Funding Game – The rules and the hacks via @skirani & @BKartRed

The weather in Chennai was finally getting kinder & more pleasant in tune with the time of the year, much like the funding climate which has been less testing on the entrepreneur in general. Depending on whether you ask a consumer product entrepreneur or a B2B SaaS product entrepreneur, the level of optimism could vary, but it’s optimism all around.

As a pre-event runup to SaaSx2, we met at Freshdesk’s office in Chennai, for the Roundtable on “What it takes to fund a SaaS company?”.

Shekhar Kirani from Accel and Karthik Reddy from Blume, joined by Girish Mathrubootham from Freshdesk, anchored the conversations.

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Shekhar and Karthik started the round table, with some pretty interesting nuances about what numbers ought to add up, for their investment to make the returns they promised to their limited partners. The conversation touched upon what it takes to get funded at the early stages (upto Series A) and what it takes to be on that path, beyond Series A. Girish chipped in with personal examples of how Freshdesk got funded and his first-hand insight into looking at early stage startups that get funded (or not)!

Here are some bite-sized insights from the conversation that lasted for 3 hours:

On the options for the entrepreneur

  1. Indian B2B entrepreneurs have bootstrapped their startups remarkably well that it’s not an exception. If you are a B2B entrepreneur bootstrap or do more with less. Wait for the right strategic opportunity to scale. With numbers backing you up, raise for growth.

2015-10-07 11.12.22On what drives investors’ decisions

  1. Don’t get discouraged with ‘No’ from a partner of a VC firm. They have their biases and baggages. It’s the partner who has a view and not the firm. Find your champion.
  2. Most investors don’t like it if the outcome has a cap to it — there’s a maximum that you can do in the market and that sets a pretty hard ceiling to crack. In such cases, you’ve to out-execute everyone else and that’s a hard ploy and makes less exciting for the investor. Example: Would you start another CRM company now and if so why would you do what the rest of the 1600 have not done. Even if you execute well, what market share can you capture?
  3. VC firms pitch to Limited Partners (wealthy individuals, family offices, pension funds etc.) more than startups do to investors. They’ve the same issue of having to convince an LP that a certain startup that’s pre-revenue will get an exit worth $100M in 7 years. To do that in India, when there was no such exit till recently, made it even less credible.
  4. Most funds last for 10 years. 3 years to invest and 7 years to grow and nurture those investments towards exit events.
  5. Among the top quartile or decile of startups in a portfolio, one company returns the entire fund. Top 5 companies return 90% of the capital.
  6. Each startup has to be a prospect for a $500M exit, for the fund to meet its “Return on Capital Employed” goals.

On what investors look for in a startup?

  1. In a SaaS startup, front loaded costs are high. So your first two rounds are not about revenue or profitability but more about Product-Market fit and elimination of business model risks.
  2. Integrity, smartness and hard working ethics of the team are important but not sufficient. There has to be a potential for $500M exit for that startup for investors’ math to work. Anything less is already a sub-par outcome.
  3. It’s the job of the entrepreneur to make the VC look and realize how big the market is. They see a 1000 pitches a month and carry stereotypes. Help them make the context switch.
  4. Integrity cannot be stressed enough — Questions about India’s professional ethics do come up.). Indian LPs too find it hard to fathom that it’s possible to legally generate a 25x outcome from a startup, given where they come from and what they’ve seen.

2015-10-07 11.12.37On how to negotiate investment terms

  1. Clauses are there to protect the downsides for an investor. If you understand why they are there it’s easy to have a conversation around them.
  2. Most dissonance that an entrepreneur feels is because s/he does not understand the responsibilities the investor has to his/her fund and their LPs.
  3. Clauses such as liquidation preferences are there to protect the downside of the investments. So long as you cover the down-sides as an entrepreneur, your negotiation leverage for not carrying over these clauses to subsequent rounds is high — Don’t get it yet? Ask entrepreneurs who’ve raised several rounds, on how to negotiate.
  4. Drag along clause is there so that an investor can get the fund its returns as the fund comes to the end of life. If that goal conflicts with your startup’s, look for funds that are early in their life, to take money from and thereby give yourself a better runway.
  5. Everything is negotiable if your numbers are good. All downside protections kick in only during the bad times. So the best way to stay on top of the negotiations is to execute well.

