Unmetric.com – Crashing New Frontiers in Social Media Marketing

If you are a startup or a would-be entrepreneur or just an interested reader, then is there something you can learn from Unmetric? We try to bring you learnings as well as what we see as something special or inspiring.  The Learnings themselves are not earth shattering – it’s probably an affirmation of what works – what is special is the environment in which it has been done and the people that did it.  Please read on in our series on “Product and Technology Startups – Made in India”.

With the likes of Toyota, Cadillac, Subway, Micromax, ITC Hotels Group, and Under Armouron their customer list, Unmetric truly has a track record that shows a lot of promise and is an inspiration for start ups from India.

When we interacted with Lakshmanan Narayan (who many know as ‘Lux’) the co-founder of Unmetric, he spoke at the speed of a train and we had a hard time keeping up with his excitement and passion.  But what came out was a fascinating story of a start up that has provided value in the space of Social Media Marketing.  The Unmetric team have analyzed, reviewed and reported on the online brand presence of dozens of industry sectors and in the process, covered brands like Walmart, Heineken, Progressive, Nivea, Dove, Intel, Axe – all international brands, just to name a few.  Unmetric truly has a track record that shows a lot of promise.


Learning #1 – Creating The Right Value Proposition

Creating ‘The Right Value Proposition’ is the most basic part of any start-up – to be able to identify the right niches and to articulate a service offering that your customers and your organization can identify with.  Unmetric has gone a step further, and has created multiple levels of its value proposition.  For social media this ranges from industry benchmarks, to helping create a social media strategy to being informed of when a competitor video is going viral.

Unmetric’s ‘Software as a Service’ product is valued by its customers for providing a range of services from implementation to strategy.

Unmetric Services

To understand what Unmetric’s services are, the following example was given to us–

Corporate Social Responsibility forms a big part of Chevrolet’s content strategy on Facebook. In the last month the company promoted its Purple Your Profile campaign with five updates to raise awareness for cancer patients.

Result for Chevrolet:  The CSR campaign was a big hit with its fans, the 5 posts were some of the most engaging content Chevrolet posted. It was the most engaging campaign in the auto sector and Chevrolet grew its fanbase faster than the sector average.

The above quote gives you a glimpse of what Unmetric does.  It tracks brands on various social networks such as Facebook.  It categorizes various brands into sectors based on the industry, consumer presence and nature of the product and it tracks content updates and fan following.  It tracks industry measures, such as, the ‘sector average’ mentioned above.  Unmetric’s algorithms filter and analyze content quickly from multiple social media platforms so that enterprises can make sense of all the noise and cut to the information that really matters.

Unmetric Services include the following:

Campaign Intelligence:Unmetric provides deep intelligence on social media campaigns.It has the ability to track, collect data on and analyze specific social media campaigns that a customer or their competition may run.  The data collection can happen across multiple channels, such as, Facebook, YouTube, Pinterest, Twitter, to name a few.Analysis is down to a specific video or online campaign – if a competitor video is going viral or a brand is doing something exceptional and getting unusually high engagement scores then Unmetric lets you know.

Content Intelligence:Unmetric enables you to mine the content strategies that work. This means, knowing which demographics are being targeted by various brands that matter to you, which topics are hot and getting greater engagement scores, what video lengths are typical, among many others.  This helps brands figure out what content strategies to adopt and to quickly respond to audience reaction.  The days of creating a newspaper or television campaign that changed every 3 to 6 months are long gone.  Social media campaigns may need to change every week if not every day depending on the sector that a customer works in and the demographics of its audiences.

social mediaUnmetric’s work is made more challenging as the ground it is working on is evolving.  It has to find answers to many questions –  how does one define ‘engagement scores’, is it accepted by the industry, will it change over time, can it be used as a basis of comparing organizations and sectors, are there regulatory concerns, etc.

