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.

Kamal Rajini Analogy : Entrepreneur vs Intrapreneurs

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There is heavy pressure in our industry for everyone to get on the train of entrepreneurship or startup, startup mode is on, Govt is supporting this, communities are on it, and now even banks are starting fund startup. This is all great news.

But should everyone having a entrepreneurial spirit, become an Entrepreneur?

Not necessarily. Many prefer to be, but different circumstances in career, money , family and culture make them not venture into that. So whats the option for them.

Here is where I would like to introduce my Kamal and Rajini analogy. I am sure most of you know about these cinema stalwarts from south india. They both had a completely different style and both were successful in their own way

Kamal , the startup guy – Entrepreneur :  Kamal Hassan always tried like a startup guy, tried new things, ventured into unexplored territories, ahead of times, reinvested most of earnings in his movies, and his movies (product) appealed to a certain set of audience (market). Lot of his movies were commercial failures when they were made , but when you go back and watch them after several years, they are gems. He is like Jeff Bezos, not caring about short term, about profits, but only the long term impact his movies creates.

Rajini, the commercial superstar – Intrepreneur : Rajinikanth on the other hand mostly went for the trusted entertainers, big banner , big investment movies, he built his unique differentiation with punch dialogues, style and tricks, and many movie themes were already successful themes elsewhere. He partnered with big cinema houses who would bank on him for delivering what the audience wants, a mass market. Most of his movies were commercial hits.

Having provided this analogy, I often can relate to each of us, with an entrepreneurial spirit, mostly falling into a bucket of Kamal Hassan or Rajinikanth – and we can learn from how these personalities carved their path to success for so many decades.

While most of us have lot of understanding on the Entrepreneur part, I thought of spending more time in Intreprenuer journey. How do you identify them.

In a Forbes article, its nicely highlighted as “those highly valuable executives and team members who will perhaps never become a company founder, but who have learned to apply the essential principles of entrepreneurship to the roles they fill within a company.”

 

Understand Money : Intrapreneurs -while do not put in their money into the business, they think like its their own business, and strive to make every rupee or dollar count. Often they are the pillars for success of the company. Also they expect to be rewarded well for this

Idea mongers – Greeehousing : Intraprenuers are often thinking like owners when trying to carry the ideas forward, the ideas never goes away from them, they make sure that they can deliver on them or bring in the plan /action to do it

Into the future : Intraprenuers are forward thinkers, thinking what’s next, not satisfied with what is today. They are someone the founders and leaders love to brainstorm and take guidance for investing.

Disruptive thinking : Intrapreneurs are out of box thinkers, often challenge the conventional wisdom, often carve out the next course of investment

Don’t miss these great articles on Intreprenuers in Forbes and HBR from where I picked some of the attributes.

So in conclusion, Stay happy as an Intrapreneur – you have lot of company – and if you are the owner, please take care of your Intraprenuers  – and think about success of Rajinikanth 🙂

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What you need to make a Sholay?

I am a great fan of analogies and for software products that we make, I always try to get an analogy as we grow through the journey. In a recent post I had shared the medical analogy of classifying how software products can be classified as vitamin, pain killer or vaccines.

One of the favorites for we Indians is cinemas, whether hindi or tamil or telugu, and here is another analogy I would like to share connecting the world of software products – with world of cinemas. We all set out to make a hit, a Sholay !

Sholay

Now let’s discuss what we would need to make, a Sholay:

Place – First thing, choosing the place to make it is very important. In movies, the destination is Mumbai and most of the folks who aspire for film career move to Mumbai, and the next best destination is Chennai for south indian movies. Bollywood gains its name from its global cinema hub – Hollywood in California.

mumbai bangaloreSV  For software products, destination is Bangalore, where many across the country migrate for an aspiring career in software, considered as silicon valley of india. Especially with the software product startup momentum, Bangalore is certainly the place for the ecosystem. Other locations such as Hyderabad and Pune are the other smaller hubs catching up in this front. In the global context, its bay area or seatle in US, the land where amazing software products have been made or being made.

So if you are a startup, start to think and put a lot of importance for where you want to operate. These days Govt. policies also is an important factor for you to seek help for building the products

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But the main consideration for choice of the place is offcourse the talent and the people, and the people who are willing to invest. In a recent article, India and Bangalore took places in top 5 global destinations for VC funding

People

Analogy gets interesting here, as there is always a belief that people with best coding skills can get out successful product. And it’s the same perception with movies where many think a Shah Rukh or Rajinikanth or other actors/actress are all about for the success of movies. But over the years, directors, screenplay writers, music directors, cameraman and many others who are behind the scenes have carved a name and gained significance for success of the movies.