Contributed by Ashwin Ramasamy, ContractIQ

iSPIRT ProductNation Playbook RoundTable on Sales(Bangalore)

In line with iSPIRT ProductNation Playbook objectives to support the emerging software product development industry in India, we are conducting a Round Table (#PlaybookRT) to share, discuss and learn from experiences for sales challenges and growth for the product companies.  

What can you take out from participating in #PlaybookRT

1.      Understanding of Go to market choices and exploring the right kind of sales channel for your Organization (Direct, Channel, Inside Sales, Online sales)

2.      Measuring sales productivity / metrics – Importance of a pipeline and effective lead generation

3.      Leading practices followed by effective sales team, Sales structure and process alternatives in industries / companies

4.      Reviewing alignment between organization strategy and sales structure 

Who can attend?

The session is open to the company’s CEO, Founders or head of strategy/Sales. Applications are due by the date – 25th Feb. The goal is to have at most 12 companies so as to make the interaction effective. If there are other interested attendees, we will arrange subsequent roundtables. We will confirm the short-listed companies by date

This PlaybookRT is FREE and there are no charges.

To apply for this PlaybookRT  please fill up the online application  and we will get back to you by 26th Feb ’13. The Playbook Roundtable will be led by Aneesh Reddy, Capillary Technologies

The Who, What, When, Why and How of Consumerization of the Enterprise

Users of enterprise software marvel at the ease of use of facebook, twitter and gmail on their mobiles, tablet computers and desktops! Then they wonder why their enterprise software should not be as easy to use or at least be available from their own devices. The CEO wonders why she cannot see the company graphs and charts in vibrant colors on her iPad at home on her sofa, while watching TV! This is where the consumerization of the enterprise sets up expectations of mobility, flexibility, ease of use and at a minimum, just being able to access enterprise applications from these other devices!

Consumerization of the enterprise is exciting from an end user point of view, but brings with it a number of new issues of security, availability, and application responsiveness that need to be addressed by the enterprise software maker or the IT department. Enterprise software product start-ups need to take this trend very seriously since mobiles and tablets are getting only more powerful, less expensive, and ubiquitous. By the time they mature and emerge from a start-up stage, this may not be a nice to have but a must have. So, here’s a Who, What, When, Why and How of Consumerization of Enterprise Software. This is a rather involved subject to be covered in a single article. I will cover the basics and provide links to additional material as appropriate.

The Why

Users of enterprise applications like the mobility that comes with smartphones and tablet computers. They see fairly sophisticated things done with these devices in their personal lives and are wondering why the same should not be true of their enterprise applications! They see that these devices are powerful computers in their own right and are wondering why they should not be using them for work.

The What

Consumerization results in a number of new expectations of enterprise software – use of inexpensive commodity servers for hosting the application if on-premises or a Software As a Service (SaaS) model, browser based interfaces, access from mobile devices and ease of use that matches consumer applications like Google, Twitter and Facebook. Consumerization involves the design and implementation of Bring Your Own Device (BYOD) policies where employees use their own devices to access enterprise applications and data. What happens to the enterprise data that may be stored on them,  if they lose this device or it gets stolen? What happens when this employee leaves the company? How do you make sure that the company data or the applications are no longer accessible?

The When

In many developed countries, smartphones and tablet computer penetration are near saturation already with many individuals and households having many of these devices, each. In India, the annual penetration and total market saturation may be lesser but it is only a matter of time. Even in India,  at the C-Suite level usage of these devices may be pretty much near saturation. So it’s not a question of if, but only a matter of when. This is especially important to enterprise start-ups that will face all of these issues by the time they have their products ready and achieve market fit.

The Who

Consumerization involves a host of policy and technology issues. Not all of them could be resolved only with the software product maker or the IT department. Access to applications and data may be policy issues to be determined by management and implemented by the IT security folks within the company. Software designers may need to address the ease of use issues that bring the enterprise applications closer in user experience to popular consumer applications like Google, Twitter and facebook.

The How

Consumerization involves making the user interface of the enterprise application on mobile devices, easy-to-use like those of consumer applications, native or HTML5 based. Bring Your Own Device policy implementation may involve the use of Mobile Device Management (MDM)  software which allows organizations to register and allow only authorized devices to access enterprise applications. In case employees need to be allowed access only to certain applications and not to others selectively, Mobile Application Management (MAM) software may need to be used. Chris Swan presents these issues in a very organized and understandable fashion in a video here and a presentation here, in case someone wants to dive deeper into the technology issues.