Sector Benchmarks:As part of this service Unmetric helps customers benchmark their social media performance in terms of Growth, Engagement, Customer Service, and Frequency.  It enables organizations to see where they stand against competition or against brands selected by them.Unmetric claims to have developed the ‘first ever sector aware social media benchmark score’ with over variousqualitative and quantitative metrics to rank brands against their competition.

Why is the Social Media Space Important?

This question of importance seems academic, given the extent and usage of social media.  However, from an Enterprise budget and marketing spend perspective it still pales with respect to television, print media and other spends.  Traditional media organizations have measures for TRPs, advertising reach, spend on television ads, banners in stadiums, etc..Social media measures are at best evolving.  However, this space is attracting a tremendous amount of interest from a number of different types of organizations.

The first is obviously the corporates or the brands that are in a constant race to establish themselves on social media.  But equally important are organizations that are trying to build their social media marketing expertise.Large existing organizations, such as, Nielsens, GFK, Ipsos, etc. have social media marketing as a clear part of their offerings now and are building it up.  So are large and small advertising agencies thathave also entered this space as it is their bread and butter.

But the big game changer is the way this space is getting eyed by the large technology companies.  Adobe, Salesforce, Oracle have all acquired fairly substantial sized companies in the last couple of years.  Wildfire Interactive, Buddy Media, Vitrue, Radian6 are just a few that were acquired by big software companies.  Additionally, by their very nature, LinkedIn, Facebook, Tumblr, Twitter have acquired companies in this space in the last two years.

All of this validatesthe belief the cofounders had in Unmetric.  But they didn’t quite start with this idea.

The Competition only Listens but with Unmetric – ‘I See You’

For those of you who have seen the movie Avatar, the theme song is “I See You”.  The Na’vi have two versions of the verb “see” and it means to see the physical and beyond.  To “understand” or “comprehend”, to see in a spiritual sense with an open mind and heart and see as if encountering it for the very first time.

Unmetric claims their competition is more in to “Listening” and “Engaging” with the community while Unmetric is able to “comprehend”, “understand” and “See” in to the heart of multiple brands and sectors in Social Media.  The way Unmetric does this is to use a combination of computer algorithms along with human intelligence.  Unmetric has experts that examine information to categorize it in the right way.  Unmetric’s roadmap for the future focuses on this in a big way.

To understand this better, consider the example that Unmetric provided of what Under Armour does:  “In 2013, Under Armour ran a campaign that launched a new line of clothing with super hero emblemsemblazoned on them to capitalize on the buzz surrounding various Marvel films that were being released. The clothing company posted 6 updates in March and May on their Facebook page to promote this new product line.

Result:  The campaign was more than twice as engaging compared to any other campaign by Under Armour in 2013 and the posts received more shares than many other campaigns that had far more posts. The campaign was so successful, it was reintroduced as a cross channel campaign from August to December with the hashtag #UAAlterEgo during which time Under Armour saw higher fan and follower growth.

Unmetric’s algorithms filter and parse every word and phrase on social media to identify trending topics and allow brands to capitalize on relevant conversations.”

Learning #2 – Listen to the Market and understand its needs

Unmetric’scofounders listened to the market to understand its needs and were willing to change and adapt.  That is how they completely changed their strategy to what it is today – they started by focusing on Restaurants, Pubs and Spas and then changed course to target Enterprises.

Unmetric – Early Days

The journey from Restaurants, Pubs and Spas to now focusing on Enterprise shows the team’s entrepreneurial spirit and flexibility to adapt.  This is a key lesson for ANY startup.

Unmetric’s early days were that of a typical start up – self funded, one founder developing his ideas with a lot of spark and no small measure of gumption. Lakshmanan(Lux) had the initial ideafor what would become Unmetric, while at a previous start-up, Vembu Technologies.  However, the nature of the business of Vembu and that of social media marketing were culturally very different and Lux realized that if he was going to make any real progress he was going to have to strike out on his own. With the support and blessings from his friends at Vembu, he started with a team of 1 developer, 1 user experience designer and 1 analyst in Feb 2010.