Here is a fun way to connect the who’s who of movies to that of software products, as the goal is here is to establish the fact that “The Team” of people wins it all

Actors – Developers: Whatever is visualized or conceived, comes to life only when actors actually perform the way it should come through. The actual delivery or execution is completely based on what/how these people (actors or developers) really do it. Some actors do it in one shot, some need more shots, understanding the full picture and working with other co-actors. Same is the case with developers who can understand the full picture and do their parts well.actoractress

Cameraman – Designer: Camera men give shape to the movie that gives a visual appeal. This is a key ingredient and skill for success of the movie. Same is the case with Ux designers who really depict how the product should work and interact. Even the best of scripts and stories will not make an impact without a visual impact. cameraman

Producer – Business Sponsor or Venture Capitalist : These are the guys who put the money. They determine how big or small the movie or product can be. They also reap the benefits of the business success of the movie or product. Production houses in cinema are equivalent of companies or venture capital firms. VC-Logos

Editor – Quality Assurance : Movies are made to great lengths, probably for a 2 hours movie, there are many hours made of movie that gets produced. But this gets edited to capture the key parts, making sure the movie comes out in best quality to capture the story and screenplay. In product development context, quality assurance does a similar function of testing and providing suggestions to cut the irrelevant. Especially when different pieces of the product are integrated and tested, it exactly resembles editing. editing

Media & Promotions – Product Marketer : Trailers, promos are very important in exciting movie buffs to get attracted to particular movie. Especially when there are several options and competing movies releasing around the same time, its important to do the right promotion focused on the right audience. Same is the case with products, while you may have the best products, if its not marketed well, you are bound to miss getting the attention. In the current world promotions needs to be across multi-channels. mediapromotions

Screenplay – Architect: Screenplay is exactly what defines the “how” part of the movie and all the details. Few times this is done by the same person who directs the movie, but is different in most cases. Architect defines that in product development. He works on the how part to realize and lays out the path to realizing the same. screenplay

Story & Director – Product Manager (or Project Manager): Director in movies is central orchestrator and often the guy who has the real vision of what he or she is making, works to get best out of different available talent and gets involved in every aspect of the movie. Product manager does this role in product development working with different stakeholders – and key person responsible for success or failure of the movie or product. In case of startups, typically founders dawn this role.director

Movie Critics – Analyst: When the movie is out, there are several critics who provide rating, comments and reviews about the movie. They are key influencers that bring audiences to theaters. Now with social media we see every one becoming a critic or reviewer. In case of products, there are several analyst out there who review and provide comments on the product.moviecritic

Movie Audience – Customer/Market: And ultimately the audience to the movie or the customer of the product consumes and provides their feedback, they are the voice to propagate it to wider (references in case of products). There are different types of audience and the tastes differ significantly based on demographic, motivation, interests etc. Also there are categories of markets for movies – A,B, C city audience whose tastes vary. There are movies that are made in keeping what audiences want and some other movies are made which audience may dream. Products also go through the same evolution, some are made based on current customers’ needs and some are made for the future that customers get wowed, some works well in developed markets, some better in emerging. audience

Each of the above persons may go onto do one of the other roles, or remain as experts in their area. The people associated to a movie or products are emotionally attached to it forever. Usually startups have founders and few people doing multiple roles in the beginning.

Product

The movie – The product

Finally the product – the movie is the output. It can be a huge success or failure. It can appeal to some audience and may not appeal to others. There are few that appeal to everyone. Some become classics, some are short term flicks, some stay for eternity as best sellers. Same is for products.

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Sequel –  An interesting point about the market is like in movies where we have seen sequels of successful movies remade with a new flavor, we see the same with software products where hit products get remade with a different theme. And always the original ideas or themes has always a value, but sequels also have good market.

Even if you don’t have all the skills, its necessary you have to get the necessary skills beyond just development to make a successful one

Are your ready in the right Place, with right people and to make that thumping hit product for right market ?

Thing Big, Think of Making a Sholay !!!

Baby steps to an Indian Microsoft

A country well known for its software services now has an opportunity to build world-beating software products.

At a recent corporate awards ceremony, Tata Consultancy Services (TCS) was crowned as the company of the year. Piyush Goyal, the Minister of State for Power, Coal and New & Renewable Energy hurriedly stepped up to the lectern after the award was given. He told the assembled glitterati that TCS had promised to give the All India Institute of Medical Sciences (AIIMS) a modern, nay, world-class hospital management system by March 31. In the tentative clapping that ensued I heard a big snort from my right. The scepticism of the gentleman sitting next to me was rooted in the belief gaining ground that bespoke software systems were outdated and presented a sub-optimal choice.

