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Service Oriented Startups

Last week a very interesting free e-book called “Software Paradox” was trending on Hacker News. The premise of the Service Oriented Startupsbook is, that the value of software as a product is diminishing, but the value of software as an enableris rising. Pure play software companies such as Microsoft and Oracle are fading in comparison to rising stars such as Google, Facebook, Apple, Amazon and newer ones like Uber, Dropbox, GitHub, AirBnB and others. None of the new age companies sell “software”. They all sell a service (or devices, in case of Apple).

The book goes on to argue that companies even prefer giving away their software innovations as open source so that they can get the respect of the developer community that they desperately want to attract. Apple’s operating systems are based on an open source flavour of Unix, GitHub has built a social layer on git, a version control system created by Linus Torvalds and Facebook is a leader in new age open source web development tools. So there is a clear trend of companies collaborating on an infrastructure and tool level and yet being able to create a lot of value in the services they provide.

They book suggests what pure-play software product companies should do in order to survive this next wave. There are a lot of great options described which range from moving to a subscription model to becoming a full-stack startup (doing very deep vertical integration in the markets they operate). In the context of pure play software product companies, where do we in India stand?

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A defining moment in the first episode of the new YouTube drama TVF Pitchers, an Indian take on the popular and brilliant series from HBO, “Silicon Valley”, is when the protagonist is about to dump his entrepreneurial dream and continue with an overseas posting. On his way to the airport, he sees large advertisements of Housing.com and Snapdeal and decides that his calling is a startup. On a side note, it is interesting to observe that the innovation described in TVF Pitchers is a “B-plan”, whereas the innovation on which HBO Silicon Valley is based, is a hypothetical “algorithm”.

My conclusion is that India has already leapfrogged to “Service-Oriented Startups”. The number of new startups and deals in the e-commerce and classified marketplaces domains greatly out numbers startups that have a technological innovation at the heart of the business. The aspiration of the entrepreneur who starts up today is to build the next Flipkart, not the next Google.

This is something we all will have to learn to accept. Like so many modern innovations we love using today are ones we did not invent, software is something we will rather use. Innovating on technology requires an intellectual rigour and ecosystem support that will probably never reach a critical mass in India. But amidst all this gloom, I still have hope that at least a few of the 3 million software developers out there will prove me wrong.

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Stop Imitating! Finding India’s True Self

A man with a severe tooth ache goes to the dentist, who upon examining the tooth, assures the man that the problem wasn’t anything serious and that a simple procedure performed under a local anesthesia would help repair the damage. Upon hearing this, the man gets very upset and  tells the dentist, “What? Local anesthesia? You think I cannot afford a foreign one?! I demand an  imported one!”

I heard this tale first some decades ago and it served to highlight, in a tongue in cheek manner, the Indian’s obsession with all things foreign while also showcasing the lack of awareness of what a local anesthesia was.

This obsession with the imported and  the foreign should have lessened, one would have imagined, after over 20 years of economic liberalization. Yet, Chidanand Rajghattta writing about Ang Lee winning the Best Director Oscar for “Life of Pi” in the Times of India – Feb 16th 2013 – had this to say “It was a big moment for Lee, but a bigger moment for his Indian fans when he ended his acceptance speech with a “Namaste”” Really? Indians felt pride, according to the writer because Ang Lee said “Namaste”?!

There’s a big lesson for Indian entrepreneurs. A lesson involving self-esteem, capability, the confidence and courage of one’s own convictions.  An entrepreneur cannot solve problems by just seeking inspiration, affirmation and trivial acknowledgement from elsewhere without the passionate driving  self-belief, a deep understanding of the problems to be solved and a gathering of insight.  Therefore, blindly copying models from elsewhere, by only reading about startups and startup ecosystems  in  advanced economies and  thereafter slavishly attempting to adopt those offerings and even behavior  without adding any real original material of one’s own is a recipe for tragic disaster. Imitation is the best form of flattery, and indeed homage, to the original; the imitator is, at best, tolerated but never respected for there’s no original contribution on offer that’s worth recognizing, just a momentary quick-fix solution. Many companies and entrepreneurs – even countries (think Taiwan and China) – start off imitating but then, the successful ones, move rapidly to invest in creating the infrastructure to develop the insights and then execute relentlessly to offer unique solutions to their problems.