Eyesandfeet.com was launched later that year and focused on helping SMB customers (Restaurants, Pubs and Spas) see what their competitors were doing on Social Media and helping them actually take action to drive ‘feet’ into their establishments.  The product was launched in Oct 2010 with Lux spendingtime in New York talking to restaurant owners.  He realized that the restaurant and pub owners could hardly take out time to talk to him, as they were harried by their operations, customers and logistics.  Even when people gave him time, it was as likely that they would not show up.  It was a depressing thought that SMBs were not going to beat a path to their (Eyesandfeet.com) door.

By now, Lux had been talking to multiple other parties – credit card companies, potential investors, some enterprises and there was a lot of feedback that Enterprises needed this information, it was a crying need and they were willing to pay for it.

Lux’s co-founders Kumar Krishnasami and Joseph Varghese came on board by end 2010.  They were ex-college mates from IIT-Madras and knew each other since 1989– a strong team with a lot of mutual respect and trust.  The co-founders had just joined and the team decided to do a pivot … the business they had signed up for, now had a completely new direction.  It would focus on Enterprises.  A close knit founding team with mutual trust and respect goes a long way in making such a major direction change successful.

A close knit founding team with mutual trust and respect goes a long way in making such a major direction change successful.

The team still didn’t have an office and remained frugal with their expenses.  They worked out of their respective homes, the founders wrote code themselves, ‘did windows’ and launched their website (Unmetric) in Aug 2011.

2012 was marked by getting a Series A round from Nexus Venture Partners.  2012 was also when Unmetric focused on Indian customers and started with pilots with brands like Makemytrip, Airtel, and Citibank.  2012 also saw this team move into its new office and the focus switched to marketing and sales in the US.  Lux started spending every other month in the US.

When the pivot happened from Eyesandfeet.com to Unmetric.com, Lux and his co-founders decided to do it the right way.  Every piece of their service and their product was built not in a lab, but in conversations with advertizing and marketing experts.  Every product wireframe was shown to potential customers or experts.  The end of 2012 to mid-2013 saw a steady increase in customers.  Mid-2013 also saw Unmetric.com close a Series B funding with Jaffco and participation from Nexus Venture Partners and a more permanent move to the US.

As 2014 starts, Unmetric has an organization with 80 plus customers – mostly in the Enterprise space.  50% of these are Brands and another 50% are agencies. Names, such as, CISCO, Toyota, Cadillac, Subway, Aircel and Axis Bank figure on their customer list.

Learning #3 Marketing as a key focus area

Lux and his team have put a lot of focus on marketing from day 1.  Marketing is not an afterthought and requires huge emphasis from the start.  He believes that most organizations start with trying to get their product right and then work on marketing.

Learning #4 Building High Caliber teams

Lux Narayan, Joseph Varghese and Kumar Krishnasami are all from IIT, Madras.  But that is just the beginning of their team.  They have gone to great lengths to hire the best from anywhere in the world and built a collaborative, high performance team.  It really doesn’t matter where the people are – much easier said than done.

Orthogonal Hiring

Lux calls it Orthogonal Hiring – what it means is not necessarily hiring people for their work experience but being able to identify people from alternate verticals who may have the capability to be outstanding in a role that Unmetric needs.

Lux took great pains to hire the right people.  He met his Director Sales – APAC Region in a PTA meeting where he realized that she could sell anything to anyone.  Before Lux hired his head of Content Management, Peter Claridge, (and had him relocate from England to India) he took the trouble to read all of his blog posts.  Peter had not done such a role earlier but Lux found a tone of voice that he wanted for the company.  Lux went to great effort to get through 125 CVs (after shortlisting) in order to pick Rick Liebling, his Head of Marketing. Jay Rampuria, the Head of Sales, and someone with years of experience at Nielsen and other companies, had to be convinced that Unmetric was a better bet than some leading social networksand agency holding companies wooing him at the time.

