Category: iSPIRT

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Software Patents: Evil, Necessary or an Evil Necessity? iSPIRT OEQ Hangout

iSPIRT organized a OEQ(Open Ecosystem Hangout) on 20th April, 2015, to understand the role of software patents within the software ecosystem.Software patents are a much debated subject in the technology world today. In some jurisdictions like India, software is not part of patentable subject matter, while in other jurisdictions like the US, software patents are rampant. Do Indian startups need software patents? In a globalizing world, what strategies can they adapt to navigate through the software patents conundrum?

I moderated the session and asked the software entrepreneurs in the discussion to share their cost-benefit analysis of software patents.

Rushabh Mehta of ERPnext responded by saying that as a young startup, they find the cost of software patenting (estimated at around $ 15,000-$20,000 or between Rs 9.3 lakh to Rs 12.4 lakh) to be too high.

Srivibhavan Balaram of Vocera Communications, an entrepreneur, who has worked with open source and closed source software companies, said that patenting makes sense only if there is something unique that is worth patenting. However, he also added that the market for enterprise software was tilting more to open source now because companies were more inclined to go with time tested open source software, which find much faster acceptance. He added that companies are wary of proprietary software from startups.

Subramaniam Vutha, a veteran IP Lawyer and founder of the Technology Law Forum, said that India should actively encourage open source software, while accumulating as many patents as possible in jurisdictions that allowed it. He called this strategy, “Running with the hares and hunting with the hounds.”

Samuel Mani, Partner at Mani Chengappa & Mathur, said that defensibility is the only reason to file software patents. In a study that his organization did, he found that most areas that could be patented were already staked out. He pointed out that the cost of patenting is between $15,000-$20,000 which is the cost of hiring one employee for two years. He suggested that companies that aim to create a defense against software patents could join a defensive patent pool like the Open Invention Network (OIN).

Mishi Choudhary of the Software Freedom Law Center agreed with Mani on defensive patent pools like OIN. She added that most Free and Open Source Software are copyright licenses, but some also contain patent grants. She suggested that participants review the Debian Patent Policy.

This was the first such Hangout on software patents from iSPIRT, and there are plans to organize more such Hangouts to generate greater understanding of this topic.

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Founders should do Content – iSPIRT content marketing roundtable

It has been one of the wettest April for Delhi in years. 5th April 2015 was no different. An overnight downpour had created a surreal Saturday setting for “Content marketing your way to multi-million dollars in revenue” at the 46th iSPIRT Playbook Roundtable. It was the 7th Roundtable in Delhi. The venue – the playful Wingify office at Pitampura in New Delhi.

IMG_20150404_110222
View from the Wingify Office

Participants came from far and wide – Gurgaon, Delhi, Noida, Greater Noida, Mumbai, Bangalore – braving the rain, the puddle and the traffic.

The stage was set at the Wingify cafeteria. Interestingly, all the participating product companies were actually seated in a roundtable. A few table tennis bats uncharacteristically placed in the corner indicated that a TT table had made way for the roundtable.

Love all. Play !!!

Paras Chopra – CEO Wingify – opened the roundtable sharing that Wingify was now working with 4000 companies across the World helping marketing guys do technical experiments without writing code. He shared the iSPIRT vision of making India the place for software products.

After calling for a quick round of introductions, Paras initiated the roundtable sesion with the question, “What is content?”

Siddharth, Paras’ teammate and the marketer at Wingify also teamed in to lead the session.

What is content?

Even if you do not read the rest of the post, the following lines should be good enough.

Before inviting the forum to give their definition of “Content”, Paras set the tone for the roundtable.

He said, “Founders should do content”.

“I love writing. I have been writing since 14.”

“A founder is well placed to articulate insights. And it matters.”

Paras emphasised that content should not be one-off. Content – he says – should have rhythm. A collection of outdoor hoardings create better impact than just one isolated bilboard. He mentions the work of intercom.io to illustrate his example, before opening up the discussion to the forum.

The forum was quick to put out a list – emails, landing pages, shareable content (viral), blogs, smart forms, CTA’s, e-books (gated and non-gated) and videos – at which the discussion came to an interim halt, thanks to Vidooly.

Vidooly – part of the TLABS batch – helps YouTube channel owners grow their organic reach and traffic using analytics. Subrat (CEO – Vidooly) mentioned about an impending VC round, but denied YouTube wanted to acquire them. He was quick to point out that DailyMotion was around.

On using videos for content, Paras pointed out the trade-off between a high quality video and the effort. Sub-par videos could compromise the brand.

On the other hand, the forum communicated its excitement about videos rattling out names like goanimate and powtoon that allow for creating quality videos, quickly. Ankit (MyPoolin) shared that they have attracted quality audience with videos, especially in the B2C context. Vijay (ZapStitch) seemed to agree. Subrat was agile to point out corresponding vidooly features e.g. meta optimization features that will help grow organic audience.

Is your business using Videos for content marketing?

Content ROI

Siddharth led this leg of the roundtable on Content ROI.

As the key marketer at Wingify, ROI is his daily job and he did not lose time to mention mixpanel to measure metrics, simultaneously dishing out the following:

  • TOFU
  • MOFU
  • BOFU

Though lunch was an hour way, there was now some food for thought.

IMG_20150404_112059

Siddharth was describing the marketing funnel. Wingify was using marketing automation tools like Infer, HubSpot and Fliptop to measure how prospects move from TOFU ( top of funnel) to BOFU (bottom of funnel). It helps gauge how business is doing with respect to marketing and business goals. Siddharth built confidence by indicating that users appreciate the funnel and demonstrate desired behaviours.

Did you figure out MOFU?

Sudhakar (RippleHire), who was patiently listening to all this gyaan (knowledge) invoked his consultant avatar and pressed with a terse question, “What to post?”

The question resonated.

What to post? – A quick look at Buyer Personas

Paras and Siddharth teamed up to take this question.

Paras said, “The problem with us entrepreneurs is that we think that all are like us. When it comes to our audience, implicit segmentation is mostly not accurate. At Wingify, we have been scientifically studying our users and customers for the last six months – Who are they? What do they do daily? It all comes down to buyer personas. Your content has to resonate with them.”

“At Wingify, we have created posters (at times whimsical) to communicate to our team about Buyer Personas”.

Siddharth closed this question emphasizing how they did persona surveys, got on support calls, identified problems users were facing, studied linkedin profiles and established KPI’s to scientifically determine what content to post.

Outsource Vs Inhouse

Needless to mention, all were ears on this discussion point. Would this be black and white? Or would it be gray? Siddharth made it clear that each team member at Wingify had to write. Period. It was even integral to their recruitment process. (More on that later)

Ashish from Posist was very forthcoming about their outsourcing attempts. He even admitted that even though outsourced content was good, ironically it wasn’t exciting. It required Vaibhav’s (RankWatch) quote of “1$ per word” comment for a well-known content writer to bring back the fun in the discussion.

Have you experimented with outsourcing content?

Siddharth stressed on the importance of quality compared to quantity. He went on to share that at Wingify, they make a lot of effort to produce one quality post everyday. It is always quality that is priority.

Getting content noticed

If you thought doing content was hard, let us talk about distributing and promoting it. It is hard too.

Guest Posting

We began with guest posting and co-marketing. Siddharth began counting his fingers.

  1. Email influencers rather than commenting on their blog.
  2. Short and longer posts are both OK, but some publishers discourage longer posts.
  3. Important to communicate to publisher how your post is relevant to their audience.
  4. Always stick to guidelines for guest posts.
  5. It is effective to send a TOC first to publishers, instead of a final draft.
  6. Seek out high DA sites with relevant keywords.
  7. When sending in the final post to the publisher, always include 5 to 6 links within the post to increase odds of drawing traffic.

Being opinionated

Paras strongly recommended putting out opinionated pieces of content. Siddharth testified that for Wingify, opinionated blogs drew comments in numbers compared to simple blogs that would not get any. At this juncture, the forum could not help but discuss the Freshdesk Vs Zendesk episode.

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The discussion was quick to move to click baiting. Surprisingly, most of us present in the room, admitted falling for it.

Have you?

Siddharth added that Wingify has consciously played trends to attract traffic. It had also done fun stuff like the A/B testing for the Savita Bhabhi website. (please search for the link on your own)

Organization Structure

This track saw everyone pick up their writing pads. While Paras spoke, a few founders were looking only at Siddharth. It seemed they had found the persona for their new content team member – Mumbaikar Dilliwala who gestures to emphasize his point; slighly overbuilt with a Che Guevara moustache.

Paras began by sharing how in the early days of Wingify he used to look at each content piece with a hawk eye. Over a period of time, Wingify has divided its marketing team into two – product marketing and demand generation. And it is looking good. Wingify has also hired a business analyst for content strategy where they are doing really detailed analysis like “what is the worth of a tweet?”. Wingify also has a marketing engineer as part of the marketing team.

How does Wingify hire?

Siddharth sounded sanguine about journalists with 1 – 2 years of experience saying that by that time the editors have chiseled them to write well within constraints. Siddharth adds, “Communicating clearly is fundamental to our hiring process. As part of the recruitment process, candidates are asked to write on a real topic”. Most candidates disappear at this stage.