Shekhar Gupta, Editor in Chief at The Indian Express, talking to Steven Spielberg is quoted thus “Walking down Champs-Elysees, I was very happy to see a hoarding for an Indian film which described the director as India’s Tarantino”.  So, what about an American director being described as America’s Anurag Kashyap? When will that happen? Should that happen and is that a desirable goal? What will it take to make that happen? So, rather than have debates and discussions around these questions, we bask in the pitiable glory of being second hand?

Shekhar Gupta goes on to say, “I would like to express a wish to you. …… So why don’t you come to India and do an epic on anybody—Buddha, Ashoka, Chandragupta, Akbar, Gandhi, Nehru—we have many themes and stories for you. But it needs a Spielberg to come and do justice to it.”

And how does Spielberg respond?  “I think it needs an Indian director to tell those stories and maybe I could help in the background” How big a tragedy is it when we are so eager to outsource the telling of our own stories and history? What does it say about us? What does it reveal about our lack of self-belief, the infrastructure, the competence, the capacity?

Since we learn and react only to what outsiders have to say, perhaps the following will be instructive.

Eric Schmidt, Executive Chairman of Google, on a recent visit to India said “The most striking Indian internet ……….. will come from Indians solving local problems. We know that India’s internet infrastructure allows Indian engineers to solve the problems of small businesses in other countries. If India plays its cards right, we’ll soon see Indian engineers and Indian small businesses tackling Indian problems first, then exporting the solutions that work best.” For India to play its cards right, it must first recognize that it has the cards and can learn to play its own game!

Drew Olanoff writing in Techcrunch on recent visit had this to say “If a country like India can stop worrying about being like Silicon Valley and find its true self, there could be a new RedBus every other week. It’s moonshot thinking, of course, but that’s what it takes”.

Finding its true self  – that’s a challenge for Indian entrepreneurs and for those involved in the growth of the Indian entrepreneurial ecosystem. Shall we all rise to the occasion now that there’s endorsement from outside?

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Stories are Better Than a Feature List

You’re at an event, and you’re ready. You know your product inside out. You know the competition. You know the licensing terms. The deals. The partners. The competition. Technical details. Market details. Detail details. Regulations. Strengths. Compatibilities. Your head is stuffed. Crammed, just when – A customer comes to you. “I’ve got sixty seconds. Why should I buy from you?”

You spent years learning and studying and now you’ve got 30 seconds. You choke on your own knowledge.  In this situation, has your strength, your deep product knowledge, actually become a weakness? What do you do? How do you convey so much information in such a small amount of time?  It’s these situations, when a 100-slide PowerPoint deck or a technical demonstration is not possible, when it is critical to turn to the oldest form of persuasive communication in the world – the story.

Your customers are being constantly bombarded by myriad of marketing messages as well as other communication – emails, blogs, and social media. How do you make them notice your message and remember it when making a decision? The answer again is a story. Stories are powerful. Stories propagate thru centuries without any media coverage and advertising dollars. We hear stories in childhood and we repeat them to our children. And the story goes on. Consider these two announcements from two of the biggest product and SaaS companies.

Microsoft’s Jan 21, 2007 announcement

As Microsoft continues to deliver innovations to its unified communication and collaboration platform – which includes Microsoft Exchange Server 2007, the 2007 Office system with Microsoft Office SharePoint Server 2007, and has solutions in the pipeline such as the next generation of Microsoft Office Communications Server – Microsoft’s industry partners find that business is booming.

Google’s Oct 11, 2006 announcement

Ever found yourself trading email attachments with several colleagues, trying to collaborate on a document, only to have someone chime in at the last moment with corrections to an outdated version?  Today, at the Office 2.0 Conference in San Francisco, Google launched a solution to these collaborative and document-management challenges: Google Docs & Spreadsheets

Which one do you think is easier to understand and remember? Which is stickier?  The Google announcement has elements of a story as suggested by Heath brothers in their book Made to Stick.

Technical people are horrible at telling stories. It is tough for them to move from listing technical features to telling stories. Here is one way forward – apply to your writing the SUCCES framework suggested by Heath brothers in their book Made to Stick. They say a sticky message is simple, has an element of unexpectedness, is concrete and complete, makes an emotional connect and is told like a story. I strongly recommend the reader to get hold of the book and practice what the brothers suggest.

Here’s another example from GE – look at their site.

Their lead story isn’t about the products they sell or the event they were at. At the core GE stands for innovation and they tell us about their innovations not by listing their innovations in a bulleted list with awards and partner logos attached, but by talking about their rich history, their leaders, their visions and their journey over time.  It’s a rich narrative and something we can all learn from – the products are there but it’s not their lead.