Family has also been taken in with Unmetric, its people and its potential – with Lux’s wife, an accomplished ex-banker and technology product executive (and classmate from IIM Calcutta)having jumped in to lead Finance and HR, and his cousin, someone who has been with the company since the very first Eyes And Feet days, choosing to take charge of Unmetric’s Operations and Client Relations over more lucrative and mainstream offers that came his way.

Of course, getting the right set of co-founders that had competence and trust amongst them goes a long way.  A month after the co-founders joined in early 2011 the business did a “pivot” – the entire business changed direction.

But a high performance team is not just your employees; it is also your partners and third party organizations that you work with.  An excellent example is how Unmetric creates best in class content.

Content Marketing is at the heart of Unmetric’s reach to companies around the world.  Peter Claridge, with a team of 5 in Chennai produces up to 30 pieces of content every month.  But the team is not just in Chennai, it’s a truly international team leveraging strengths from around the world.

The story gets prepared in Chennai, the creative infographics are produced by a designer in Spain, the PR company that packages it is based in San Francisco and it may get published in media based on the East Coast of US, e.g., in the Wall Street Journal Blogs.  The content itself is relevant to local events globally – NBA statistics, Thanksgiving Day, Valentines Day, etc..  This is then followed up by sales people based in Chicago or New York with the brands that may have figured in the content.

Learning #5 – UI Design, UI Design, UI Design

Product Start ups MUST ensure that their UI is best in class.  Start ups from India usually work on UI as an afterthought, whereas Unmetric worked this into their Product and organization strategy from Day 1.

nbastudentsLux Narayan says “Even at a time when we were bootstrapping the company, we paid top dollar (rupee) to ensure that we had a top class UI designer from Day 1.  … Interestingly, that amazingly talented designer who was freelancing with us is now a full-time member of the team, having chosen Unmetric over many other amazing companies that tried to hire him.”

A “thinking designer” is key and this manifests itself in many ways in Unmetric’s user experience. In fact, a focus on design is also visible in all external facing content from Unmetric – be it their reports or their website or their blogs.  Some samples are included below.

Last but Not Least

Learning #6 – Role of founder(s) in a successful start up

There is often a debate on what role a founder (or founders) plays in a successful start up.  Should he be an astute investor, a great engineer, a marketing whiz, a visionary, or an operations person.  Irrespective of who wins that debate it cannot be denied that this small group of founders creates and sustains the standard for excellence, the customer focus, the courage, the financial decision making, the cultural tone, etc. that form the ethos of success.

There is no doubt that Unmetric is a team effort of experts, now based in many parts of the world.  But behind it is the mind, heart and passion of Lux who has pursued an idea, listened to customers, changed course, got together diverse people that can work and deliver as a team, created operational excellence, focused on marketing and much more – no small feat.

For entrepreneurs in the making who are looking to start up a business… it is critical to see the capability of your founding team to see if you have the right mix and capability, skill and gumption to take your start up all the way.


Last but not least, we would like to acknowledge the openness and speed with which Lux, with the help of Peter, has shared Unmetric’s business ideas and thoughts for the rest of the Start Up community.  They have a lot of interesting challenges ahead and we wish them the very best for 2014.


India as a Product Nation is in good hands – Insights from the Lean Sales Roundtable

The fate of the future of India as a product nation is in the hands of 20 somethings and 30 somethings.  Whether it is sheer luck or sheer brilliance or sheet hard work, or all three I don’t know, but what I do know is that the future of India as a product nation is in good hands.

I attended a Lean Sales Playbook for about 3 and a half hours.  I had no idea how the time flew as  Pallav Nadhani (fusioncharts.com), Varun Shoor (kayako.com), Paras Chopra (wingify.com) shared from their companies’ experiences.  The attendees got a great insight from these three founders on how to make sales and marketing efforts pay.  Every talk was littered with “what works and gets customers in the door” versus just some sales and marketing theory.

