explained. “It’d still have been a great achievement. When you set targets, you have to make sure that salespeople don’t feel disappointed while the rest of the company celebrates. It’s important to manage their expectations and make sure their morale isn’t affected.”

Chapter 6 – The Fifth Million

And then, it was finally time for everything to come together.

For his final chapter, the end of the year, Girish simply pulled up an investor report from January 2014. At that point, Freshdesk had crossed 408,566 in MRR. This meant that that their ARR, multiplied by 12, was approximately $4.9 million.

Had the Freshdesk team really not met their target? Was this whole presentation an elaborate hoax?

The room was hushed and still as Girish, channeling Tarantino like never before, explained that, in their hustle for the target, they’d forgotten to include one of their revenue streams in their numbers – the humble day pass, which teams could buy to allow temporary agents to log into their account for a day. This worked out to about $8500 a month and helped their overall revenue cross the 5M mark.

There was silence and then, wild applause.

Girish and his team ended the presentation with a question that they asked themselves in the beginning of the year. It left us all in deep thought about how we should be running our startups.

“Are we aiming high enough? Do we want to be happy with 25% YoY growth or do we want to chase 5x in 12 months?”
By the time the team wound up their presentation, it had extended to a little over an hour and a half, twice as long as it was originally supposed to be. But no one had really noticed the time.

Any audience who’d sat through a full day of sessions would have been tired by 8 PM. An audience that had travelled from different cities to be there on a Saturday would have been exhausted.

Despite that, Girish and his team got a huge round of applause, a standing ovation and even a short Q&A session.

“What is your current payback period?” Someone asked when we opened up for questions. “Join us for SaaSx in 2019,” Girish remarked with his trademark wit, “-and I’ll tell you then.”

As I joined everyone to laugh and cheer for his reply once again, I realized the talk, like Girish had claimed earlier when he’d begun his presentation, had something for everyone – actual numbers, funny anecdotes, attention to detail and authentic storytelling.

All of it, combined with Girish’s genuine interest in sharing his experiences with the attendees, had made it special. I found this to be true of pretty much every session I’d attended at SaaSx, where the community was really helpful in sharing best practices and also on what to steer clear of.

Having said that, next year’s SaaSx has some pretty big shoes to fill. And going by the standards, the one after that, even bigger.