Growth Hacks

Time was up. It was already quarter past 4 PM. Everyone was given a minute each to share their growth hacks.

  • Vaibhav (Rankwatch) did facebooks ads comparing themselves to competition targeted only to the fans of the competition. They also sent tweets to conference speakers with some topic suggestions and inputs.
  • Ashish (Posist) shared how they gave the impression of a local company to Bangalore restaurant owners by using native language on the visiting cards of their sales team.
  • Shashwat (iflylabs) used the plugin directory list to gain traction.
  • Saurabh (Airwoot) tagged brands in its tweets telling them how poorly they were doing and with respect to competition.
  • Kanika (SquadRun) shared how text emails helped them hit inbox rather than the promotions tab.
  • Vijay (ZapStitch) made a list of top 100 saas companies on its website and promoted it.
  • Anand (Exclusife) ran a missed call for free recharges campaign.
  • Sudarsan (Ripplehire) sent cold emails to the intended contact’s colleague to get a response.
  • Vikram (RateGain) shared how they use ebooks around tent-pole travel events to generate interest.

With that it was a wrap.

The customary iSPIRT roundtable photo followed at the Wingify reception.

content marketing iSPIRT roundtable

Thank you Wingify for your initiative and enthusiasm.

I would also like to highlight the participation from Avinash Agrawal (Eko Financials), Mohit Bhakuni (Contify), Mrigank Tripathi (Qustn) and couple of more participants. I apologize I did not record your inputs in the proper context. Could I request you to add your comments to this post?

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Why are Indian startups so SaaSy? I took a bus ride with 40 entrepreneurs to find out

Reblogged from TechinAsia with the permission of the Author – Malavika Velayanikal

Saas-startups-on-a-bus

I stumbled at pricing initially. I sold my product at an 80 percent discount to a customer who kept pressing for more. After that the customer took me for granted, demanding more and more and more. Instead I should have tried to make him understand the value in the product. If he didn’t get it, I should have just moved on.”

“I learned from that mistake.”

“All of us entrepreneurs hero-worship ideas. An idea is like the superhero of a superhero movie. But what we don’t see clear enough is that for the movie to be a hit, you need a great villain first. If the villain is weak, your hero is also weak. So first thing to do is to figure out your villain. That huge problem which needs solving. I had to go through four iterations to figure out the right problem to solve with my product.”

“I hired an experienced vice president for sales very early on. That was a big mistake.”

“Why?”

“Because, until you figure out your sales learning curve, it is you the founder who should go and sell. Only you know the product enough, you know the architecture, so you can take the call easily. A sales head cannot make the commitments that you can, at that point. He should come in only when it is time to scale.

These were entrepreneurs talking. There were 40 of them, all running SaaS (software-as-a-service) startups in various stages of the evolutionary ladder. Some just out of college, some pushing the pedal at an accelerator, some experienced enough to invest in other startups themselves. They were all on a bus. From Bangalore to Chennai. To attend a first-of-its-kind meetup organized by a bunch of SaaS entrepreneurs for all SaaS entrepreneurs in India,SaaSx Chennai.

That I, a journalist, was embedded on the world’s “SaaSiest bus” – as they called it – didn’t stop any of them from talking about their biggest mistakes or what they learned the rough way.

And that was because SaaS was no longer an untamed, strange animal. Each of the entrepreneurs on the bus knew that they were sitting on a good steed. Everybody had a steady tick on revenue. “People call the SaaS business the flywheel business – it takes time for it to build momentum, but when it does, it is very difficult to stop it. This is what is happening now,” Sharad Sharma, co-founder of startup thinktank iSPIRT – the Indian Software Product Industry Roundtable, who is also on the bus, tells me.

Sharma is the co-founder and CEO of analytics startup BrandSigma. He is also a prolific angel investor with about two dozen investments. Former CEO of Yahoo India’s research and development wing, Sharma has been in the Indian tech industry since 1986, growing companies, building new ones, and now hand-holding young startups.

According to him, today, there are fundamental forces favoring SaaS startups in India.

The Uber for software

SaaS startups in India 1

SaaS is often called “on-demand software” because it refers to a subscription-based delivery model, where applications are accessed via the internet. The subscribers do not have the burden of installing, managing, and maintaining hardware or software; they just need a reliable internet connection. The company selling the software will host and maintain the servers, databases, and code that constitute an application. The buyers pay an annual or monthly subscription fee. That’s all.

It’s a clear win for companies do not want to invest in expensive hardware to host the software. They can spread out costs over time. And for the sellers, it means predictable recurring revenue, good margins, and inbound marketing.

The SaaS movement first picked up pace when Salesforce in San Francisco threw open customer relationship management software for small- and medium-sized companies on a subscription model. This was in 1999. It went public on the New York Stock Exchange in 2004, raising US$110 million, and acquired dozens of other startups later on.

Meanwhile, Indian startups too had caught on early. Chennai-based Zoho, founded in 1996, launched its first business app on the cloud – Zoho Writer – in 2005. Since then, the bootstrapped company has created a string of applications for businesses around the world, and grew to a subscribers’ base of over 13 million. Its success inspired many Indian startups to adopt the SaaS model.

A good example is customer-support software maker Freshdesk, now one of India’s hottest startups. Founder of Freshdesk Girish Mathrubootham was vice-president for product management at Zoho before he started Freshdesk in 2010. Today, it’s on par with global leaders like Zendesk. Leading software review platform G2 Crowd actually rated it a notch above its American counterpart.

Aces up the sleeve for Indian SaaS startups

Three key factors came together to give Indian startups an edge in SaaS, Sharma says.

First is the new pipe of buyers that everybody is selling to: the small and medium businesses of the West. The market is evolved there, and people don’t want to buy anything from a sales person. Why? “Because of the same reason they don’t want to buy cars from a car salesperson. Nobody buys a car from a car salesperson anymore because the next morning, they have buyer’s remorse. They feel they bought a car that they didn’t want, they bought features they didn’t want, and that they were oversold. And now, this is actually the problem in enterprise software. In every big enterprise, you will hear a term called enterprise shelfware – stocks of software, they are not using at all,” Sharma says.

So now, companies want to do their own homework to come up with software options and talk to sales folk on the phone, where they will be less likely to be cajoled into buying what they don’t want. And in that case, it doesn’t matter where the software-maker is based, in California or Coimbatore. The desk selling and marketing model of SaaS evened the playing field for everybody.

Second is the youth of the market. A few years back, selling on the cloud was just a mere concept. So everybody in this space now, big or small, are startups. There isn’t a Microsoft or an Oracle with a near monopoly in any of the SaaS verticals. For instance, Freshdesk is competing with Zendesk, but Zendesk too is still a startup.

“There is no incumbency – nobody has yet cracked the market fully. The market is still open for new players. That changes the odds completely. That is enormously enabling,” Sharma points out, adding that for the first time, Indian companies are not late to the global market.

The third star that aligned to make the magic work for Indian startups is the inbound marketing model for SaaS. Traditionally, a company needed a creative person, who will make an emotional ad that will resonate with everyone. But for SaaS startups, marketing is more about tweaking the product with numbers in mind – so it appeals to an engineer.

“Today, if you just talk to the people here in the bus, they will tell you that all marketers are also engineers now. They are the same type of people. The new wave of marketing is the scientific marketing; it is not the big idea, it is about making course corrections everyday. So it is very easy for Indian founders to adopt,” Sharma says.

Put these three together, and voila! There is an outpouring of SaaS activity in India, although it’s still an undercovered story in both global media and the local mainstream press.

Why the SaaSiest bus from Bangalore to Chennai?

Bangalore is always the first city to pop up in any conversation about startups in India. But when it comes to SaaS, Chennai has a star line-up – from Zoho to Freshdesk, Indix,ChargeBee, OrangeScape, Unmetric, and so on.

So Bangalore-based iSPIRT decided to hold SaaSx in Chennai and bus a few dozen SaaS founders there from Bangalore. Microsoft Ventures, also based in Bangalore, came in as a co-host.

About 120 SaaS entrepreneurs gathered in a conference hall at a swanky hotel in Chennai eager for some peer learning, expert guidance, and bonhomie. Serial entrepreneur Avlesh Singh, co-founder of customer engagement tool WebEngage was among those who shared his “SaaS story” of how he struck upon the core idea, found the product market fit, got the first 100 customers, and pushed the pedal from there to win almost every leading ecommerce company in the world as a client.

Freshdesk’s Girish Mathrubootham posed questions to the crowd, drew out tips to tackle common hurdles, and answered a few cheeky ones like how his company “poached” a client from its bete noire Zendesk.

The hosts launched a how-to-sell manual, “Jump Start Guide for Desk Marketing and Selling for SaaS,” based on the insights gleaned over the roundtable meetups iSPIRT had been organizing over the past year. The guide was co-written by Krish Subramaniam, founder of Chargebee, Niraj Ranjan Rout, founder of GrexIt, Sahil Parikh, founder of Brightpod, and Suresh Sambandam, founder of OrangeScape.