You need to create your story or others will create it for you. – What is the narrative for Apple, What about Google or eBay? What would your narrative be? Remember to make your customer a hero!

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NowFloats – Getting small businesses online in 4 SMSes and 13 minutes!

NowFloats – Getting small businesses online in 4 SMSes and 13 minutes! 

I love clear mission statements, and NowFloats couldn’t be clearer:

9.6 million small and medium businesses need a website. Only 0.6 million have one. That’s 9 million tasks on our desk (and that’s just in India!)

I recently got a chance to catch up with Ronak and Jasminder (Jas), 2 of the cofounders of this exciting company called NowFloats that aims to bring SMBs online, without making them sweat over it (other 2 co-founders are Nitin Jain and Neeraj Sabharwal) . NowFloats is a team of 20 (4 founders, 4 tech, others in sales and support), based out of Hyderabad, though their customers are spread all over India. Overall, I was very excited by what I listened and saw, I sense that NowFloat holds immense possibilities for small businesses and has all the right ingredients to be successful in its mission.

The problem for small businesses

Given increasing reliance of users on search, it is becoming important for offline small businesses to have an online presence. An online presence needs to have discoverability (users know that you exist), engagement (users interact with you and like you), and conversion (users visit your offline business). However, when creating such an online presence, a small business has to grapple with 3 problems:

  1. Creating a website takes too much time and effort – even for tech-savvy type, which a small business owner is not.
  2. Updates require engaging website developer again – too much effort and dependency
  3. Online marketing is hard and expensive, and requires digital marketing expertise, not something a small business owner has

Standard option currently for a small business is to do nothing about online presence; very few businesses hire someone to create, maintain and market their site which is very expensive option without clear ROI.

NowFloats solves this problem for small business in an easy-to-use manner at an extremely affordable pricing.

NowFloats Promise

NowFloats promises to allow a business owner to create a website in 4 messages and in less than 13 minutes – send the name and address of your business, website name you desire, and your website is ready to use! If you wish to update the site (messages on message board or updating any of the original details you provided while creating the site), it is as simple as sending another message.

It may look like a simple and easy website to create, but it packs a lot of punch:

  1. Site and every message are geo-tagged, which means local searches will show up your website and deep-link to your message.
  2. Your website and each message is search engine optimized
  3. Each update is a page so it can be shared by your customers on social networks, which again has endless social, search and business possibilities.
  4. Visitors can subscribe to get all subsequent updates, or leave message for you to follow up with them 

NowFloats – The Product

Design: NowFloats is a very well-designed product. Their company website as well as the customer sites are beautiful in their minimalist and pleasing design.

Technology: They have a scalable architecture, built using Microsoft technologies. They have 4 patents filed and 2-3 are on the way. They offer subdomains under nowfloats.com in addition to allowing customers to use their own domain names if they wish – like Body Granite Gym and The Courtyard & Cafe Courtyard do.

Analytics: They care deeply about analytics that customers get about their online visitors. Businesses get weekly information about how their site is doing (# of page views in a week). On their product roadmap, they have features to provide details like which messages got max view, keywords which generated maximum views, etc., goal being to show what type of content is attracting maximum traffic.

Pricing: Pricing Plans (5K to 12.5K a year) are very competitive, given that even hosting a site costs 3-5K a year.  NowFloats is still reviewing pricing strategies based on market feedback so expect this to change soon.

Test-driving NowFloats

As I took the service for test-drive, here are my impressions:

  1. It is very easy to set this up indeed. I was up and running with http://ilovebooks.nowfloats.com/ in less than 10 minutes.
  2. As soon as the site was created, I got a call from their customer service. They wanted to confirm my identity and walk me through the next steps, including collecting payments.
  3. I realized I picked a wrong name for my business, so I wanted to change. A call to customer support informed me that they will have to do the change for me, though an app is coming which will allow self-service. Later I found it was only partially true, the name (and many other details of the business) can be updated through SMS messages even now. I promptly used the service.
  4. I wanted to update the site using my laptop, but changes can only be done using SMS, upcoming app, or customer support. I find this a little annoying.
  5. I tried to get creative and sent an html fragment as an SMS message, which created a broken message on the site. Given that I can’t update it online; this requires me to call customer support. Later I was told how to do this, and also given the current target audience, this is not an often used feature.