The team intensely discussed generating MQL, SQLs, role of marketing, role of sales, organization setup, hiring, compensation, etc..

The insights below are from Pallav, Varun and Paras – however, for purposes of confidentiality it does not state which company has done what specifically.  The below insights could have worked at one or multiple of these start up organization:


  • The founder is the first sales person
  • “Founders must obsess about things that they want their teams to obsess about”.  One of the founders believes in Content Marketing and has written 180 articles himself.  Another founder is a strong believer in leading sales, and the third in building quality software himself.

Getting your first few customers

  • “Marketing is about finding channels that give volumes / returns relative to cost of the channel.”
  • What worked for initial sales was to work on “influencers”.  Identifying experts on various in-depth forums and working on them as initial customers.
  • Product is not different from “sales”.  The problem of sales comes only when the products’ value is not known – when the team doesn’t even know if the product should exist or not on this planet.  Do customers really require it?


Managing the Sales Funnel

  • The start-ups give a lot of focus to containing “churn”.
  • Converting site hits is monitored in a very rigorous manner by all founders.
  • Once the free trial starts, the impression formed in the first 2 minutes is critical.  Customers should not get a whole lot of options.  Its  a minimal set of 1 or 2 options so that making decisions on how to proceed is a no-brainer.
  • Its difficult for the customer to give large commitment at once – so try to get their commitment in small steps … and then get them truly engaged with the product.
  • Sales and trial requests are managed rigorously.  There are both automated and manual communications that go to potential customers.


  • The marketing team has used among other initiatives –   SEO, Content Marketing and word of mouth.  Content Marketing has been used very effectively.  The articles have to be well written and the product has to be pitched subtly so that its value is understood and appreciated.
  • For SaaS software, the sales person is more of a “sales enabler” rather than an outright “sales” person.  Marketing and the Product do most of the work.  “Sales enablers” need to describe product features and not really sell.
  • One of the organization’s target market is the CMO organization, even though the person reached most times is an executive or a manager in that organization.  A lot of importance is given to reaching the users who will actually use the products – and not just the IT organization.
  • Drip marketing is also used effectively.  Information of a customer is collected in many ways.  E.g., you don’t ask the customer which industry they are from, but collect information on which demos they want to see and try to figure out the industry.
  • Offline conferences are more expensive.  One of these startups went for it only in their 7th year.

Building a Brand

  • Building trust and credibility with customers is crucial.  Its critical to have a website that speaks in the language of target customers (in the US and in UK).  Websites targeted at Indian customers and those targeted at US customers can be very different.  A lot of time is spent in identifying these differences and ensuring the website is culturally accurate.
  • All success stories are tracked and converted to case studies.  Potential customers are able to view success stories that are relevant to them and are from their industry.
  • Ensuring top class support, ensures that the brand continues to grow and strengthen.
  • Execution Excellence builds a brand.  Even though these are start ups, what really works for them is creation of internal Knowledge Banks.  EVERY mistake or gap a customer reports goes back into the Knowledge Bank and everyone gets trained.

Talent and Hiring

  • Ensure you are hiring good people, especially in Sales and Marketing.  When hiring at senior levels, e.g., a VP of Sales its important to know if he is working out or not right at the word start.  Taking 6 months to a year to figure out that he is “not working out” is a huge loss to a start up.
  • Get creative about hiring the talent needed.  One of these startups have used expats that have returned to India from various countries and do not want to leave their home state.    So, the recruitment team ensures that they hire Australian expats to support the Australia customers and UK expats to support the UK customers, etc.

It was enthralling to see the energy and wisdom in this young team.

Even as I left, a list of topics went up on the board.  Sales compensation was the top one and there were a few others.  Am sure the active discussion lasted for another couple of hours.