The inevitable future of enterprise software

SaaSx Chennai

According to Sequoia Capital, SaaS is the inevitable future of enterprise software. Microsoft agrees. The company’s new CEO Satya Nadella is embracing the concept, saying, “we are also in SaaS.”

In India, the SaaS trend has just picked up pace, but already some argue that it is as big as the IT services trend of the early 1990s. The outsourcing market was just opening then, and though there were biggies like Accenture, IBM, and HP in it already, Indian companies like Infosys disrupted their business model. Now, the SaaS startups in the country are taking to the desk selling and marketing model with great gusto, disrupting this space.

Currently, India’s main competitors are Australia and New Zealand among emerging SaaS hubs.

Sharma points out a way to evaluate this space, where companies have started to go public already. For example, customer support startup Zendesk went public last year. Out of the six competitors that Zendesk listed in their public IPO document, four are Indian companies: Kayako Helpdesk Pvt. Ltd., Freshdesk, Inc., SupportBee, Inc., and Tenmiles Technologies Pvt. Ltd (Happy Fox).

Now, there are about 34 SaaS startups in the US touted as IPO material in the coming four years. “Each one of them has Indian companies as their significant competitors, nibbling at their meals, trying to disrupt them. Now think of it. If that doesn’t tell you that India is arriving on the SaaS market, then nothing will,” Sharma says.

Looking around me at a busload of SaaSy entrepreneurs, I’m convinced.

Editing by Josh Horwitz and Terence Lee, second image by Stock Monkeys
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Understanding Software Sales from the Tally Experience

It is safe to say that Tally is the grand daddy of all Indian Software Products, the only company to have discovered the holy grail of selling software to Indian small businesses at scale. So when one of the key architects of the Tally sales network, Deepak Prakash (Tally employee #3) came down to Mumbai to do a iSPIRT Roundtable, there was little chance I would miss this. And Deepak Prakash did not disappoint. In typical Delhi banter, Deepak walked us inside the mind of a top performing sales executive and how the goals of an entrepreneur and sales person, while contradicting from the outside can be wonderfully complementary if managed right.

2015-03-14 14.29.14 HDRIn the era of online marketing and social media, old world sales seems like a relic of a bygone era. But not in India. In a country full of contradictions, traditional sales still has its charm and companies that want to sell in India, must understand the nuances.

Empathy

The most recurring theme Deepak’s talk was Empathy. The ability to listen and ask good questions. This applies to both, the relationship between the customer and the sales person and the sales person and the entrepreneur.

Deepak talked about the importance of knowing the sales person and making sure their aspirations are aligned with the company’s aspirations. If the aspiration of the sales person is to buy a car or buy a house, then the person must be able to see that this job will be able to fulfil these aspirations. Aspirations of changing the world have to be translated to the sales person.

Being in sales is a crushing job. Most of us a wary of sales people and feel they are intruders. Hence it is very important for someone who is managing a sales team to constantly boost the ego of the sales person, It helps to keep up the “shabash” and back slapping. If the sales have not been good, its not a good idea to bring it up the first thing in the morning. Mornings should be positive. Its best to have an evening call and close the day’s issues.

Productising Sales

Once the sales process is stable and repeatable, it is important to standardize it. Deepak calls it productising the sales. Getting the words right is very important. It is necessary to always talk in the language of the customer. While calling the customer to renew, saying that “their account is going to ‘expire’” can send wrong signals. Avoiding use of jargon, having a clear pitch and script was at the heart of the sales process. A good sales person is always well prepared should never be in doubt of what to say in any given situation.

Strategy

One of the key learnings for most of the fellow startups was market segmentation. Deepak shared to attack  a new market. For example if you  were targeting automobile dealers,you  would first have have your own sales people break into 10% of the market and once the network effects started, i.e., you will  have enough references and word of mouth going, then you  start handing it over to a reseller or partner network.

In Deepak’s words “you should  eat the elephant, but piece by piece”

Channel Building

A point will come when it will be  impossible to keep growing the sales network. Not only will it be  expensive, it will  also difficult to manage large sales teams. Hence it imperative for you  to start building a partner network. On being asked, when was the best time to start a partner network, Deepak answered, when there was a repeatable (productised) sales process.

International Expansion

There were many other topics Deepak touched upon like hiring (good sales people are great listeners), Tally’s approach to piracy (don’t inconvenience the customer), managing targets, bringing in influencers (charted accountants in case of Tally) and being clear of what you want (Tally was clear they did not want to go for enterprise customers).

Some of Deepak’s stories reminded me of the Jagdeep Sahni scripted “Rocket Singh, Salesman of the year”, which I think is a brilliant, highly underrated Indian movie for startups.

The Key to selling software to SMEs in India

One of the things Deepak wanted to share with the startups, something that Bharat Goenka, the founder of Tally has also spoken elsewhere, is that the buying patterns of small businesses in India are like enterprises in mature markets. They are used to being sold things rather than they pro actively going and buying stuff. Deepak wants to warn software companies (and their VCs) that they need to plan for scale (more than 10,000 customers). This is not a market for half measures.

My Take

While the session was delightful and insightful, I don’t think startups should try and emulate what worked for Tally. Tally was a product of an era where there was no internet and software adoption was in its infancy. They succeeded because they had the right strategy, risk apatite and execution for the market they wanted to succeed. Also once they hit critical mass, the role of the sales person was only to ensure availability, because the customer already knew they they wanted Tally.

11063806_10152785041892794_1847266351215314437_nThere is a reason the roles of travel agents or insurance agents is shrinking every day. The internet is a wonderful for discovery, learning and distribution of software and startups should go on this path. While sales may be necessary for enterprise, it is too expensive small businesses.

We understand that today, the Indian small business may not be ready to buy without being sold to, but this is changing fast. We are happy to wait and perfect the online game, so that when the markets open up, we have to most compelling offering ready.

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Launching iSPIRT pre-entrepreneur Program

The clichéd but very apt picture provides the context for this program.

Pre-Entre-programThe media shrill is at peak right now about entrepreneurship and many are jumping headlong into it armed with in depth technology, product management and sales skills. While there is considerable information available on the tangible skills, one of the key skills is self-management and ability to deal with incredible amount of uncertainty, indecisiveness, FOMO, self doubt and various other critical but often ignored aspects. Most are also not exposed to this intensity in their normal corporate existence.

Few folks in iSPIRT have been dwelling on this and with a happy coincidence of many events have come up with a program to address this need. We’re piloting an iSPIRT pre-entrepreneurial program to sketch a path for builders/makers who want to startup, including resources, exercises, and activities that strengthens them for their entrepreneurial marathon. Bringing in the principles of effectuation, developed through observing 45 expert entrepreneurs who have at least 15 years of entrepreneurship. Effectuation puts the entrepreneur as the agent of change, owner of their destiny, and helps them create the future rather than predict it.

The program itself will be a journey through market and personal challenges that a founder must go through when they do a startup. Those going through this program will get tips from experienced entrepreneurs in the Indian ecosystem, frameworks to develop their own products/startups, and a support system through the entrepreneurial journey.

The program will include effectual entrepreneurship and skill-building. This will be a 10 weekend workshop, with 90 minutes per week. The workshop is tentatively scheduled for mid April.

If you know someone who

  1. wants to startup soon
  2. wants to learn the challenges and difficulties of doing a startup
  3. wants a peer group that can help them through the journey
  4. is open to learning about and changing themselves
  5. And wants to co-create this program with iSPIRT,

Please nominate yourselves (or them) here

 

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InTech50 – helping software product companies connect with influential CIOs from across the world

In a recent article in ET, Mohandas Pai and I suggested that if India does not produce enough product companies, our economy will not be sustainable in the future. The data is compelling. To quote from that article, “Boeing and Airbus alone generate almost as much profit as all global airlines put together. Pfizer’s profits are more than those of the top 100 hospitals in the US. Cisco’s profits are more than those of all European mobile operators. Microsoft generates more profit than those of top 20 pureplay global IT services firms.While Indigo is a very well run airline, being a Boeing creates far larger value.”

Indian entrepreneurs and businesses can be world-scale and world-class. We have demonstrated that convincingly in services. Airtel, Jet, Indigo, Apollo Hospitals, Fortis Healthcare, TCS & Infosys, etc. are fine examples of companies that are respected across the globe. There is no reason why we cannot create world-scale and world-class product companies in India. The environment is conducive for entrepreneurs to now think ‘products.’

We created iSPIRT as a non-profit think tank with the aim of accelerating the software product eco-system in India. Since our inception in 2013, iSPIRT has focused on solving tough problems that will foster software product companies in India. Making M&A happen is one such problem. iSPIRT’s M&A Connect Program has made a big difference there. The last one-year has changed that perception of India as just a software services destination, and we have now generated early but enthusiastic interest in the international markets for our software products.

