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A Recipe for Selling a Product Globally from India

iSPIRT regularly organises Playbook roundtables to help startups succeed by learning from successful entrepreneurs. One of such roundtable was conducted at GS Lab in Pune on 10th Oct 2015.

This PlaybookRT was focused on Product startups (B2B) who are keen to sell to the global market. The PlaybookRT was facilitated by Samir Palnitkar, President of ShopSocially.com. Samir hosted a highly interactive Playbook Roundtable for Product Startups and shared his journey of building ShopSocially globally.

Being a serial entrepreneur with over 20 years of industry experience, Samir’s passion is startups and new ideas. He is a founder of four successful startups which include I2P acquired by Lattice), Obongo (acquired by America Online), Ingot Systems (acquired by Synopsys) and AirTight Networks (category leader in secure, cloud WiFi). He is also an active early stage investor and advisor. His expertise includes social media, strategy, productization/execution, and business process setup.

Samir has authored two highly acclaimed books and he also holds 5 US patents.

In this highly intensive session, attended by over 12 Pune-based startups, Samir shared his insights on the strategies, techniques, team and the infrastructure required to sell a product effectively from India.

I was one of the attendees who were immensely benefited from this workshop. Here is a brief summary of the topics that we discussed.

Most of the early stage startups face following challenges:

  • How do we find customers?
  • How do we reach them?
  • Should I build a team abroad?
  • How much money do I need to a sales team abroad?

Samir not only shared how he solved this challenges but he also provided some actionable steps that can help to build a sustainable sales process.

Sales Process

Most organisations look at marketing and sales as two different departments, and most often there is little or no communication between these two. Samir strongly suggested to integrate these functions closely with each other for optimum results.

Since startups have tight budget, they tend to rely more on inbound marketing to generate the leads. Samir suggested to have a right mix of inbound & outbound marketing.

This is how it works at ShopSocially – Marketing team generates the leads through various channels, these leads and then filtered and after qualification, passed on the experienced Sales Executives who conduct a demo and close the deal. Finally, Customer Success team nurtures the clients and ensures minimum churn. Sales-Process

List Building

Samir shared some innovative ways to build the list of potential prospects. First step of building a list is to create buyer personas. We must know who is our target customer, which industry he belongs to?, what’s his title?, what’s his geographical location? how much is the revenue?, etc.

Once we identify the attributes of our potential customer, we can start hunting for the contacts. Sites like BuiltWith, Hoovers and Data.com can help you find the right fit based on the criteria you mention. Even if you get the website of the company, you can find out the contact details of your potential prospect. If you are short on time, you can outsource this activity and get someone to do it for you.

Key here is to find ways to consistently build the list and nurture it.   

Email Marketing Flow

Now, once we have our list in place, we need to contact them. It may sound like an easy thing to do but most companies get it wrong and end up spamming the email list.

Here are some of the tips –

  • Use text instead of large images in the email as most email clients block images.
  • Keep it short and to the point. Best to have maximum of 5 sentences.
  • Use only one link
  • Message should appear as a personal note rather than a marketing text
  • Send the email from an individual account instead of a generic email ID.

There are few bulk email software’s that can help you send automated emails at a predefined internal. For example, you can send 2nd mail automatically after 15 days and so on. With these tools, you can create an automated email marketing flow and send emails based on user behaviour.

Cold Calling Flow

So we have built the list and sent the emails. Now what? Should we start calling all of them now? Definitely not!

Cold calling random contacts does not help anymore. Once we send the first mail, we need to monitor the email opens, clicks and most importantly replies. If any of this action occurs, sales team should immediately call the contact.

This way the response rate will be much higher as client will be aware of the product and its offering.

Important things to keep in mind while making calls:

  • Create a short and precise calling script
  • Practice the script multiple times by doing mock calls
  • Track the response in a good CRM software

Setup A Meeting

Samir advised not to try selling your product during the first call itself. During this call, we should qualify the lead and setup a meeting to showcase the product. Depending on the product, it could be an online demo or an in-person meeting. This will be handled by a more experienced executive as discussed above.

Simplest way to setup a meeting is to use Google Calendar. You can quickly get the lead to accept the meeting after that call. Details of the meeting can be updated later.

Follow up & Closer

Once the meeting is over or demo is done, next step is to follow up. Based on the feedback you get from the meeting, you can setup a predefined follow up schedule.

Follow ups should be polite, non-intrusive and should not be spammy. You can share marketing collaterals like case studies, testimonials or webinar recording to make the decision making process simple.