Customer Acquisition

Clearly small businesses see value in NowFloats offering. In a short span, they have 1600+ customers live, including customers like Hazzel Ice Cream Cafe and Dr. Chandrika’s Kerala Ayurveda . I was fascinated by the variety of customers they have attracted, including my favorite restaurant in Hyderabad, a Nokia Priority franchisee, and even a personal branding site. These sites are discoverable (through geo-tagging, auto-generated tags and other SEO techniques, sites and messages come up in ahead in all search results) and drive engagement (users subscribe to the messages, businesses get notified when someone subscribes or shows an interest). Conversion (people visiting the business) is hard to track and NowFloats team is working on some solutions that will allow such tracking.

NowFloats has multiple approaches and channels to acquire customers:

  1. Geography: Started out with targeting Hyderabad businesses. Currently they are focused on Bangalore businesses. The goal is to have pan-India sales presence soon through partnerships and other means and continue to expand city by city.
  2. Catagory: One of the innovative ways they target a particular category is to target the franchise business owners of a particular brand. For example, they have brought many Nokia Priority franchisee owners online, same with Printo. Given the huge number of franchisees in India, this seems to be a winning sales strategy.
  3. Partnerships: They have a shop-in-a-shop model with Printo. Since Printo serves much of the same customer segment as NowFloats but with a complimentary service, this is a great move to gain customers.  They are exploring similar partnerships with complimentary service providers.

Couple of other things I would like them to focus on:

  1. Online Presence: I can’t discover NowFloats online. Google search for getting my business online didn’t say anything about them in first 3-4 pages. I think they need to make their discoverability better as they go forward.
  2. Social: Small businesses thrive on communities and loyal customers who like the service they get. One of the best ways to reach small businesses is to tap into this community and loyal customer base, through social or other platforms. I would love to introduce NowFloats to the small shops I visit near me, but there is no good way for me to do so.

Competition and Differentiation

When I researched around, surprisingly, there aren’t many cost effective ways for small businesses to create online presence. India Get Online program from Google aims to get Indian businesses online and are a viable option for a small business. However, I think NowFloats offers a more targeted and sustainable product, that can potentially complement the Google offering.

Google’s strategy is to get a basic site up for you so that you are visible in local searches, to stay visible. NowFloats focuses on getting a site for you and market it online for you, thus helping you stay focused on what you do best – run your business.

What Future holds for NowFloats

I see NowFloats extending itself in 3 areas:

  1. Richer Eco-system: NowFloats plays in the local search space through their mobile app. A successful ‘NowFloats for business’ means rich data about local businesses available for their app to make use of. Controlling the supply of rich data from small, local businesses has lots of grand possibilities.
  2. Richer Revenue Models: Currently, there revenue is subscription-based, and it may be hard to show how an investment of 12500/- per year translates into increased traffic (and revenue) in their offline business. Their goal is to evolve newer revenue models that can directly tie NowFloats revenue with SMBs revenue, thereby creating a symbiotic and sticky relationships.
  3. Richer engagement with businesses – Businesses need many services as soon as they realize the potential of an online presence. Selling online, driving deals, building software solutions for their businesses, etc. all can be offered once the business is on-boarded.

Power of an idea lies in simplicity and pervasiveness. After I talked to NowFloats team, I have been observing small shops around me in a new light. If the great little corner shop selling briefs could be easily discoverable, If my favorite restaurant in Greater Noida could be more engaging, if the grocery shop in my apartment complex had an easier way to let me know of his deals, I am sure these businesses would benefit immensely. And it is so simple for them to do so now – by using NowFloats. Nowfloats is a very powerful idea whose time has come – may all the power be with small businesses and NowFloats!

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What is that we have to build?

Every now and then, we hear people arguing about building “Microsoft” and “Google” of India. Companies like Microsoft, Google have built up incredible technologies and their contributions in improving our life is significant. When started, they started with big vision, a tough and relevant problem to solve, and brilliant team behind the vision. While I cannot look into minds of founders of those companies and say what they were thinking, the problems they chose to solve had enormous relevance and potential at their time and place.

When some people talk of building product companies, they want to build another “Facebook”, another “Google”, etc. And some people want to build “Valley” here in Bangalore or Hyderabad. If all we’re doing is trying to build another “Google”, replicate ecosystem of “Silicon Valley” here in an Indian city, sorry people. Your attempts are futile. Suppose we go to Kashmir, and like apples very much there. We come back to Karnataka, want to grow apples. Can we grow apples here? No. Climate, and soil conditions in Karnataka is different from that of Kashmir. If we are still trying to grow apples in Karnataka, we’re just wasting our time and effort. But Karnataka grows sandalwood. This is a tree that grows here very well. And we can grow best Sandalwood in the world.