Some of that change in outlook started becoming apparent when, in January 2014, Facebook acquired Little Eye Labs, a Bangalore based startup that develops performance analysis and monitoring tools for mobile app. This was followed by Yahoo’s acquisition of Bookpad, whose document-viewing product is similar to Google Docs. The latest in the series of acquisitions is that of ZipDial (a mobile and analytics company) by Twitter. Some of these acquisitions, which got significant media attention in the startup eco-system, will hopefully encourage more entrepreneurs to think products.

Another hard problem

Another problem, which is equally hard, is to do with getting quality access to big-name CIOs in US. InTech50 address this issue. It is a one-of-a-kind forum where shortlisted software product companies get an opportunity to showcase and interact with some of the most influential CIOs from India and other parts of the world. This unique platform is a springboard that provides software product companies a connect with potential customers, investors, partners and influencers – that they would otherwise find it difficult to access, and certainly impossible to access over a 2-day period. InTech50 – a collaboration between iSPIRT and Terrene Global Leadership Network – serves as a platform for recognizing the most promising software products by entrepreneurs in India. After a thorough screening of applications, 50 innovative technology startups from the software product space are shortlisted to interact face-to-face with a panel of renowned CIOs and investors from across the globe. Through their close interaction with them, these startups gain valuable insights, which can facilitate them in scaling up globally.

The event, scheduled for April 15-16th 2015, is our 2nd edition. In our inaugural InTech50 event last year, we curated some high-potential companies. The audience of CIOs and other stakeholders took note. They now recognize that India is on the cusp of becoming a product nation.

InTech50 is the only forum of its kind where startups can get unparalled access to top global CIOs and investors, closely interact with them and showcase their products extensively with the end goal of closing deals. The best part is that CIOs from across the globe will assemble right here in India with the sole objective of finding interesting software product companies that they can engage with.

Though the applications for InTech50 are closed, if you are convinced about your product and feel that it deserves every chance to be showcased at the event, you have ONE LAST CHANCE TO APPLY by getting one of the Fellows, Founder or Product Circle Donor at iSPIRT to recommend you. (You can view the list of iSPIRT Fellows).

13897639212_c86c8c02ed_cIf you are shortlisted, do work with Mentor Panels and Business Catalysts, to prepare your pitch, and interact with our team and past participants to understand how to best leverage this unique opportunity. Take a look at our illustrious panel of Business Catalysts here.

NRK Raman, Co-Founder of iFlex (instrumental in its acquisition by Oracle for a whopping USD 909 million in 2005), is driving our effrots to help product companies sharpen their pitch and presentation.

With InTech50, you have everything you need to GO BIG, right here, on a platter – the right connections, the requisite support and everything else that you’ll need in the process.

Watch this space. India is on its way to becoming a Product Nation.

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RBI Governor Dr. Raghuram Rajan meets Product Startups.

He is a maverick, a reformer, a decision maker and above all the Governor of Reserve Bank of India. The country’s foremost authority in Economics met with Product startups in Bangalore to understand their challenges and also provide useful advise by participating in interactive sessions for close to 3 hours.

2015-02-27 10.23.43
Yesterday, at ITC Windsor Manor, Dr Raghuram Rajan, honorable governor of RBI, along with Industry stalwarts Mohan Das Pai, Sudhir Sethi, MD of IDG Ventures, Shekar Kirani, Accel Partners, Sharad Sharma (iSPIRT), Bharat Goenka (Tally) and many other industry leaders heard the stories of about 10 Indian startups. The idea was to understand the following challenges of the startup Ecosystem

  1. Startups from India Competing with Global Giants with Capital Markets Challenges (like raising capital from Domestic FIIs, listing for IPOs, and other book building challenges)
  2. Startups from India building Software and Technology Products and solving local and domestic problems with the new & developing landscape of Consumer Market Challenges (like changing landscape of payments, pre-payments, recurring payments, etc)
  3. Product Companies like Tally and others from India, empowering small and medium businesses in INDIA to become Digital SMEs for leap-frogging the Indian Economy.

Dr. Rajan, was very forthcoming with his following admissions and suggestions.

  • Some of some of the difficulties in moving money in and Out of the Country (FEMA regulations for example), requires a more coherent set of rules, regulations and systems.
  • He also suggested that all Institutions, need to keep pace with the technological advances, and the need was really to have an Inclusive approach to carry everyone forward.
  • He assured full commitment to the Payments Systems Revolution, highlighting that
    • Payment Banks and Small Banks will be in full steam in about 12-18 months
    • Innovative ideas of White-labeling of BCs (Business Correspondents) via Individuals, Corporations or Registered Companies was actively being discussed.
  • His willingness to open up a dialog with Innovative Companies, where Banks are a purchaser of Technology was also evident in his offer to have more follow-on meeting.

Close to 180 minutes of conversation and showcasing of New Product Startups and Business Houses like Tally from Bangalore. Around 8 companies got the opportunity to showcase and highlight their challenges and directly interface with the Dr Rajan himself. Not all elements of the session can be reproduced here, but below are some of the key highlights and learnings.

2015-02-27 10.24.32Home grown Startups share their Stories with RBI

About 10 Indian Startups which started in INDIA, and which have global operations today, presented their stories not just from a valuation and growth standpoint, but from an emotional and proud-to-be an Indian startup viewpoint. To sum it up, almost every story was about Entrepreneur’s who dared to dream something not only for them, but for INDIA, and today want the Indian Systems (Regulators, Government and Institutions) to reciprocate to their needs. They highlighted their list of issues, the below checklist includes, but is not limited, to the following.

  • InMobi’s Naveen Tiwari, believed that INDIA can be the HUB for solving Global problems and with 39 other startups which have spun-off from INMOBI, it was clear that there is a 10x growth that is possible in the Indian startup eco-system.
  • Uniken a Security startup company with solutions for the Hyper-connected world, spoke about how their solutions have been deployed by Global and Indian Banks, including Bynet Communications. They stressed the need for all Indian Banks to adopt the latest solutions from India Solution Providers themselves which are on par or better than many cutting-edge solutions from outside of INDIA.
  • Fintellix highlighted their Software for GRC Intelligence (Governance, Regulation and Compliance), which are today used by both Indian and Global Private Banks, but they cannot get through even the RFP process of many Public Sector Banks, due to archiac processes.
  • Freshdesk presented a crowd sourced Customer Support Platform for Businesses, Tally Spoke about large scale adoption of their Accounting Software by SMEs (in millions), FORUS presented their home-grown medical devices (3nethra) which could be adopted by Indian Hospitals for 1/3 the cost, and how 80% of issues leading to Blindness can be prevented, while SnapBizz showed how even Kirana Store business owners today could gain improved visibility using the SnapBizz cloud platform.
  • Team INDUS and Deck.in showed, how Indian startups are turning world-beaters with their big ambitions in Aerospace and Enterpsie Software solutions.
  • Bharat Goenka and Pramod highlighted the need for Separation of Concerns between Transaction Enablers (Banks) and Technology Providers. Goenka stressed that Velocity of Growth, is dependent directly on the velocity of transactions.

Insights and Learnings from RBI and Dr. Rajan.

There were many learnings for all participating Startup & Business Entrepreneurs. Some of the key ones are

  • Dr. Rajan believes that for Capital availability & Funding Process for Innovators there needs to be a different RISK Framework that needs to adopted. The existing RISK framework was meant to keep the bad-elements away from the System. The new RISK framework should look at being a support system for Good Innovators.
  • Dr. Rajan also was open to look at enabling PUT-OPTIONs which will provide down-side risk protection for atleast the Investment-value like in WESTERN Contracts.
  • Dr. Rajan however, said we must all be cautious of Back-door debt masquerading as Equity and causing Systemic Harm.
  • Dr Rajan, participated enthusiastically on the following topics
    • Payment Banks / Small Banks and their utility for the Indian Business growth
    • NPCI framework and Payment Systems Revolution
    • Working with FEMA (Mr. Padmanabhan) to resolve difficulties in Money Movements.
  • Other most important advise for Startups were also discussed. To note a few,
    • RBI Governor said India has a decent Capital Chest which provides some Immunity to the Global shocks, however we cannot act in Haste.
    • Today, the need for Inclusive growth were the Unsophisticated Audience can also be carried forward, should be an objective for all innovative solutions.
    • Indian Public Sector institutions should welcome tech-savvy and young entrepreneurs as part of some of their committees.
    • Most importantly RBI can play a convening role for adoption of Innovative Products by Indian Banks.

2015-02-27 10.24.03Conclusion

Overall it is apparent that the INDIAN technology/internet product markets, are in a Golden Moment where Aspirational issues are leading to better RISK appetite among INDIAN Entrepreneurs. It is a new Paradigm where not just startups, but all Institutionals bodies with-in INDIA, need to now collaborate and commit, for supporting each other’s RISKs and Needs. RBI on its part has definitely shown keen interest, and to quote from a fine statement made by Girish, Dr. Rajan, believes that RBI interventions may arrive late, but they will definitely be latest. The Entrepreneur hence must be patient and not act in HASTE.