Samir advised to create high quality marketing collaterals that have visual representation of your product. Once the prospect is in final stage of the funnel, you should aim for 10 to 30% closer rate. Focus should be on improving this close ratio.

Building A Right Team

To execute your plans, you need a good team. Based on the number of leads you can generate every month, reverse calculation can be done to estimate the number of resources you will need.

Samir suggested to use Linkedin and Employee Referrals to hire new employees. He strongly suggested to have mock sales calls with the candidate, no matter how experienced he is.

Its also important to design a good incentive plan to keep the sales executives motivated. Salary structure should have a fixed component and a variable commissioned component.

Tools & Infrastructure

In order to run the entire sales process smoothly, we must invest in a good infrastructure. Based on his years of experience, Samir recommended following tools:

  • Novanet for VOIP calling
  • Grandstream GXP-1400 – 2 line IP phones
  • Vonia headsets
  • Separate 2 Mbps Leased line for voice (for about 18 reps)
  • Separate Broadband Internet of 50 Mbps speed for data
  • Microtik Router to do traffic routing
  • Pardot software for email marketing
  • Suger CRM for lead tracking
  • ClearSlide for sharing presentations online

It was indeed a great learning experience for all the entrepreneurs who attended this PlaybookRT.

Guest Post by Harshal Katre founder at ProfitBooks – cloud accounting app designed for non-accountants. He loves everything about running a startup and often writes about it on the ProfitBooks blog.  

 

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SaaS is the new black – and it has found a place in Chennai

At SaaSx 2015, Girish Mathrubhootham, CEO of cloud-based customer support software Freshdesk and popularly known as the Rajnikanth (think an acting, singing James Bond) of India’s Software as a Service (SaaS) scene, did the unthinkable. He revealed the entire spreadsheet of internal data-based metrics that he presented to his investors in 2011. All the media people were asked to put away their weapons and, at first, I was a little disappointed that I wouldn’t be able to share any of those numbers. Soon, however, I realized that they weren’t even important.

After Girish’s investors took a look at his numbers – and, honestly, at the time, they were not all that impressive – they decided to email his clients with a feedback survey. The response was overwhelmingly positive, with 96 percent of Freshdesk’s customers expressing approval of the product. “We didn’t even expect that,” explains Girish. “The only other feedback we got was customers expressing their desire to see us expand our product into different areas.”

The fact that customers wanted to see Freshdesk expand was important for both the company and its investors. As its progress revealed, the most dynamic feature of a SaaS product is its ability to acquire and reacquire the same customers by offering insightful new features. And, while the transient nature of software products means that differentiation can be difficult to maintain, Girish went on to explain that capturing the market was all about moving in at the right time. “Of course, best practices are easily copied and hard to retain – that’s why I’m only revealing our numbers from 2011-2012,” he joked.

SaaSx 2015, held in Chennai, Tamil Nadu, the self-proclaimed SaaS capital of India, was full of similar insights. People visited from all over the country, the furthest having traveled over 800 miles from Ahmedabad. Those in India’s startup capital, Bangalore – this includes yours truly – traveled over 6 hours and 300 miles on a bus through the winding Western Ghats to reach its neighboring state of Tamil Nadu. Despite an early start, energy was high on the road to the conference – the 34 entrepreneurs on the Microsoft Ventures-organized bus managed to conduct an ice-breaking session without falling over during the turbulent bus ride.

“My biggest virtue as an entrepreneur was patience. And, my biggest mistake… it was probably patience,” quipped one young CEO.

Read more about the SaaS Leap of Faith, SaaS circles are all about community, a blog post contributed by Meghna Rao from TechInAsia

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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

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The importance of having a defined mission for your start-up

If you are a small team, starting out to solve a problem, having a mission is hardly a concern. What must concern you at that stage is getting to the product market fit and customer validation.

But even after building a successful product and scaling the business to a sizeable extent, many startups hardly articulate a compelling mission for themselves. With early signs of success, founders directly jump onto growing the team, building feature-sets and scale the organisation. Not very far in the journey, many startups end up facing employee attrition, lack of passion in teams and alignment issues in their organisation.

Founders of growth stage startups often mention retaining talent and alignment as a big area of concern; and end up applying many tactics to resolve talent-related problems. However, the cause of these issues is much more fundamental and intrinsic to the organisation.

Before your push the scale button and look outside to attract other people to your startup, the impact of your mission can’t be overstated. It is very important for the founding team to sit together and extract and articulate the mission for their business. A meaningful mission that matters to the world would instantly change how you look at yourselves and the business. The same regular job would inspire a lot more passion and a sense of pride in doing it. A well-articulated mission makes it easier for prospective team members, customers and investors to relate to your business, decisions and get similarly inspired.