I left invigorated and excited.  Is there a way for these young, smart product companies and their founders to inspire and spawn a product culture in India?  Yes, I think there is and I for one am a believer.

8 Truths why IT Services Organizations cannot do Software Products

The bread and butter of the Indian IT Industry has been IT Services.  IT Services, as the terminology implies, is servicing a customer.  A customer states his needs, the IT Services organization makes a proposal to develop / maintain / re-engineer / etc., and the deal is done.  As offshoring and outsourcing has matured, customers have become savvy and are putting pressure on IT Services Organizations to compete more aggressively, provide more value and make cheaper proposals with no hidden costs to customers.

IT Services Organizations are in turn looking for ways to improve their margins by creating their own Intellectual Property (IP) and some of them have turned to building or investing in software products.

This articles core purpose is to warn leaders in IT Services Organizations – “DON’T BUILD SOFTWARE PRODUCTS”.  But success makes one arrogant, so I suspect some leaders will still build their own products, in which case hire somebody who has made these mistakes before and is familiar with the 8 Truths.

TRUTH 1: Trusting your best IT SERVICES Manager to build your Product

When an IT Services Organization decides to do Products, it is one of their significant investments and guess who they put in charge of it – one of their better managers.  A manager in an IT Services Organization is an expert at – scope management, cost management, SDLC, resource management, status reporting, financial management, etc.. And of course he is very good at managing other managers.

Building successful products has little to do with the above skills.  Building successful software products requires the ability to provide vision for the Product, ability to work with changing customer and market needs, the ability to build and trash architectures, deal with failures, inspire creativity, identify opportunities you had not seen before.

Most importantly, if you decide to build software Products please find a Software Product Head who has a couple of failures under his belt.  And if you find one that hasn’t yet failed, guess what – he will fail on your Software Product !!!

TRUTH 2 : IT SERVICES ORGANIZATIONS serve Customers and their Projects

The real expertise of a successful IT Services Organization is Scope Management – negotiating successfully with the customer on agreed scope and what is not in scope.  If you are the Program Manager and your team is on the wrong track or if you have made a mistake, you are taught to revisit the scope.  Examine the scope document with a fine toothcomb to compare what the customer asked for with what you have delivered.

If the customer says “The system is not easy to use” then examine the scope to say “Yes, but we did not agree on usability guidelines”, so if you now need “Usability”, it’s a change request and please Mr. Customer, do pay for it.

If the customer says “The system is too slow and it takes 45 seconds for my Employee Screen to come up” then examine the scope document for “Performance Requirements” and tell the customer “Oops !! Mr. Customer you seem to have missed defining Performance Requirements” and what you are asking for is a major redesign.  Guess who’s gonna shell out big bucks for it?!

Customer: “The database design is bad”.  IT Service: “That is not a deliverable as per scope”.

Customer: “The coding guidelines are poor”.  IT Services: “We follow our organization standard guidelines, if you need anything different it’s not in scope”.

… and so on.

Importantly, the cost of changes and mistakes is either borne by customers or at least shared by them.

In the Software Product world there is limited Customer defined scope and there is no fallback position to ask a customer to pay for mistakes.  If you have got it wrong, bad luck. Do it again and by the way do it better.  And please meet “implicit needs of the product” – customers implicitly expect a Software Product to load within 5 seconds and the usability to be impeccable and intuitive.

This is a culture shift for an IT Services Organization.


IT Services thinking:  If we got it wrong, lets change the manager, lets change the technical architect, lets change the Business Analyst.  Or better still … lets throw more people at it, lets change the location of development, lets get more funding.

How about just stopping and starting again.

IT Services Organizations just don’t know how to stop or setup metrics to stop.  IT Software Products have high failure rates – over 80%.  The IT Services Organization is used to 80% success rate.  It’s a another  culture shift.