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The best things are simple. Is your messaging there yet? : from #PlaybookRT

The most crucial lessons come from looking at the mistakes: those that we make and those that we spot others making. A thought might get triggered by listening to great dreamers like Steve Jobs. But the termination, in terms of realization, implementation and imbibing the essence comes only when you have walked through that journey and declared a new start.

Shankar, who imagined and steered the 43rd round table in Delhi, created amazing examples to drive across the points, we had often read heard and hoped to understand. I will try and share what were my takeaways.

This session, thanks to Rajat Harlalka and the amazing iSPIRT movement, started off with an unforgettable lesson, on what is the Curse of Knowledge.

You need to attend one round table to experience it. For now I can only re-iterate one of the ways it is often represented.

“The moment you know how to speak a language, you forget what it is like, to not know it.”

The same thing happens with you and your product. You know it too well to imagine what it looks like to those who don’t know it. What should the message be, so that the potential customers want to have it?

Who?

So if you are looking at spotting your messaging, spot the Who of your customer.

  1.       Who is your Bob (What Bob?)
  2.       What does he look like
  3.       Where does he go
  4.       What does he do

Why?

Once you have figured out the Who, move on to answer the Why

  1.       Why should Bob need your product
  2.       What’s in it for him
  3.       How does it make him better

Only after figuring these questions would it make sense to move on to ‘What’ your product does and ‘How’ does it do it.

I want you to read that again. Give it some time to sink it. Let it challenge what you think you know.

List of Videos by ShankarIt’s only after spotting “Who is your Bob” and “Why should he bother” that you product and it’s features and functionality come in.

First response of one of my fellow entrepreneur to this statement was: I know all that.

‘I am the best ecommerce setup for finding XYZ. That’s why he should care’, he went.  Really?

It’s like saying, “I am the best writer. You better read my books”. Does that work?

If you have both the answers, feel confident. You are amongst the top 5% companies who have their basics right.

Now what do you do with this knowledge?

Let your Bob know!

This was where I would say, the workshop’s original aim hovered.

If you have your answers, incorporate them in your messaging. Share a story that people can relate to. Share with your Bob that you are going to make him better. Let your messaging help Bob, feel this sentiment.

If you look at the steps we went through and reinforced during our Bob journey, there were just 2.  Make yourself :

  1.       Meaningful, and,
  2.       Differentiated, to your Bob.

One other takeaway that stuck with me was this: The best things are simple. Is your messaging there?

Guest Blog post by Kritika Prashant, VoiceTree Technologies

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Here’s how India’s “Product Nation” ambition be achieved and what the Budget can do for that ambition

The Next Google, Made in India

If you look at the Indian business landscape, you will see several successful services companies in fields like airlines (e.g. Jet, Indigo), health care (e.g. Apollo, Manipal), mobile phone services (e.g. Idea, Airtel) and IT Services (e.g. TCS, Infosys). Many of these companies are comparable to global peers, if not potential world beaters. What we don’t have are the corresponding product companies. We don’t have an aircraft maker like Boeing, a pharma company like Pfizer, a network equipment company like Cisco, or a software product company like Microsoft.

Is this is a problem? Yes. Because Boeing and Airbus alone generate almost as much profit as all global airlines put together. Pfizer’s profits are more than the profits of top 100 hospitals in US. Cisco’s profits are more than those of all European mobile operators. Microsoft generates more profit that the profits of top 20 pure-play global IT Services firms. Take a moment to digest that and it becomes clear that if India remains bereft of product companies, it won’t be a sustainable economy in the future.

Backdrop-10by11(all-english-style)-v2

Building product companies is hard, to be sure. Despite the fanfare, Tata Motors’ Nano has failed. And, sadly, Bajaj has been humbled by Honda in the last two years. In high-tech, Ittiam, despite its success in developing core intellectual property in online video, hasn’t broken into the main league. And, with our borders open to global competition, is it too far fetched to imagine that in a few years Amazon would have pipped Flipkart and Uber, not Ola, would rule our roads? We may have Indian players serving our digital consumers, but most categories might be dominated by foreign companies. Google already owns our search, Skype owns voice messaging, Facebook owns social media.

Is India destined to lose all these battles? Maybe not! But if we have to win, we have to embrace a new gameplan. Products, especially software products, are a winner-take-all business. Either you win or you are a nobody. Its not a place for the faint hearted.

In fact, tentativeness translates into a loss. It leads to sub-critical investments. We are staring at a costly example of this in the nuclear reactor industry right now. India can build 700 MW reactors. But economies of scale now kick-in at 1600 MW. Since we didn’t invest enough in the last 20 years (despite a wonderful start that Homi Bhabha gave us in 1950s), we are not a player in this large-reactor segment. So we will spend more on buying these bigger reactors from France, Russia and US in the next three years than what we have spent on our entire nuclear industry in the past 50 years! This is a really expensive failure.

If this was a one-off case it would still be okay. It is unfortunately not. In telecom, despite CDOT, CDAC and Sam Pitroda, we have only created one Tejas Networks, a nifty networking start-up from Bangalore. But, guess what? Tejas gets a pidly 1% of the annual telecom capex buys in the country. Rest is imported. We have a big rail network but no rail equipment companies. We are a generic drugs superpower but limp when it comes to new drug discoveries. These failures to create product winners don’t even faze us. We pretend it doesn’t matter.

We don’t even introspect why this is the case. When one sets out to create the world’s best hospital, airline or IT Services company, one builds in layers over years. But building a world class product company needs a different mindset. You have go all-in and bet-the-company on market or technology shift that is underway. This mindset is new to us in India. Our success in building services companies comes in the way. We have to accept this Provenance Effect; it is subtle yet significant.

To be sure, we are not the only victims of this effect. Taiwan is a victim of this too. It isn’t a player in mobile phones, ironically, because its design services legacy holds it back. Venezuela is not able to crack the chocolate market. El Ray owns the high end cocoa market, a key raw ingredient in chocolate, but comes up a cropper in high chocolates. If you ask the Belgians or Swiss, they tell you that they are a chocolate nation because they don’t have the cocoa mindset. Lack of a services industry legacy helps not just Korea but also Estonia (created Skype) and Finland (land of Nokia and Angry Bird games). It turns out that mindset matters — big time!

We have to jettison two ideas that hold us back from becoming a Product Nation! The first one is rather simple. We have to accept that no matter how well-run Indigo Airlines is it’ll not become a Embraer or Boeing. Similarly, a Narayana Hrudayalaya hospital will never bring a drug to market like a Pfizer does. Airtel or Verizon will never build a router like Cisco or Juniper do. And TCS will never be a Microsoft. Acknowledging this plain reality is the first step that we must take.

Then, we must discard our mentality of unbridled greed and reluctance to make bets — best showcased in our penchant for large Olympics contingents. Nobody cares about how many athletes you send to a sports competition, they only care about the number of medals you won. To improve odds of winning, small focussed efforts produce better results than grandiose schemes. Today, we have four times more new startups than Israel for one-sixth the outcomes. One reason is that the ecosystem enablers are narrowly sector focussed in Israel. The accelerators that help medical device companies don’t work with cyber-security start-ups there. Can’t we have a sector-focussed approach in India aiming at solar energy or medical devices, to name just two promising areas to bet on? If someone needs proof of concept: look at our performance in badminton and wrestling in India in recent years. The enablers in these sports are game-specific. Anything that smells like a generic “startup” program will have a low impact. It quite likely to be a scam!

Software product entrepreneurs when they are successful make a big economic impact in this winner-take-all world. So they are being courted worldwide. US is trying to get the Startup Visas in place for them. Canada already has a working program. Singapore has startup tax exemption. UK is in the game too. In our last budget there was a tantalizing line about “a special focus on software product startups”. Nine months have passed and nothing material has happened yet. Maybe this new budget will bring some well thought-out policies to light. This year 75% of newly funded software product startups will redomicile themselves in Singapore or US (up from 54% last year).

It is time for India to wake up to our Product Nation imperative. It is an opportunity for the NDA government to write history again. In 1998, they introduced a 108 point policy for IT services and we have the benefits around us to see. Now, they must do the same for software products. For the first time in modern India’s history, we have a chance to create world-winning products from India. The decisions we take today to support our flight to become a Product Nation will decide whether tomorrow’s Google, Viagra,Facebook, or Uber come from our nation. Act now.

Jointly written by Mohandas Pai & Sharad Sharma for Economic Times. 

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Roles and Responsibilities of Startup Founders.

Roles and Responsibilities of StartupThis is the 2nd in the 5 part series on ‘How to Sell in the US Market from India’. I had attended the Round Table organized by iSPIRT and here I attempt to capture the important points from the discussion. (You can read the first part here)

One of the topics of deep interest for the participant was on clearly understanding the role of the Startup Founders and where should their time and focus be optimally spent in order to achieve higher success.

As with the format of the Round Table, 15 startup founders shared their ideas which were wonderfully facilitated by Suresh Sambandam, CEO of OrangeScape. The founders spoke from their own experience as well as tapped into the practice of other successful founders. Here are the key learning from the discussion.

Be Prepared to Spend 16 Hour Workdays.