Every problem worth solving is hiding within it a deeper challenge and glorious mission, which needs to be extracted with patience. For instance, the mission for a food delivery startup could be “Savings humans worldwide from the discontent out of hunger”.

Beyond inspiration, a mission opens up the avenues of long-term thinking and frames the canvas of opportunities, ideas and themes of innovations for the business to pursue.

Guest Post by Lalit Mangal, Co-Founder & CPO, CommonFloor

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Are you in India/SaaS, and not at #SaaSx2? You missed transparent mind-blowing insights

SaaSx event is a meetup organized by a bunch of SaaS entrepreneurs for all SaaS entrepreneurs in India. SaaSx Chennai event enables SaaS start-up founders to learn and share tribal knowledge from SaaS (software-as-a-service) start-ups in various stages of the evolutionary ladder.  Every participant registered for the event and was vetted for fitness with theme of the event. (Do events really have qualifying criteria for participants beyond collecting money?)

A good number of us going from Bangalore to Chennai climbed SaaSy bus early in the morning. For everyone who climbed the bus, our learning started in SaSSy bus from Bangalore to Chennai. Entrepreneurs got comfortable with each other quickly and most seem to be in the mind-set described by Yamini “Running a company becomes a lonely job after a point. Super excited to meet other co-founders”.

After crossing to Tamil Nadu, we had breakfast and climbed back to bus. This followed with ice-breaker session where everyone self-introduced themselves and shared 2 things that worked for them and 2 things that did not work for them. Sharing brought the journey to end in Chennai. Some attended private roundtables, followed by lunch, SaaSX2 event started. FireSide Chat was kick-started with Aneesh Reddy of Capillary Technologies on ““The Nuances of Enterprise SaaS” by Ahi and Asha Satapathy.

  • Lonely initial start-up days when it was not cool to work on start-ups. That was okay and they got time to work focused.
  • Shared their approach to balance developing a product and customization needs of customers, how they make decision whether to do customization or not and when to actually execute customization.
  • Shared the challenge to collect money from customers after delivering service and the approach they took to streamline the same. For delays with large enterprise customers, one needs to evaluate whether it makes sense to follow with customer for smaller payments.
  • Shared being lucky not to take hard calls of firing people in India. He thinks firing makes it very difficult to hire senior people at some point of time.

Asha made Aneesh to share personal life tips by asking his advice to young entrepreneur’s to find life partner, which Aneesh coolly as “If you are entrepreneur or plan to be one, marry daughter of business man. She would be able to relate to you as she is already used to relate to her father”. The Next FireSide Chat was started by Sumanth Raghavendra with the man who has mapped SaaS growth from seed funding to Series B and beyond. Yes, Girish Mathrubootham. Earlier he welcomed us sharing his inspiration from thalaivar (leader) Rajinikanth, Tamil film actor. For me, Girish story is very similar to Rajinikanth movies, film world made real in software world.

Girish set context of his learnings and insights might contradict with Aneesh by sharing the difference between order ticket sizes in their individual business. Some of insights shared were

  • Focus should not be just about features in product, but any user must get value in 20 minutes without help from anyone.
  • B2B SaaS is never a winner takes it all market. There will always be a set of 2 to 3 credible players.
  • Decision to spend $40K money earned through Microsoft Hackathon to explore different marketing channels and evaluate their effectiveness. Required courage to spend on marketing against conventional wisdom of boot-strapped start-up booking the money for other purposes.
  • When customer land on the website, product experience starts right at that moment. The customer needs to like what he sees and when he signs, he needs to get value out of the website. If customer ends up saying atleast a vow, there is more probability that the customer might spend time in the next 30 days evaluating your products.

In between sessions, I loved the concepts of #onething at conference where entrepreneurs are asked to share one thing as response to a quick round of questions. Here are few fresh in my mind.

      • #onething “Simplify and communicate “helped team to scale was awesome #communication among team members. The context was the presence of start-up team across multiple geographies.
      • #onething “Should we change focus from Minimal-Viable-Product (MVP) to Billable-Viable-Product(BVP) ?” No money flowing is opinion but cash on table is fact. The Value of BVP: After 30 days of trial, will we get revenue on day 31?
      • Today internet earnings are migrating from advertising to commerce. With more commerce happening, product information is core to the future of brands and market.
      • Choice of Cloud in 2008 enabled us to establish India ecosystem for health management /diagnostics technology products and created a whole new SMB market of SaaS offerings.