This is also related to how Software Services Projects and Software Products are funded.  A Customer Services Project even if gone bad often continues to be a revenue earner, till the customer decides to stop development.  An investor in a Software Product organization often invests in multiple Product companies and has clear criteria to continue or stop.

In Software Products there is little room for carrying baggage and making incremental changes.  If you have got your product wrong, throw it away and restart or just stop.  Any kind of incremental changes cost a lot and makes the whole team slower.  Your technical team also knows they are building an elephant which will not be nimble, flexible, easy to change or responsive.  There is no greater demotivator than a technical team that doesn’t believe in the Product.

A Software Product is developing IP for the future – there will be peaks and troughs of investments and returns and these will typically be in separate time-cycles.  This is another reason, why an IT Services organization just doesn’t know when to say STOP.  They may well invest much more than a pure-play Software Product Organization would and that too for poorer returns.


IT Services Senior leadership is chosen for Customer Engagement skills, for P&L responsibility, and not for Product vision.

If you are in IT Services, when you resource for a Customer Services Project, you pull out your Gross Margin sheet and see what level of senior / junior people you are allowed.  You then go to your Resource Management team to help you fill those resources.  You could need a team of 20 or a team of 200, depending on the size and complexity.  And that is your focus.

When you develop a Software Product, you first review the market of the Product, then you review its features, then you validate it with some customers, then you do prototypes and proof of concepts, then you validate it again with customers.  You convince an anchor customer.  Your entire focus is on – are the features right, is my customer happy, is my software maintainable, will I get references to other customers?  Resources and budgets are just as important but features and benefits to customers come first.

When a Software Product organization scales the problems grow differently – what is the scope of my product, what are the analysts saying about it, how will my licensing model work for small and large customers, how will I support customers, what is their upgrade path,  are there core architectural bottlenecks that will prevent the software from scaling?

The priority for an IT Services Organization remains quality of service, size of business, revenue and margins as it should.  IT Services Organizations do not know how to build software any more.  They knew it once – now they have forgotten.

TRUTH 5: IT SERVICES ORGANIZATIONS’ HR works on scale and size.  They cannot focus on the problem of 1 Employee

The HR team of an IT Services organization has a very clear idea of where and how to recruit, what compensation to give, how to give raises, how to be fair across thousands of people.    There are employee benefits, training programs, career growth plans, dual shore movement, etc.

Product teams start by being small teams.  They often need expertise in small bursts – speed is everything.  An IT Services Organization just doesn’t have the flexibility and nimbleness to take care of the needs of a Product team.  Can I out price my 1 core architect and 2 functional experts?  Can I provide them with ESOP that is way beyond others on the services side?  Can a developer in the product space get paid more than a manager?

Can HR deal with the above?  More importantly does HR have the mandate to make such exceptions?  What happens when a Product person moves to a Services Project – how do the incentives work?

For a services organization with thousands of people – it is not significantly important to solve the problem of at most a few hundred people working on products.  For the Product Organization every decision MUST be driven towards getting a great piece of software to the end-customer.


A developer in a software Product organization is the go to person to solve any problem.  It is extremely unlikely that a Services Organization even knows their top developers.  Developers of Software Products may often get paid more, and maybe more relevant to a customer implementation than any manager.  I have seen situations where One Top Developer has by himself been able to solve a problem that 15 managers, technical leads and developers could not.

The best Product Organizations will identify and nurture these developers.  IT Services organization will struggle with salary bands, designations, bonuses, and the best ones will find workarounds to reward these developers.  But that’s just what it will be – a workaround at best.


Providing an IT Software Service to a customer and actually being the owner of the Software Product are very different perspectives.  When you own the Intellectual Property – here this refers to the Software Product; it comes with a different set of liabilities as well.

The questions an IT Services company may not ask – Did I leave a security hole in my software through negligence? My design is faulty and my code is badly written – did I disclose this to my customers?  If one customer is going to sue me for damages, does that mean all my customers will have to be informed? What if one of your developers has copied code that is Open Source – what are the implications? Etc. etc. etc.