The Startup Founders are the ones who are the most passionate about their firm and they have everything riding on the success of the firm. It is they who believed in the fundamental business idea. One of the fundamental requirements is for the founders to set the right precedent by investing the bulk of their time on the business. This adds confidence and motivates the rest of the team members to work hard as well.

In the early days, it requires someone who knows the vision, the product as it stands today, the message that need to be communicated to the market, listen to customers to understand the buying process and also get the feedback from usage from existing customers via support. This means spending time with engineering/product, marketing, sales and support. This is where having more than one co-founders help a lot. But if you weren’t the blessed one then you have to pull it all yourself. Be prepared to spend 16 hour workdays across all these 4 functions.

Change your Work Timing

Remember that you are selling to the US Market and hence you need to adjust your working hours to match theirs. Your sales sales days typially starts like 6pm or 7pm India time and go on till 2am or 3am. This is a very crucial time that you need to spend. As a founder/co-founder you are essentially figuring out sales process. This is of paramount importance.

All Startup Founders Should be ‘Chief Sales Officers’

Sales is quite obvious. A business idea might be great but it amounts to nothing if the revenues don’t flow in. It’s very important for the founders to lead sales operations and spend a lot of time prospecting, pitching and listening to what customers are saying during the sales process. Having someone hired for this job during very early days doesn’t help at all, as it requires more connecting the dots w.r.t. to vision and product. Iteratively, the founders have to figure out the companies and the decision-makers profiles within the company. The more you are able to pin-point the decision-makers, the better are the chances of sales closures. This is called as ‘Ideal Customer Profile’.

Founders should do support a lot during early days!

While its a general trend for most startup founders to wear the Sales Head hat, most founders don’t pay enough importance to support. That’s usually relegated to a team member. Suresh Sambandam strongly reiterated that the founders do hands on support job just like a regular support person. This needs to be done with the attitude of NOT as a CEO, not as a founder, but just like a regular support person. This is important early on, to receive first hand feedback that is vital for the improvement of the product. Other startup founders who attended the session also felt that there is a strong correlation between support and sales. Better support results in happy customers which results in better up-sell and better reference leads. In fact, some of the founders felt that the support personnel must be paid on par with the sales staff in order to send a strong message that the company takes its support seriously. After the early days, while support team will grow on its own path, it is important for one of the co-founders to have direct ears to what is going on in support.

There is an excellent blogpost on Freshdesk that is worth reading.

Hire People Smarter than you

The first set of people can make a big difference to the success of a startup. The founder should directly be involved in identifying and interviewing the candidates. It’s critical for them not to let the ego get in the way. The best founders identify people who are way smarter than them. It’s also important for the founders to elucidate the vision of the company and narrate the company’s growth plans. By being highly involved in handpicking each and every employee, the founders can build a solid team with complementary skills needed for the success of the startup.

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Nuts and Bolts of Selling to the US from India for First Timers : Part 1

The 42nd iSPIRT RoundTable (RT) focused on an enormously interesting subject of ‘Nuts and Bolts of Selling to the US from India for First Timers‘.  The session was meant for startups focusing on SaaS products (mostly in the B2B space) but the learning can be applied to any startup targeting the US market. This is the first in a 5 part series that captures the important learning from this Round Table.

Unique Format for Collaborative Learning

For a guy who is a big believer in the power of collaborative learning and knowledge sharing, I fell in love with the format. The Round Table lent itself well for more Q&A style discussions and sharing of experiences. There were 15 startup founders and this limited number was helpful in catering to specific company related discussion. s the session went, each of them spoke from their experience and shared best practices that worked well for them.

I also loved the fact that this was a day long event starting from 11am till 4pm (the after event discussion went on for another hour). This was useful for deeper discussion on important points.

The format also steered away from the traditional lecture mode. There was no speaker but a discussion facilitator. Suresh Sambandam, CEO of OrangeScape and founding supporter of iSpirit, was the facilitator.  Suresh has successfully bootstrapped his start-up to a multi-million dollar entity and so he was the perfect person to lead the session.

This particular round table catered to startups that are approximately averaging US$5000 and intending to grow it 10x to US$50,000.  This RT is second of a three level RTs that cater to different sized startups.

560226_10153123542027845_4156238184454810538_nTypes of Round Tables

RountTable Level 1: Caters to startups in the formation stage which helps them to home in on their right target audience and business plan.

Round Table Level 2: Caters to startups that aim to increase their revenues 10X to US$50,000 per month.

Round Table Level 3: This is for well established startups who are billing a MRR (Monthly Recurring revenue) of US$50,000 and want to grow 10x to US$500,000 and more.

B2B Customers Categorization

Suresh explained that it is very useful to identify which type of clients that we are gunning after. Having this clear segmentation helps as each of these categories have different needs and pain-points.

SOHO (Small Office Home Office) : 1 to 0 employees.

VSB (Very Small Business) : 10 to 50 employees

SMB (Small and Medium Business) : 50 to 500 employees

Mid Market: 500 to 5000 employee

Enterprise: 5000+ employees.

In the second part of this series, we’ll capture the learnings on the key roles and tasks that founding team members should undertaken to better the success of the startup.

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iSPIRT: Big ideas on little napkins. #iSPIRTturnstwo

You’ve heard of famous napkin sketches such as the Southwest airlines route map or Robert Metcalfe’s Ethernet diagrams. But did you know that iSPIRT also started out as a series of such sketches?

It was a late wintersun afternoon in December 2012. I was sitting in Bangalore’s Karnataka Golf Association across Sharad Sharma and Avinash Raghava. It was the day after a marathon few weeks of us “volunteers” putting together India’s largest startup event that year. I’d done my small bit building out the Program Guide, helping with the scheduling tetris and hosting a UX workshop for startups.

Now when Sharad or Avinash call, you can be sure of one thing: you’ll walk out of that conversation buzzing. The KGA meeting was one such chat. It was when I first heard about the “sketches” behind iSPIRT – an acronym for the Indian Software Product Industry Round Table. One of their big ideas was founding the entire iSPIRT as a platform anchored on volunteers’ energies and selfless service, as a platform that represented Indian startups. There in the middle of beer and coffee mugs I remember reams of paper on our table. These papers had ideas and boxes and arrows and circles. There was Industry. And government, and academia. We discussed a million questions:

is this a Think Tank? A Content Platform? An Enabler? Logistically, a Round Table? How do these pieces connect?

I offered to build on some ideas in early 2013. We made concepts and threw most of them away, in the true spirit of prototyping. After all iSPIRT was a startup too! It needed multiple experiments running!

iSPIRT_amit_pande

2013 started with much momentum for iSPIRT and Product Nation. The identities seamlessly blended into one visual identity and website. The product round tables continued to be a huge success. As iSPIRT picked up momentum, my own life took a few different turns. I left for Stanford Business School for the Sloan Fellows program and traded a corporate job and Bangalore life for a dorm room and back-to-school lifestyle in Palo Alto. I was with iSPIRT in spirit, and I saw it from 14000 KM away, taking shape as early stage startups do. The Product Roundtables. The Product Technology Ratings. InTech50. #PNCamp.

2014 of course was an even bigger year for iSPIRT. The engagement with the new government, the policy papers, and the acceleration of startup investment activity were palpable. Midway during my Stanford year, I had the opportunity to introduce iSPIRT to my GSB Professor and now friend Sharique Hasan, one of the best researchers out there in Organizational Analysis. Sharique like many others in the Valley had heard rumblings around Indian startups. When he finally met the iSPIRT team, it kick-started new initiatives within the M&A Connect program.

2015 promises to be even bigger. I hope to contribute more, volunteer more. But even as I imagine the largeness of things to come, I will never forget those sketches at KGA, that bright winter afternoon, and those ideas that seemed distant, like a dream you can almost touch.

Today when iSPIRT turns 2, I am reminded of the power of big ideas sketched on little napkins. I am reminded of that famous line:

you cannot stop an idea whose time has come.

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40th #PlayBookRT in NCR on “Break the Barriers of Selling” by Deepak Prakash

iSPIRT kicked off its first roundtable for 2015 on 17th January at the office of Eko India, Gurgaon. The PlaybookRT was led by Deepak Prakash, Former VP of Sales at Tally Solutions. He has led building the entire sales network bottoms up and was the #1 sales person at Tally. Under him, Tally evolved from direct selling to single-tier home grown network for dominance and further evolved into a two tier network to create availability supplementing with all possible marketing activities with money/without money to reach-out to every potential buyer of our product(s).

The theme of the PlayBook Roundtable was something that poses a challenge for all tech entrepreneurs – Sales. Sales is what riddles most of the IT Product company start-ups – each one to his riddle. The intriguing problem of sales combined with Deepak’s experience and expertise in this subject ensured we had a full house on cold Saturday morning.

2015-01-17 18.30.11Overview

There are roughly about 1.25 crore SMEs in India, and about 40 Lakh of them have computers and are ready for automation. This provides a huge opportunity for enterprise software providers. Most of tech entrepreneurs have built interesting products to address this large market, however sales has always been the Achilles’ heels. Deepak broadly outlined the following sales strategies to tackle this market.