Don’t mistake the analogy here. I’m in no way suggesting that Indians can’t build a technological giant such as Google or Facebook. What I mean is, we should not build product companies for the sake of it. If you can solve a problem really well without building a product, and build a great business out of it, that should be the way. When we’re building a company or building ecosystems, we’ve to encourage startups to be best in what they are building or doing. It doesn’t really matter after a point if you are building a product or offering a service, what matters is quality of your work. It should solve real problems of the people. In doing so, it only makes sense to utilize existing ingredients of ecosystem to the fullest.

What we should aim at is building a culture of solving problems and solving efficiently. To solve a big tough problem, if we’ve have to build a product for that, we’ll build a product. If we’ve to invent, we’ll invent. If we have to offer an innovative service, we’ll do that. Once we start solving big problems, once we start setting standards of excellence in everything we do, may be we’ll realize product companies are by-products.

Guest Post Contributed by Mahesha Hiremath, Boson Research

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10 No-Brainer Marketing Lessons for Nerds

Marketing a product is always tricky business. Step into a marketing discussion and it invariably ends with, “Should we really be spending so much on marketing? Isn’t there a better (read: cheaper) way to do this?” Now observe the marketing head honcho whose responsibility it is to get the product into the hands of users. He or she will scrunch the shoulders into a compact shape, ready for the tackle. You instinctively know the two tactics that will be used: First, he or she is going to talk about the need the company has to get its brand under the nose of users and next parade the marketing figures of successful competitors in the hope that reluctant bean counters will write the marketing cheque from sheer fright.

I don’t know if you noticed, but the head honcho just used the two key tenets of marketing we can all learn from:

You can market something only when there is a need. Figure out why someone needs something. Then fill the gap.

There are lessons in what others have done. First observe; if necessary, follow.

These are seemingly simple – and obvious – guidelines for successful marketing. But over the years I’ve noticed that techies make several marketing mistakes that can be easily avoided. These should serve you well if you are planning to release a software product for the first time:

  1. Don’t sell anything that is half baked: If you think the product is not ready, don’t waste time and money marketing it. Good marketing can’t fix a bad product.
  2. Don’t sell anything that the customer doesn’t need: Stop trying to convince others that your product has more features than competition. Focus instead on how your product meets customer needs better.
  3. Don’t blitz the customer with jargon: Chances are that the person about to buy your product doesn’t understand a word of technology. Would you buy a product you don’t understand? The same applies to your customer.
  4. Don’t believe you are the product’s ideal user: Often, a product begins by trying to solve a problem its user experienced. Over a period of time, this leads to the mistaken impression that the developer is the best use case. Remember, you are not trying to sell to yourself.
  5. Don’t bulldoze the customer with information: Don’t think a thick brochure or a 60-minute slide presentation that explains everything about your product can sell better than a sentence or a paragraph. You know that no one has time (otherwise, why would Twitter be such a killer of an idea?). Now make your marketing strategy understand that.
  6. Don’t spend marketing rupees without a sales process: This is a problem typical of start-ups. You may go and spend on fancy collateral, online media, cute videos, a stunning website, mobile marketing and discover you have customers but no sales process in place. By the time you wake up, the customer is gone.
  7. Don’t sell to customers who don’t have the budgets (or think of innovative business models for them): You can sell, but only if your customer has the budget to buy your product. In really crude words, target your customer better. If your customer doesn’t have the budget think of innovative business models that can co-opt the customer (outcome oriented pricing, co-ownership, pay-as-you-go, rental, profit sharing, etc).
  8. Don’t believe that marketing is maths: Just because you can measure some metrics doesn’t mean you can completely manage marketing by applying a couple of formulas. You can bet Steve Jobs did not have a metric to measure his ability to market Apple products. So, use instinct, see what works for you. On the other hand, don’t ignore the story marketing metrics are telling you!
  9. Don’t ignore the mistakes: Even a company like Google has seen hundreds of failures. Remember Google X? It was a version of a Google home page launched in 2005 that was made to look like a Mac OS interface. The bottom of the page said, “Roses are red. Violets are blue. OS X rocks. Homage to you.” Google removed it within a day of launch. Can’t imagine Google wanting to do anything with Apple today, can you?
  10. Don’t slash prices: The idea of marketing is to sell and make profit, right? So why hurt yourself by slashing prices? Instead, keep pricing realistic and competitive (unless you hold a monopoly in the market, in which case, why would you be wasting your time reading this?). With right-pricing, your customers will know you are in the market competing with your product, not with a price tag.