The predicament of enterprise technology clients stuck with archaic bespoke software systems is no longer common. Bespoke software systems fell out of favour 20 years ago. Firms switched en masse to on-premise enterprise software products. They were cheaper, easier to upgrade, and yet extensively tailored to their needs. This shift in the late 1990s created two sets of players: product vendors like SAP, and implementation consultants like IBM Global Services and Accenture. Soon, Indian IT services players like TCS, Infosys and Cognizant muscled into the game and grabbed considerable market share.

Lost in this success story is the narrative about Indian enterprise software product vendors. For instance, iFlex built a great enterprise software product for banks, which Oracle snapped up for a billion dollars in 2005. Kochi-based IBS is a leading product vendor for airports and airlines, and is now big enough for an IPO next year. PARAS, a hospital management product from Bangalore, is grabbing the industry limelight by winning global deals involving hundreds of hospitals.

If the Indian IT industry has benefited from the shift away from bespoke systems, why did AIIMS miss the bus? In general, why has our public sector been so slow to buy enterprise products? Government officials are not to blame for this. Unfortunately, our IT services firms became protectors of status quo in the government sector. While it helped them milk their fading bespoke systems for longer, it also created crumbling government systems and robbed the nascent product industry of a big market. Luckily, the new government has started fixing the issue.

The Growing Shism

Another breed of enterprise product vendors is emerging. Companies like Workday and Salesforce personify this new wave. They offer on-demand products. These require less customizations and work on cloud-based data centres. So, as Workday says on its website, they are a “fraction of the cost of upgrading from their incumbent vendors”. Naturally, customers love these new-generation products. They are called Software-as-a-Service (SaaS) products. And they are growing like wildfire.

A schism has opened up in the Indian IT industry over SaaS products. The implementation consultants don’t like them, as they need only minor adjustments. They look at them with a jaundiced eye of a traditional bespoke darzi [tailor] looking at readymade clothes. Going from stitching custom pants to doing length adjustments for readymade ones is a gloomy shift for IT services providers. But it’s a boon for our software product start-ups.

In fact, Indian SaaS product start-ups are on a roll. They are even getting begrudging respect from Silicon Valley. When ZenDesk, the SaaS market leader in customer service desk management products, did its roaring IPO earlier this year, it listed six key competitors in its SEC [US Securities and Exchange Commission] filing. Four of these – Kayako, Freshdesk, Supportbee and Tenmiles – are Indian! Indian SaaS product players are becoming global category leaders. Zoho, for instance, sells a CRM (customer relationship management) product at $12 per salesperson per month and is the market leader in this mid-market segment. It is flanked by Salesforce in the enterprise segment (at $60 per salesperson per month) and a raft of players, mostly Indian, in the SMB segment (at $3 to $4 per salesperson per month).

This availability of, say, CRM software product at every price point is a big new story in the IT industry. Unlike cars or smartphones, we have never had different software products to cater to every price segment. SaaS has changed this. As a result, everybody can now afford a software product. Hopefully, this time, government policy will build on this new generation and not let incumbents hold things back.

My Cup Runneth Over 

Two other pockets of explosive growth are exciting. One is the much-discussed rise of the digital consumer in India. This has led to the birth of Flipkart, Ola Cabs, Stayzilla, Newshunt and others. The other pocket is less sexy but it’s even bigger. It has to do with software infrastructure.

Old software infrastructure is being replaced at a pace previously unseen and is creating lots of product opportunities. Data explosion is driving endpoint data protection and governance products. Video explosion is driving dynamic ad insertion products. E-commerce growth is driving a new generation of search infrastructure products. Corporate mobile use is driving new agentless Bring-your own-Device security products. Social media is driving real-time social media analytics products. Now here is the punch line: in each of these categories, the emerging global leader is an Indian company! This is an unbelievably powerful development. For instance, Druva, a Pune-based start-up, is the global market leader in endpoint data protection and governance and is set to do an initial public offering in the US in 18 to 24 months.

Daring to Dream

Behind this optimistic turn of events is a new type of a technology entrepreneur. He (and, sadly, its mostly he so far) is unshackled from the restrictive dream of being the world’s back office. He doesn’t think in terms of labour arbitrage. He is a missionary, a creator and disruptor of status quo. And he has a blazing desire to change the world.

Team Indus embodies this spirit. This team is a motley group of passionate technologists that aims to land a robotic craft on the Moon by December 2015. This is literally a moon shot. Not altogether surprising to many of us, this team has emerged as one of the top three teams in the prestigious Google Lunar X-prize!

There are other moon shots in the works. Some are pivotal to developing our defence, aerospace and electronics industries. Others are about building highly affordable software products that will bring competitiveness to small businesses, teaching effectiveness to schools, productivity to health-care centres and new skills to farmers. Let’s not blow this chance. Let’s give these efforts the policy oxygen they deserve.