Building an effective sales team

Understand the sales psyche

In order to build a successful sales team, it is imperative to understand the psyche of sales people. As tech entrepreneurs, we usually tend to apply the same yardstick for both technology folks and sales team. This approach is incorrect.

  • Engineers and techies can accept failures easily, take it up as a challenge and build upon it. If there is a defect or something is not working, they will try new approaches to solve it. But for a sales guy, who is in front of a customer alone, failure can more often than not challenge his pride and ego. It needs a lot of effort for a sales person to swallow this failure and start afresh next morning. Inorder to keep his motivation high, it is necessary that we celebrate small sales victories and communicate the role he is playing in the organization.
  • Developers and tech teams go by logic and enjoy data, analytics and whatsapp/SMS. While sales teams enjoy phone call over IM and there is more emotion in place. It is very easy for a sales person to become lost or feel small in a tech setup. Entrepreneurs need to work and ensure that both teams understand each other’s importance.

Hiring A Sales Team

In response to a question on what traits we should look for while hiring for a sales position, Deepak mentioned:

  • The person should be able to make the customer comfortable and make him speak about his problems and needs. Only if a sales person can understand the pain point of customer, can he suggest the right value proposition. Someone who talks a lot and does not let others talk is not necessarily a good sales person.
  • A good sales person will typically have his pipeline on tips of his fingertips. He should be able to spell this out at any time.
  • Someone who says I can sell anything and I don’t need to know the product is a person you want to avoid. Because as an entrepreneur you want him to focus on product demo, and confide in the fact that your product is good enough that sale will happen if the right message goes to the customer.

In response to comments that it is difficult to find sales people who are ambitious or motivated, Sumit Kapoor from Employwise mentioned that it is not entirely correct. It is for the leader to inspire their people. We are able to inspire and motivate tech people easily but not sales people.

However, before hiring a sales team, founders need to ensure that the product or startup is at a stage where someone else can do the sales for them. E.g. if the sales calls become repetitive, you know that our sales process and collateral are ready for delegation.

Sales Team Training and Measuring Success

Deepak also shared his approach of measuring the success of sales teams:

  • Do not measure the success of a sales person by the number of cheques he gets but by the number of demos he makes. As an entrepreneur, we need to believe that our product is good and so if the sales person focuses on a good demonstration, cheques will come and business will happen.
  • The target or objective for sales team should be to talk about your passion, your innovation and your pride.
  • We need to understand the dream of sales people. Rather than imposing our dream on them, if we start worrying about their dream, they will start worrying about yours.

The discussion then meandered into how to train and motivate your sales team. Everyone one chimed in with interesting thoughts and here are some of them:

  • The first sales call for a new joinee is like sending a child to school. As parents we have to hold their hands and be there at the background. In case we close sale, do not ever say that sales happened because of me. Motive the new member and make him feel that he was the one who closed the deal.
  • In technology, we attempt to solve problems that are under your control, while sales depend on other people (end user, decision maker and several stakeholders) and so we have to be patience and cut the sales team some slack.
  • The only fear that sales folks have on the road is that sale will not happen. With every rejection, they lose a bit of self esteem. They have to recover from this loss over the night and get ready for a new day and a new fight. And on top of it, we as organizations impose tools such as CRM they have to fill in. These CRMs do not talk back and understand their feeling. At Tally Deepak used to call his boys everyday at 7 pm and hear them out, giving them a chance to vent out their feelings.
  • In a tech company, usually a sales person is considered an outsider. But if the rest of the team starts seeing as a bread winner and if the sales person gets a feeling that the team depends on him, this will give him a high.
  • As entrepreneurs, we also need to understand the difference between entrepreneurs and employees. Employees live for a lifestyle while entrepreneurs live for building an organization. Employees will plan for vacation, holidays etc. and we need to appreciate this.
  • Normally we give just product training to sales teams but customers usually want to talk to someone who understands them. So domain knowledge becomes important.
  • We try to surround sales people with tools such as CRM citing terms such as productivity, efficiency etc. These terms more often than not are Greek to them and they feel you are trying to control them, while the feeling inside them is freedom. We have to explain them to them that the tool is for liberation so that they start enjoying it.

2015-01-17 15.29.56Digital vs. Feet on Street

The discussion also got into choosing between Digital and Foot on Street and whether startups should try both. Sumeet opined that it is best not to get into a situation where we do both.

  • A digital strategy takes time to build as you have to create content, online brand etc. that does not happen overnight.
  • You also need to ensure that your customers are comfortable going through the entire sales cycle digitally including making payments. If there is any trade deficit, digital may not work.
  • While building your digital content strategy, you also need to ensure whether your target SMEs are coming online to search for data. Do they have enough time or knowledge on how some of their problems will be solved.

While if you are going for feet on street, you need to remember to bring in processes that will help you scale. E.g. you have to build a sales engine through which if you run a new hire, he can go and sell your product.

Sometimes combining both digital and feet on street can mask problems in either of the approaches. E.g. if customers are not comfortable making payments online, we get our sales team to talk to them and make payments offline. This prevents us from addressing the real problem, which perhaps could be a trade deficit.

Building a Channels Strategy

The mantra of success was that they created their own channel network, this lead to a dedicated network which will take all the products Tally would have created or will create. They ensured that their channel has enough activity to do, opportunity to encash and inclusive work for their growth was charted.

Channel works well when people already know your brand. There are three major things that channels can help you with:

  • Sell your product
  • Act as fulfilment centres for your product
  • Extension of network for messaging

Your channel strategy also has to evolve in-time. When you want to create deeper reach and availability you need to recruit another set of partners, and in parallel ensure that the already present channel also gains from your expansion.

Channel strategy has changes considerably between pre MNC and post MNC. Earlier there was a lot of relationship building, but now most of the channel partners play around very low margins. Entrepreneurs need to be wary of which strategy they want to adopt here.

Bundling Your Products

Another strategy tried by several companies is to bundle the product with another product that sells more. FMCG industry has done it very successfully. A couple of things that need to be taken care when pursuing this path are:

  • The product you are bundling with should resonate with your own product. E.g. both products can complete each other
  • Are the sales people selling the original product understand your product or are able to explain to customers about your products.

Referrals

Referrals are another avenue that startups can explore, however before doing so you need to ensure that you are capable to handle all the leads that come in. Throwing a bigger net that you can manage can actually backfire for you.

Right Business Model

Several SaaS based business have a monthly model where they would call businessmen every month to pay. This may not work well with SMEs. Your customer’s business is not to buy software with you. He would rather want to concentrate on his business. Hence it may make more sense to opt for an annual model. The serious customers will anyways buy this. Exotel had a similar experience.

Reaching out to different stakeholders

Often in an B2B setup, the user, decision maker and paying authority are different. The discussion moved to what should be the order in which different stakeholders are reached out. Usually sales team members are hesitant to meet the owner as they face the possibility of heavy rejection. Also owners are not interested in features but in how the tool can either help them save money or make more. However, they do depend on feedback from the user or beneficiary. Hence the sales team should first reach out to the user or beneficiary and then the owner. Sometimes the owner also depends on inputs from a Subject Matter Expert, who could be an IT guy or engineer in his friend/family and sometimes others (e.g. CAs in case of Tally)

However, in case of channels the approach is opposite. You first reach out to the owner to get them buy your proposition. Following this you want to reach out to the sales team of the partner so that they are well educated and trained to sell or demo your product.

2015-01-17 15.30.21Monopolistic Market

Dinesh Agarwal from Busy Software shared insights on how they penetrated a market which was dominated by one large player – Tally. He banked on users and stakeholders in accounting software to identify niche features that were required by a segment but not offered by Tally. One of such feature was statuary compliance. They launched this feature at half the price and this helped them penetrate. They also carved out their channel strategy and ecosystem that helped to build a strong market base.

Going International

Deepak also touched upon some key considerations while eyeing international sales:

  • Your product will need to be adapted to the particular market you intend to tap into. It could be for example statuary compliance or local language support.
  • International markets can be expensive and hence you need to plan well
  • From a sales strategy, there will be broad similarities. E.g. international markets also have channels that work on the same motivations and contours.
  • You need to accept the fact that no one in a new market knows you or your product. So if you start from scratch.
  • The business problems and challenges are similar in different markets. They too have similar HR problems or business problems.
  • There also needs to be a culture adoption, especially the way you communicate or conduct your sales effort.
  • Before starting to build a channel in an international market, it usually makes sense that you acquire the first 10-20 customers yourself. This will help you understand the market better, ensure your product is ready and help you exploit the channel strategy much better.
  • Set clear expectations and objectives so that you know when to get out if things are not working.

Conclusion

One thing that stood clear from inputs of all participants was that there is no size that fits all. Different solutions and strategies yielded results for different teams and entrepreneurs. It is imperative not to wear someone else’s stripes. Pick up a strategy that is doable for you based on the types of person you are and situation you are in.

2015-01-17 13.36.59The high level of interest and engagement from all participants was evident as the session that planned for 3-4 hours got extended to beyond 7 hours. We finally concluded our first Roundtable for 2015 with a promise from Deepak that he will back with us in a couple of months.