Dorai moderated Unconference session. The session started with narrowing down to 3 topics based on audience preference of topics. It just happened that first topic “Inside Sales for SaaS products” took most of the time. It was nice to see exchange of folks with challenges asking questions and folks who cracked challenges sharing their insights. It was nice to see Suresh and Girish stepping up to share their inputs for most of the questions. May be this is exactly how real knowledge sharing should happen.

iSPIRT continues its focus to encourage learning and sharing among entrepreneurs as support for their journeys and here is second event in 2015 to demonstrate their commitment. Here are my thoughts after the event

  • Each questions of entrepreneur’s comes from real world challenges. The answers are not in text book and the answers have to come from real world experiences and are not available in textbooks or class rooms.
  • Learning from SaaS start-ups is tight connected with the context where SaaS start-up operates. Without context of the start-up, insights are of little or no help to entrepreneurs, as learning of SaaS start-up in first context contradicts with the learning of SaaS start-up in second context.
  • No one tried to create good impression. All were open to share their mistakes and what they learnt in the rough way. Indirectly saying that “Failure is first step towards success”.

Here are #bigMistake heard from Bangalore entrepreneurs in #SaaSyBus

  • Sold to friends & thought we were good, product ended up weak. Should’ve sold to toughest customers 1st to make prod strong
  • Hired for start-up experience and skills. Should have hired for attitude and culture fit.
  • Build the product along with sales. First few paying large customer got pissed off and jumped away.
  • Following templates for success does not work. Need to find your own path and your own means to succeed.
  • Took a lot of money from investors and became complacent. Will bootstrap next time.
  • Build a product for a market that was 2small. Now moved to a bigger market and trying hard.
  • Corporate experiences and start-up life are poled apart. Do not worry about other, competitors.
  • Being too passionate when things get hot. Need to step back and take a hard dispassionate look and face reality.
  • Trying to hardsell. Now we just do demos, show the value, if they see the value they will buy.
  • Selling operational cost efficiencies in a fast market does not work.
  • Customer say wants, not need. Product roadmap cannot be based on customer inputs, must come from deep within.
  • Delaying product launch to polish it. Need to launch fast and get market feedback and face reality.

Guest Post by G. Srinivasan

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SaaSx2 rocked :-)

I have read about startup founders who don’t (or stopped) attend events – justifiably so. In ecosystems where there is now an entire industry of events springing up (i.e. it feels to me that some people’s startup in itself is all about organizing events), it becomes very difficult to separate the wheat from the shaft. Overall, value gets diluted in a bid to make profit. SaaSx2 is in its own class by all standards, hey, not because profit wasn’t the motive, but purely because of the value delivered. I couldn’t have asked for more.

Saasy

The journey to SaaSx2 started at the Microsoft Ventures office in Bangalore at around 5:16am. All roads lead to Chennai. For the first time, I decided to take a bus ride longer than 3 hours in India. I couldn’t look away from the opportunity to take a bus ride with fellow entrepreneurs. I thought it’ll be fun; and yeah, it was. To ensure we didn’t sleep, Prasanna of Microsoft Ventures made all of us do a quick introduction. All entrepreneurs got a chance to introduce themselves, their startup, why they launched, lessons learned so far and what they intend to learn at SaaSx2.IMG_20151007_160446

SaaSx2 exposed SaaS entrepreneurs to insights and strategies to capture several segments of the market. From targeting “Elephants” (i.e. big clients) to chasing “Rabbits” (small clients), SaaSx2 had all startups covered. You just have to pick the context that applies to you. From Aneesh’s (cofounder and CEO of Capillary Technologies) fire side chat to Girish’s (Founder and CEO of Freshdesk) session and then to Hiten Shah’s closing session, growth tips were just flying around everywhere in the hall. Badass all through. The panellists were real, the “one thing” sessions were direct and insightful. Emm, my secret admiration for the founder of FreshDesk, “Girish Mathrubootham” just rose to another level.

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In a buzz word dominating industry, it’s easy to get swamp in grammar instead of reality. So, instead of just using those fancy words like “disrupt”, “pivot”, “grow”, each of the panellists actually went deeply into how to do all of those. From sharing real numbers to walking us through the journey, they couldn’t have delivered more value than that.

At the unconference, entrepreneurs shared some of the issues they have and asked the audience for help. Talk about entrepreneurs seeking help from fellow entrepreneurs.