The country that gave zero, calculus, yoga and chess to the world is dreaming again. It wants to retake its rightful place in the world. It’s not satisfied being a back office for everybody. It dreams of powering the future with its ideas and inventions. It dreams of being a product nation!

This article was first published in Business Today

All I know about Product Startup Recruitment…I learned from the movie Moneyball!

Today, I was watching Moneyball, the movie for the third or fourth time! Every one of those scenes and dialogues was a lesson in recruitment that every product startup could use! I have used them and they have worked for me in fantastic ways! What better way to learn lessons in startup recruitment than watch a highly enjoyable movie with fantastic actors like Brad Pitt and Jonah Hill!

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Having lived in Silicon Valley in the early 2000s, on the East Bay, having seen some of those Oakland Ace home games myself in person,  and having followed the A’s improbable victories in the media with my mouth open in astonishment, it could not get any more real and personal!

The movie starts out with the New York Yankees having a budget of $120M for player salaries and Oakland Aces having a budget of $40M. And the Yankees are stealing the best players the Oakland As and other teams too!

Sounds familiar? Competing with larger companies with deeper pockets for your employees?

So how do you compete and win? That’s the premise we start with.

Billy Beane: Aaahhh! The problem we’re trying to solve is that there are rich teams and there are poor teams, then there’s fifty feet of crap, and then there’s us. It’s an unfair game. And now we’re being gutted, organ donors for the rich. Boston has taken our kidneys, Yankees takin’ our heart and you guys are sittin’ around talkin’ the same old good boy nonsense, like we’re selling deeds. Like we’re looking for Fabio. We got to think differently.

Let’s start with that! As a product start up company when you are ramping up, you are not a rich team, you are not a poor team, fifty feet of crap, and you are lower than that, given the lack of resources, especially if you are  bootstrapping! You may have star technical co-founders but you may need a larger team. Everybody cannot be a chief.  You need foot soldiers! You need to think differently!

Peter Brand: It’s about getting things down to one number. Using the stats the way we read them, we’ll find value in players that no one else can see. People are overlooked for a variety of biased reasons and perceived flaws. Age, appearance, personality. Bill James and mathematics cut straight through that. Billy, of the 20,000 notable players for us to consider, I believe that there is a championship team of twenty-five people that we can afford, because everyone else in baseball undervalues them.

So goes a quote early on in the movie!

People are overlooked for a variety of biased reasons and perceived flaws. Age, appearance, personality.  Top tier schools have all been picked clean. Look for overlooked people. Look for that unusual project in their resume. Ask the candidates about their passions and hobbies. You may be surprised with those gems that others overlooked. Tier 2 and Tier 3 schools  will have those people who did not make it to a top tier school for whatever reason. Their parents may have been sick during their high school final year. They may not have shown enough interest at that time to make good  enough grades in their high school year to get into a top school. They will be so grateful that you have confidence in them and are giving them another chance!

This does not mean you lower standards regarding technical competencies and knowledge. Test and interview for those as you would anybody. Look for those unusual people that are good but your mind rejects unconsciously because of age, appearance or personality!

How could the A’s  keep winning games against bigger and well funded competitors with a team made up of rejects and undervalued players? The key word here is undervalued!

Peter Brand: Billy, this is Chad Bradford. He’s a relief pitcher. He is one of the most undervalued players in baseball. His defect is that he throws funny. Nobody in the big leagues cares about him because he looks funny. This guy could be not just the best pitcher in our bullpen, but one of the most effective relief pitchers in all of baseball. This guy should cost $3 million a year. We can get him for $237,000.

Look for those Resumes that look like people who throw funny! Extraordinary interests in a variety of tools, languages and approaches. You want a start-up team that has breadth and depth. That candidate who gets so dogmatic about Java or Objective C or Ruby on Rails and thinks that everybody else is stupid to think of any other alternative is a problem waiting to happen! It’s a person who has not learned the difference between one tool and a toolbox full of tools. You need a carpenter who knows when to use exactly the right tool, not an operator of a single tool!

Peter Brand: Okay. People who run ball clubs, they think in terms of buying players. Your goal shouldn’t be to buy players, your goal should be to buy wins. And in order to buy wins, you need to buy runs. 

Figure out what you need as outcomes from the team members, not the function. You don’t need programmers, you need products that work. You don’t need Customer Service representatives. You need satisfied customers. You don’t need s sales team with a Director of Sales. You need Sales! Focus on how they have achieved these things in their past life. Look beyond the resume. Talk to them!

Finally, don’t second guess yourself! Explain the mission of the start up  and ask the question – “Do you believe in this thing or not?”

Yes. Watch the movie Moneyball if you want to know how to do recruitment for your product startup company!