Consumerization of the Enterprise is about managing the expectations of the users of enterprise applications properly; answering questions such as – why can’t I use my smartphone or tablet to access the company’s application? Why shouldn’t their interfaces be as easy-to-use as my Gmail, Twitter or facebook? The technology and the design approaches for making this happen are already there. It’s only through careful analysis and addressing of issues that these objectives can be met, while at the same time balancing other issues such as security of data and applications!

Water cooler chatter 15 years ago used to be about what happened on Seinfeld. Now it’s ‘Look at what I’m doing on the enterprise network with my mobile device. – Bob Egan, vice president of mobile strategy at Mobiquity

How a much needed niche banking product was born – The iCreate story.

ProductNation caught up with iCreate Software co-founder Naren Santhanam, on what went in to the making of a successful product.

It was circa 2006 when Naren met Anup while they were consultants on the Banking vertical at a technology MNC. They knew from experience that banks had a challenge in accessing information across different systems and there was potential in pioneering something exciting. Over a series of extensive debates they decided on developing a decision enablement product exclusively for the banking sector b leveraging the best of Business Intelligence and Data Integration technologies. 

At that point in time Banks which wanted to have BI & analytics had to develop a customized solution over the available tools, employing the services of an SI. The banks functional team would provide the business requirements. This resulted in substantial lead times apart from higher costs; even then, id guarantee the desired results. 

The big idea

The iCreate idea was based on the founders’ expertise with the functional nature of systems that banks used and other transactional systems. They conceptualized a product that could connect with the bank’s ecosystem quickly. 

This ensured the product could be up and running powering the bank’s decision needs in a fifth of the time conventional approaches take. Also, ideated were new versions/modules of the product that could be rolled out quickly, making the product scalable and customizable to a bank’s requirements.

Both Naren and Anup were confident that banks in emerging markets would see most value in their product as they were still in early phase of technology adoption and competition was low.

Between then and 2009 they invested substantial efforts in understanding the intricacies and pain-points faced by the banks in emerging economies before deciding to focus efforts on them. 

Naren does a quick flashback, “It was an early stage in my career and life, when I had an abundance of energy and not too many strings attached, which made it easier for me. We were clear on the direction, given our past lives in the banking technology space. The big idea was to create a banking-specific decision enablement product”. Since it was a capital intensive proposition, they agreed to embark on the consulting route and then deploy the insights in shaping the product. Naren continues “Yes, there were several challenges of staying afloat and not losing focus on the long-term goal of creating a product company. The last 7 years have been the most fulfilling and exciting ones- something I wouldn’t have ever experienced in corporate life”.

On high octane

They began providing high-end banking technology consulting to select banks in Africa. In 2009 they approached the prestigious National Bank of Kuwait (NBK); while the product was still in its infancy. It was their domain knowledge and technology expertise that won them the account. NBK signed up iCreate to play a pivotal role in their ambitious enterprise transformation initiative, which is lauded as a first-of-its kind for a start-up. By late 2009 iCreate was well entrenched in the banking decision support space. This was around the time they received their first round of VC funding from IDG Ventures India.

By then the product had started taking shape and was christened ‘Biz$core’ – a unique name that encapsulated BI, Core of Banking Systems, Score for Scorecards, Biz for Business and the $ sign signifying money.

iCreate began quickly onboarding the best tech brains to work on the product. They also put together a global GTM team with a ‘whatever-it-takes’ DNA to take Biz$core’s unique value proposition to banks worldwide. By then Vivek Subramanyam was onboard as CEO to pilot iCreate’s growth and revenue strategy. 

Proof of the pudding 

With the change in strategy, the journey started getting more exciting and iCreate found itself in an accelerated growth mode. iCreate’s banking customer count today stands at an impressive 22, of which 16 were added in the last year and a half alone. From a revenue stream comprising 25% product sales and 75% consulting services in early 2010, the split reversed to 70% product sales and 30% from consulting services towards close of FY 2013. 

iCreate’s early stage  banking customers from across diverse geographies, played an active role in in defining their products into a well-rounded ones. Naren explains “Leaders like HDFC Bank and IndusInd Bank with complex business processes, trade finance specialists like Ghana International Bank, Metro Bank – UK, progressive banks like East West Bank, Philippines helped us tremendously with their insights as we were developing our product.” 