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M&A Roundtable: Indian startups are breaking through

M&A activity in the Indian startup ecosystem has, for a long time, remained fairly nascent. Relatively small exits, averaging $10-15M, are commonplace in India. But things are changing, and with India being the third largest startup ecosystem in the world, Silicon Valley giants are beginning to pay more heed to the entrepreneurs and IP emerging from India.

On January 23, 2015, the iSPIRT M&A Connect Program hosted a Corp. Dev. and M&A Roundtable in Palo Alto. Attendees included corporate development, M&A and senior business unit folks from several key companies including Google, Yahoo, Twitter, Cisco, Intel, Box, LinkedIn, Intuit, etc. the event was coordinated by Sanat Rao (Partner, iSPIRT) and Roxna Irani (Associate, iSPIRT).

Neeraj Arora (VP, Corporate Development – Whatsapp) was the keynote speaker, talking about his experience with the Facebook acquisition, key learnings and challenges he faced while closing the $22B deal with the tech giant. He repeatedly highlighted the importance of trust that the Facebook team built out with the Whatsapp team over the course of multiple years before the acquisition that eventually led to an extremely seamless process. He also emphasized the element of trust that a startup must establish with a potential acquirer, because nothing is more appealing to an acquirer than a startup’s commitment to their specific relationship. (So there’s monogamy in M&A too!)

M&AConnectAfter an interactive session with Neeraj, we had a candid discussion with the Corporate Development attendees about their experiences acquiring Indian startups. The Yahoo and Twitter corp dev folks shared the key learnings from their recent M&As in India. Here are some takeaways for us in the Indian software product industry and for the next acquirers of Indian startups:

  • Visible benefits when the target is a US entity. Given legal complexities, the difference in time and effort to close a deal with a US acquirer can vary substantially based on the legal domicile of the company. Recurring piece of advice of new startups is to register as a Delaware C-Corp.
  • Acquisitions in India take time. Beyond geographic complexities, there are a couple of other reasons responsible. For one, communication can sometimes be ‘lost-in-translation’, so legal agreements with an Indian and a US counsel, with different laws and legal terminology, can often demand more fine-tuning than normal. Other times, key stakeholders may require more engagement and disclosure that demands resources. Whatever the reason, the general idea is to expect, and actively manage, longer cycles.
  • Acquirer confidence in the core leadership of a startup is crucial. Acquirers often expect a strong management team to hire equally strong employees, so they see high quality leadership as a validation of high quality team and product. This is especially true in the case of Indian startups.
  • Acquirers are looking for guidance on how to traverse the Indian ecosystem. India is a new market for a lot of overseas acquirers. A recurring request was for a “playbook” that would highlight the process and differences of doing an acquisition in India. This would include items as simple as list of top colleges in India to give acquirers context of pedigree, to employee attitude towards compensation (cash vs. equity breakdown), to examples of standardized termsheet terms and details.

M&A onnect - Roxna Irani
The iSPIRT M&A RoundTable started 2015 with a bang. The year will be a pivotal one for tech startups in India and the iSPIRT M&A Connect Program is excited to accelerate the pace of change. With all the “Virtual Mandates” received from the Silicon Valley companies, we will make carefully targeted introductions to the Business Exchange Associates. And with a higher quality of interactions, we hope to make much a larger impact to corporates and startups alike..

Exciting times ahead… stay tuned!

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Indian Regulator SEBI meets Software Product Startups.

How often has this happened? An entire team from Securities and Exchange Board of India (SEBI) with its Chairman Mr. U.K. Sinha meeting with Software Product startups in Bangalore to understand their challenges and also provide useful advice by participating in interactive sessions for more than 5 hours.

On 19th December, Mr. U.K. Sinha, Chairman of SEBI and his management team, heard the stories of 8 Indian software product startups. The idea was to understand both the Capital Markets Challenges (like raising capital from FIIs, listing for IPOs, and other book building challenges) as well new developing landscape of Consumer Market Challenges (like changing landscape of payments, pre-payments, recurring payments, etc.)

Mr. U.K. Sinha, was very forthcoming with his admission that new age companies require a completely new paradigm of evaluation and approvals. The new paradigm is needed not just for listing purposes, but also for market regulation and growth purposes. He assured full commitment from SEBI’s end to the budding entrepreneurs that SEBI is very keen, and will do everything within its capacity to help develop the markets keeping in mind INDIA’s growth needs.

More than 90 minutes of conversation and showcasing of New Software Product Startups from Bangalore took place. Mohandas Pai chaired the sessions on iSPIRT’s side. Not all elements of the sessions can be reproduced here; below are some of the key highlights.

2014-12-19 17.20.42

Home grown Startups share their Stories with SEBI

About 8 Indian Startups which started in INDIA, and which have global operations today, presented their stories not just from a valuation and growth standpoint, but from an emotional and proud-to-be an Indian startup viewpoint. To sum it up, almost every story was about Entrepreneurs who dared to dream something not only for them, but for INDIA, and today want the Indian System (Regulators, Government and Institutions) to reciprocate to their needs. They highlighted their list of issues which include the following:

  • 8 companies from various sectors (InMobi’s Manish Dugar, Ezetap’s Byas, Exotel’s Shiv Ku, HotelLogix’s Aditya, iViz’s Bikash, Paytm’s Pratyush, QuickHeal’s Rajesh and Deck.in‘s Sumanth) all presenting the journey of their startups.
  • A common hardship that resonated from most of them, was the unwarranted need of setting up subsidiaries or parent companies abroad, just to attract the right Investors and raise capital for growth.
  • Exemplary companies like InMobi, which raised initial money from Angel Investors today has a reach of about 1 billion people. Ezetap which raised initial money from AngelPrime, today has global operations, however it has its manufacturing, done entirely from Electronic city in Bangalore. Both urged that it should be made easy for Indian companies to raise money from Global Investors.
  • The existing regulations and guidelines make it very difficult for companies to get the right people (investors and advisors) on their Board.
  • Exotel, Hotelogix, Paytm and iViz, all stressed the need for modifying the SEBI/RBI guidelines on ESCROW, where Indian shareholders should have similar opportunities like Global Investors.
  • QuickHeal’s Rajesh highlighted how Kailash Katkar, a college drop-out had built one the most successful product companies out of INDIA over the past 25 years. Today QuickHeal is thinking of its IPO and needs to decide where to list.
  • Requirement for the Regulator to understand all stake-holders and their motivations, and provide for fast and timely intervention for Exits (IPO listings, etc.).
  • Need for new models to evaluate the new paradigm of Tech/Internet Product startups in INDIA.

At the end of this open session, Shekhar Kirani (iSPIRT Fellow; Accel) highlighted the fact that the Indian software product markets were entering an era of hyper growth. It is a new paradigm where not just startups, but all Institutional bodies within India, need to now collaborate and commit, for supporting each other’s need. In this context, he appreciated the interest shown by SEBI.

Policy Expert Team Interacts with SEBI

Following this open session, the visiting SEBI team met with iSPIRT’s “List in India” Policy Expert Team for an intense three hour closed door conversation about specific issues and their resolution. This iSPIRT Policy Expert Team is led by Sudhir Sethi of IDG and has Rajiv Khaitan (Khaitan & Co.), Sanjay Khan (Khaitan & Co.), R Natarajan (Helion), Rajesh Ghonasgi (Quick Heal CFO), Manish Dugar (InMobi CFO) and Harish HV (Grant Thornton) as its members. While specific details of this meeting are not available, Mohandas Pai told me that the session had been very productive.

Insights from SEBI

Mr. U.K Sinha, Chairman of SEBI, has an unbeatable track-record. In his past life, he was the chairman of UTI, and was instrumental in transforming UTI from a 1.2k crore institution to 12k crore institution. Many insights were shared by Mr. Sinha with all the participating Startup Entrepreneurs. Some of the key ones are:

  • Mr. Sinha and his team gracefully acknowledged that they were not just a Controller or Monitor of Capital issues, but they were equally keen to Develop Markets for businesses to thrive.
  • Further, Mr. Sinha highlighted the introduction of SME-ITP platform to facilitate capital raising by SMEs including start-ups which are in their early stages of growth and to provide for easier exit options for informed investors like angel investors, VCFs and PEs etc.
  • He also indicated that SEBI is exploring putting in place a framework for crowd-funding which will provide a much needed new mode of financing for start-ups and SME sector and increase flow of credit to SMEs and other users in the real economy. In this mode, SMEs and start-ups will be able to raise funds at a lower cost of capital without going through rigorous procedures.
  • It was indicated that SEBI is keen to facilitate capital raising by such companies to help them achieve their full potential.

2014-12-19 16.56.19
New Wind is Blowing

I saw a collaborative approach to problem solving that I haven’t seen before. iSPIRT’s policy approach is refreshing different from the traditional lobbying mindset that one sees in trade bodies. And SEBI is clearly open to listening and learning. It was amazing to see how SEBI as a regulator and iSPIRT as a think tank were both focused on the same national goal. I came away from the meeting with optimism and a spring in my step.