Also, to develop IP, requires a certain amount of R&D (loosely used term here to indicate trial and error, waste and true R&D) – which algorithms will be most optimal? Which UI will be a hit with the customer?  Which features will be used the most?  And anyone who has been in R&D, knows that investment in R&D does not guarantee results and is often considered waste.  R&D needs an open mind and the results are often serendipitous.

Services organizations are experts at managing waste and reducing fat.  The Product organization actively produces waste and a CFO or an Accountant is often looking at the Product team (within the IT Services Organization) with itchy fingers to take that number off his xls sheet.  The Product team needs to experiment, to create and to throw away;  to improve things and hone it and make it better.  It is an idea generating machine that needs focus to create more value.  It is just such a throwaway piece that a product may need to make it standout, to break through the clutter and the noise in its space.

Related to IP is also a host of copyright, trademark and patents related issues.  The IT Services Organization needs to come up to speed with all of this if it is to create software products.  The last thing you need is for your Product to be successful and then to discover that someone else is using the same name or you have been slapped with a copyright infringement.

IP is the differentiator that can make your Software Product successful.


IT SERVICES ORGANIZATIONS are all about growth through replication of success.  The growth mantra for this replication of success is to scale through resources, infrastructure, deployment on projects, managing bench, engaging with customers, building competencies, delivering software projects successfully time after time after time.  There is also a huge push on sales and winning large deals.

An IT Services business is also conservative by nature.  Due to its maturity, it is also a predictable business model.  Investments are made in people after knowing the size of Customer Projects that will be won. You assign resources on a won Project and then remove them when the Project is over.  When you don’t win the projected business and have a large number of unutilized resources (bench) you either cut salary or you ask people to leave after a certain amount of idle time.

In a Software Product Organization, at the first level, the Product should be able to talk for itself.  The word of mouth is critical.  For Example, for an internet product to grow, the problem is eyeballs and retention of the end customer on your internet site.  The primary focus is not on growing the number of people you have to hire and train.  In Services deals you may lose out if you are unable to show the customer your ability to scale up and get office space, people, training, rebadging, infrastructure, etc. on time.  In Product you will need to do a flawless job of your product implementation and ensuring your product Roadmap is road worthy.   You grow through better products, with backward compatibility, with presence on mobile, with analytics – and many other features around the product along with a science to replicate deployment methodologies and customer trainings.

Both IT Services Organization and Product Organizations scale and grow in very different ways.  An IT Services Organization doesn’t have the DNA for software products.  So, if a Services Organization chooses to go for Software Products be prepared for some gene level surgery.

TRUTH 8: IT SERVICES ORGANIZATIONS are not experts in their Customers’ Business

IT Services have today moved away from being just technology companies.  A website of an IT Services organization shows you industry verticals and domain solutions.  Full credit to IT Services companies for providing such exemplary service to its customers.  However, the customer still doesn’t expect the IT Services organization to know its business better than itself.

IT Services Organizations have honed Customer Service to a fine art.  There are processes and sub-processes to be followed.  You have frameworks like ITIL that continually reduce cost of maintenance and support.  The focus is on reducing cost of Business As Usual (BAU) activities.

With a Software Product it is different.  In the domain of a particular Software Product, customers expect you to know everything.  You are expected to know the domain, the technology, competing products, integration with other systems, mapping to business processes, etc.  You are expected to know how the beginner users and how the expert users will use and misuse your product.

All Customer Service comes from the knowledge of the customers’ business scenarios and not from a support management framework.  The ability to anticipate a customers’ problems and to be able to demonstrate thought leadership are critical to the success of a Product Organization.


If you are an IT Services Organization the biggest mistake you can make is to think that a Software Product is just another piece of software, which it is.  But that is not ALL what it is.  It is a completely new business.  So be prepared to reinvent that part of your team or else …