Mission to achieve the vision 

iCreate today boasts of five banking-specific products that span critical areas like decision enablement, risk, compliance, regulatory reporting and Basel; and has plans to launch five more during the next year. The recent series-B funding from Sequoia Capital and IDG is expected to help them further expand their product portfolio and foray into newer geographies including North America. 

“Our focus on emerging markets like Asia, Africa and West Asia continue, and we have already established our presence in markets such as Egypt and the Philippines. There are two promising deals in the offing from the UK as well. Most importantly, there is that sense of pride of having created a product that completely changes the way banks look at information management”, remarks Naren. 

iCreate’s road map definitely looks interesting and seems to be aligning well with their vision statement what they call the ‘Vision 5:50:250’, i.e., to be among the top 5 in BI for banking space, win 50 strategic banking clients world-wide and touch Rs. 250 crore in revenues by FY 2015.

Managing business is about having the right data at your fingertips

Hindsight, they say, is 20/20.  The advantage of hindsight is that all the data that affects a decision has been revealed and is known.  Unfortunately, real life never works that way.  As an entrepreneur, you have to operate on a combination of one part data, one part intelligent guesses, and, if we are really frank about it, one part luck.

Managing a business, when broken down into its simplest form, is about making a series of decisions. And how those decisions are made can make all the difference.  Most entrepreneurs have a lot of faith in their gut or instincts. And why not? The decision to become an entrepreneur itself is one that is based on passion, the belief that you have a winning product or service idea, and the unquenchable desire to do something on your own. Just look at the words – passion, belief, desire. Not really things you can measure and make data points about. But, combine or guide your gut feeling with the right data at the right time, and it could lead to better business decisions.

The trick, of course, is to have access to the right data at the right time.

The data that you need to make decisions while managing your business, in many cases, is about your business itself.  It is about how much you spend, how much is due to you, what is your inventory situation – seemingly simple things. But if you are able to have this information at your fingertips, accessible whenever you want it, it makes your decisions not just faster, but more sound as well.

The first step to having the right data is to collect it.  Do you have systems and processes that ensure that every important piece of information is captured? It could be your CRM, or your financial management software.  Unless the data is captured and categorized, it cannot be utilized to distil useful information. Because raw data is just that, raw; and what you need is the analysis to make an informed decision.

When you are managing a business, you have to have your eye on the ball at all times. And that means having all your data accessible in a form that makes it easy for you to interpret and make decisions.  For example, if you are able to track overdue payments as soon they become overdue, or are able to see the payment pattern of a specific customer with a bad payment record in just a few clicks, it makes it easier to track and take remedial measures.  Having anywhere, anytime access to the right data empowers you with knowledge, and helps you monitor and manage your business with complete and up-to-the-minute information. The closest you can get to the 20/20 vision that hindsight promises.

Which brings me back to my starting point. I have found that the more relevant data I have, the more intelligent my guesses are. And the more confidence I have in going with my gut feeling.

Enterprise customers Vs Startup customers

When you are selling a product to a customer, you will have to understand the characteristics of the customer. This is especially true if your product solves the problems of both Enterprises and Startups. Both are unique in the way they buy products. Enterprises have a process in place and hence you need to be very very patient(sometimes, it may take an year for an Enterprise to decide to go with your product). Startups are more willing to experiment and will try out your product more willingly if they think that will help them gain an advantage. The selling points are also different. For Enterprises, you have to be able to convince them that your product is very stable and has already been tested in a production environment. They will give more weightage to existing customer references. Startups are more interested in the feature set. They want the latest bleeding edge feature set which will help them in getting an advantage over the competition.
Based on my experiences, I have listed down the happy and sad characteristics of Enterprise and Startup customers.
Enterprises
Startups
 
So, to put it in a nutshell, Startups decide fast and are willing to take the risk with you, whereas Enterprises are more slow in decision making, but once they decide, they stick with you and pay well.

The little Spark with great promise – Inaugural #PNMeetup on Pricing for Enterprise Sales

When a bunch (around 45-50, I didn’t keep the count) of Product enthusiasts – with experience accumulating into decades – gather at a single place to share their learning on specific topic in a compact & well-moderated session of 2 hours, it’s worth every bit. That’s how I felt coming out of the inaugural session of #PNMeetup – Pricing for Enterprise Sales: Specific & Important Topic, Quality Participation, Richness of Experiences, and Quality Conversations.

The location, Hauz Khas Village in New Delhi, carries a constant buzz and energy. Very apt for a meet-up like this. Kunzum Travel Café (Thanks for being a great host for the event!), should be happy because participants used up every nook & corner of the place. Many of us had to settle down on the carpet with no more sitting or standing space left! Of course, the snacks & coffee was great too. But, that’s not what everyone coming in was specifically looking for (especially since the last 500 yards got harder to make with the traffic and parking situation ;-)).

We were looking for some great (practical, experience based, relevant) conversations and takeaways on Pricing. And, there was plenty of it, coming from speakers as well as from the participants. As much as is possible in 2 hours of time, that is, also thanks to some great moderating & counter-questioning by Arvind Jha during speaker sessions, and Rajat Garg & Vivek Agarwal in the un-conference session.

Tushar Bhatia, Founder of Saigun Technologies, set the tone for Enterprise Products Pricing by sharing his experiences on Pricing Strategies and Sales tactics. Tushar emphasized that Pricing is not a linear decision, but a complex process and subject to assessment from multiple parameters. He also differentiated the Pricing Strategy from Sales Process. Pricing, as per him (in the context set of Business Planning, Scalability, Consistency, Standardization, and a reflection of the Value Proposition) is a guide at broader level, while on sales tactics front, one should be willing to consider the customer & geographic circumstances as well. The decision matrix for Pricing decisions typically is pretty complex, and a product undergoes multiple iterations of pricing models

Pricing for Enterprise Sales
Pricing for Enterprise Sales – Tushar

before arriving at the sweet spot. However, various types of customers may need to be assessed in their own contexts when deciding on a deal pricing, especially in the traditional Enterprise Sales scenario.

Tushar also emphasized that the Enterprise Licensing deals should consider not only the product pricing, but also the other costs (such as, hardware) and provisions (such as, for Product Support). The considerations on TCO are critical, because the customers assess the products, not only functionally, but also very critically from an operational viability perspective in longer term. Tushar also laid out few questions that need to be answered while deciding the pricing model. The detailed presentation from Tushar on “Pricing for Enterprise Sales” can be found here.

The discussion, then, veered towards the product pricing strategies in areas such as Telcos, serving also as a cue for Tarun Anand (CTO & Co-founder at Semusi) to pitch in and provide his perspective. He shared his experiences in working with the big Telcos on working out product strategies and pricing models. They tried out various pricing models, in partnership with Telcos especially, and had mixed results over time before arriving at something that seemed to work. However, pricing remains a volatile when dealing with the larger partners and in more complex ecosystems, such as Telcos.

In Tarun’s experience, one needs to ascertain that the partners in the ecosystem are ready to take your product to the market if that is the expectation. It is also important to ensure that the pricing terms & conditions are clear, and you are able to hold the customers as well as partners accountable in the operational limits as much as you can. After all, you want to focus on running the business and do not want complications of financial & legal nature. In the context of Pricing and products strategy, in areas such as VAS, as per Tarun, one needs to be very careful. “VAS is dead” in his words! 🙂

Tarun also emphasized “there are takers for product at ANY price point”. One need to clearly understand whom one wants to target, and also understand that it’s not only a question of moving the pricing point up & down in inverse proportionality with the volume of customer base. There are various triggers for the pricing, one of which is the “premium value perception”, and also the fact that once you move into a market with a particular price point, increasing it later on is almost impossible without hurting your customer base and overall strategy.

App Pricing Tactics
App Pricing Tactics – Prashant

The heat in the Mobile Apps makes the App Pricing a very sought after topic, and that’s where Prashant Singh (Co-founder at Signals) came in and provided a good framework for the high level App pricing approach. There are two clear distinct possibilities – Free & Paid. Complete Free, as per Prashant, directly leads to an Ad based model for revenue that shouldn’t be a preferred model as such for most app developers. In fact the question is not whether to go Free or Paid. Question is when is the user ready for monetization. “You hit when the iron is hot, as simple as that”, Prashant says.

Prashant provided a high level framework to judge which approach should be adopted by the App Developers, based on the two parameters: “App Life Span” and “Time to Realization of Value”. Based on a combination of the two, one can decide on the high level strategy (Portfolio/Platform/Utility/Device Embedding/Brand Apps…) and Pricing model (Advertisement, Paid, Transaction based, Freemium, Development level, and so on). Check out this presentation – App Pricing Tactics for more details.

One key point that drew interest was around the Price Point for App at the launch time. Contrary to the normal belief, Prashant says, one needs to launch the app at a price point that is higher than the Median price point for the App store. That provides the App Store an incentive to showcase the App, and it is important since App Stores control the downloads more than the “content” or “quality”, at least until critical mass. Growth Curve of the app can be maintained around Median and depending on the value prop of the App, the baseline pricing can be used at sustenance phase. Another strong point of view from Prashant came around the Advertisement model, which as per him is the last to be considered. And if Ad model is considered, his advice is to “not” let the control away – “Always have your server in loop”.

While all the content and discussion, and few laughs in between, served well to our appetites, snacks were served amidst a quick “Unconference” session moderated by Rajat and Vivek. We discussed and debated on some great points. I’m finding it harder to capture every bit here and I don’t want to be partial to only what I remember right now! I hope that if you attended and are reading this, you would be able to add your takeaways in comments section! 🙂

Overall, I had a great time. The highlight of the session, for me at least, was the richness of experience and passion for products. And I met some really cool folks! Many of us hung out until later in the night and continued the conversations, which is a great sign. A small impetus can go a long way, and I’m very excited that Avinash has triggered this spark that all of us as a community have to fuel into a passionate ecosystem around products. Great initiative, ProductNation! Looking forward to the next edition on Jan 19th 2013!

PS 1: And, there was a cake-cutting for Avinash on his Birthday! Great gesture!

PS 2: Some Tweets from the session!

How far should you go with Professional Services in your product business?

Turning on a giant switch

For any products company, product support is a given, and part of the products business fabric. However, almost all Enterprise Products Companies end-up offering the professional services beyond basic product support. These services could range from simplistic implementation support, to integration, to solutions-building, to architectural consulting, to IT advisory support. The decision to perform professional services could be driven by customer-demand, or by the intrinsic need of the product being sold, or even driven by the business strategy itself to generate peripheral revenue.

It’s important to understand where the boundaries lie, and what goal does a certain type of professional services serve. The decision to commit to a particular type of professional services needs to be driven by a conscious thought process. This is important because the time & resources required to build various skills & operating models for serving the various flavors, change dramatically from one to the other.

Professional Services in Products Business

1. Product Support

This is the core to the products model and serves as just that – support to the main products revenue, and to ensure customer satisfaction. While the core strategy for any product should be to make it so good that it requires minimal support, there’s always a need for support – offline and real-time for the customers.

2. Implementation Services

An ideal product is ready-to-use off-the-shelf, however, in case of Enterprise products the need to configure & customize could wary. Most times, customers demand for an implementation service packaged in the license deal initially, in order to ensure success. Most times, products businesses have to employ this mechanism also to close sales cycle and to ensure a consistent source of post-sale revenue from such services, and also indirectly to ensure expansion of the product usage through consistent personnel presence on the customer premises.

3. Integration Services

This is where it starts going slightly further away from the core skills that the organization may possess organically. Integration with the existing IT systems and other products at the customer premises would require the skills & management practices beyond the core areas of the organization. An extra source of revenue is one of the temptations, but there are also scenarios where integration of the product is critical to the success of the product, making such services mandatory. This is especially true if the product interfaces are not built with open-standards, and require the integrators to know the details of how the product is built internally. The correct approach would be to build the product interfaces in a way that doesn’t force the business into such compromise to induct professional services for integration. There’s an indirect impact of diversion of core product resources to such integration projects unless such professional services are pursued by design, and resources built accordingly.

4. Solutions & Consulting Services

This is where the game gets strategic, and resources expensive. And the reasons to do this are not any more intrinsically important, but strategically targeted to higher value to the customers and hence, access to the larger pie of the wallet. However, this is easier said than done. Unless there’s enough scale & case in the existing business to allow the focus on such services, strategic, and by design, a business is better off focusing on building the core products business stronger by investing resources there. This makes sense for the products, which are more like Platforms that provide larger leverage than in a Point-solution product.

5. Advisory Services

This is important for the products that are targeted for larger ticket sizes and are built for Enterprise-wide deployments. The IT strategy alignment as well as the strategic positioning of the product becomes important, and it also requires much larger IT leadership level involvement. For Enterprise Platforms, or even for departmental level strategic investments, this approach to professional services can bear fruits. However, building it into a business line requires the core product business to be strong, ready for the leap.

So what?

While the Businesses can look at starting off with the lower scale of Professional Services and build up over time, the decision is very strategic and long term. Professional Services, while offering additional top-line, could actually be a resource-intensice and money-draining proposition if not built properly. The mindset that governs the professional services line of business is drastically different from the product side of business. The operational efficiency is paramount, & profitability can very quickly take a hit. Even more importantly, professional services are more intensely people-driven and the skill sets required to build and sustain this business over long term are not trivial. Look, think, and think hard, before you leap.

PS: There are other considerations on Professional Services that directly or indirectly impact the core product business. I will cover in those in the next post. Until then, hope this helps! 🙂

Q&A with Software Startup Druva

Editor’s note: Druva’s inSync is a cloud-based unified solution for managing endpoint data in a mobile world. In this interview, Jaspreet Singh, founder and CEO, explains how the product differentiates in its market and how it provides value for enterprises. He also discusses an important attribute for startup CEOs. This article is brought to SandHill readers in partnership with ProductNation.

SandHill.com: When and where was your company launched?

Jaspreet Singh: We founded Druva in July of 2008 at Pune, India. We eventually moved to the United States after a Sequoia investment in January 2010.

SandHill.com: Please describe your product and your market.

Jaspreet Singh: Druva provides a unified solution to protect and manage endpoint data for enterprises. The solution integrates three functionalities — award winning backup, secure file-sharing and data loss prevention and analytics — to create a single unified cloud for IT to protect, manage and empower end users.

The enterprise endpoint landscape is ever changing. From PCs and laptops to smartphones and tablet devices and now a rising BYOD trend, enterprise data is spread across users, platforms, devices and geographies.

Data protection has been a crowded market space filled with legacy solution providers that have upgraded traditional server backup solutions to fit the mobile enterprise user. This has resulted in a lot of unhappy enterprises and great resistance from the end users to using those products because the solutions are resource intensive or do not offer sufficient security over public networks.

We built inSync specifically for the mobile user to address all the issues that legacy solutions were failing to address. The non-intrusive nature of the solution ensures that end users don’t even know it’s there. Our product helps users make the best use of the data and at the same time enables IT to protect and control the same information. The users can use Druva inSync to share and collaborate with peers on the data from any device. IT gets a single console to back up corporate information, visibility into what and with whom users are sharing, and is able to control the data using data loss prevention and analytics. It’s the industry’s first solution to integrate these features into a single unified solution.

Read the complete interview at Sandhill.com

Conversation with Customer Interaction Management Provider, Drishti-Soft Solutions

Launched in 2003, Drishti-Soft Solutions specializes in software products for Customer Interaction Management and now empowers more than 10 million customer interactions per day for customers in 40 countries. We interviewed CEO Bishal Lachhiramka about the company’s product development journey and other advice for startup CEOs.

SandHill.com: How did your company originate?

Bishal Lachhiramka: When I and the other founders (Sachin Bhatia, VP Business Development, and Nayan Jain, CTO) were in college 10 years ago, an idea clicked in our heads to build a technology to manage information better than existing ways, something that would stand ahead of its time even if we take today’s scenario.

While talking to seniors and advisors, we were told that India was not the location for building software products. Call it youthful exuberance or passion — whatever it was, we believed that we could succeed. This was the seed of Drishti, but we wanted to learn business fundamentals first before turning on our geek personas.

We provide innovative solutions that help businesses improve and manage their customer experience and customer reach. We were adamant that this technology would change how information is managed. Looking towards the future now, we aspire to be one of the top 10 recognized CIM solution providers across the globe.

SandHill.com: Is there a story behind your company name?

Bishal Lachhiramka: The meaning of the word Drishti is “vision.” When we started the company, we only had a vision. That vision was to build a successful technology from India and change people’s perception on our capability. The strongest thing we had when we started the company was purpose and vision.

SandHill.com: What is your target market, and did it change from what you envisioned at the outset?

Bishal Lachhiramka: Our target customers include: Hospitality, Healthcare, BPO providers, BFSI, Entertainment, Travel & Tourism, and B2C enterprises.

We initially catered our solution to enterprises and BPO providers. But small and medium-sized businesses (SMBs) have always been an important segment for our company. Our biggest challenge to date is scaling our solution to this segment, not only in terms of acquiring new clientele but to also help their businesses grow in the long-term.

Through hard work, several revisions and iterations, and constant learning with external help, we developed a better understanding of the SMB customer segment, sales process and success criteria. Thereafter, we were able to establish effective sales practices (including CRM development) that helped us address the challenges in this market.

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