No sycophancy. No bullshitting. No flattery. SaaSx2 had a floorless execution and is an example of how startup events should be. iSpirt has raised the bar. Beat yourself if you didn’t attend. Rice, Soup Very Plenty (RSVP) – Did I mention that food and beer was all in surplus? Ah, emm, thanks to FreshDesk for the dinner.

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And thanks to the point man himself, the man who I think prefers to be at the background, Avinash Raghava :-).

Looking forward to SaaSx3.

Guest Post by Oluwatobi Soyombo, 1Plify. 

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The Freemium Business Model – What it is and how to make it work.

Summer’s here!

The sun, the vacations, the beach and last but not least, the lemonade stands.

Those little kiosks on the roadside and kids standing beside each of them with jars of cold lemonade, glasses, and inviting smiles.

So Joshua was among those 8-year-olds who had setup his own lemonade stand, for the first time.

The stand was set, the lemonades were ready, he was good to go.

Just then he realised something: there were about 5 lemonade stands in his neighborhood and all of them were the same. He wanted his stand to stand out.

And so he came up with a plan.

In his stand, people would get a plain lemonade for free. In addition to that he will offer around 5 other flavoured lemonades (watermelon or strawberry flavours, anyone?), which would come at a price of $1 a glass (to make up for the cost of giving free lemonades).

The result?

Joshua’s stand not only attracted more crowd, but also got him earning more than his friends.

Well, what we saw here was a small-scale version of what we call the “Freemium model”.

For those of you who need a concrete definition for this term, here goes:

“Give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc, then offer premium priced value added services or an enhanced version of your service to your customer base.” – Fred Wilson, VC

Basically the objective of this model is to get the users hooked to the free product, thereby motivating them to subscribe for the paid plan and also promote the product via word-of-mouth.

Chris Anderson in his book “Free” explains that Freemium works on the 5 Percent Rule – where 5% of premium customers support the remaining 95% of free users and also the cost of servicing the 95% is close to zero.

Companies like Evernote, Dropbox, Pandora, Linkedin, Skype, etc., are among the many Freemium success stories.

In fact, Mailchimp has reported a whopping 150% increase in paying customers and 650% increase in profit, within a year of going freemium.

The main plus-point of the Freemium model is that you can do away with the traditional sales-driven marketing strategy – the potential customers get to learn by themselves about the benefits of the product by trying it out, before even buying it (winning their mind share).

In addition to this, with the help of the data from your free users’ behaviours, you can easily find out what features of your product are/aren’t their favorites and which segments of the market are getting the most out of your product (cohort analyses will help).

A good example would be Box, which uses their Freemium model to identify potential upgrade customers, who are then contacted by the salespeople.

But just like any other business model, Freemium has also seen its fair share of failures and criticisms.

In 2006, Google Apps launched a feature for businesses, where they could customize their domains (@yourcompany.com). In 2012, the company announced that they’re taking away the free version and that businesses of all sizes must pay $50 per user per year (or signup for a flexible plan of $5 per user per month).

In one of our previous posts, we had discussed in detail about the various risks associated with a Freemium model for a SaaS business and what you can do to monetize the free users who don’t have an intention to upgrade.

CrazyEgg claims that their monthly revenue doubled once they dropped their free plan.

BUT, this was what Hiten Shah, its co-founder, had to say about the move:

“It was a short-term great decision for increasing revenue but I believe it was not the best decision for the long-term….If I’m starting a new SaaS business today, I would highly consider having a free plan that you invest resources in and plan on keeping forever.”

So what can you do to make your Freemium model a success, like how Joshua nailed it?

Firstly,  not all business models would suit all businesses alike and choosing the model that works right for you is crucial. The Freemium model is no exception to this rule.

A Freemium model would suit you, IF

  • You are positive that your lemonade is the best in the neighbourhood:

You have a high-quality free product which people would want to get their hands on (solves an immediate need/pain).

Also, you know that your long term Freemium users will eventually convert to paid users – which will only happen if the users derive sufficient value from your free product.

  • You’re certain that making 10 lemonades and 100 lemonades would cost you almost the same:

The cost of duplicating and distributing your free product is close to negligible.

The basic economics behind this model is that with the advent of SaaS (multi-tenancy), the marginal cost of distributing a software product among a 100 or a 100,000 is nominal.

  • Your customers know what a lemonade is, how to consume it and how it quenches their thirst:

The features of your free product are simple enough for the customers to educate themselves about and they don’t need hands-on training or support from your side (remember, keeping the cost as minimal as possible is the key).

Any business that involves high customer acquisition or customer service costs is not suitable for a Freemium model.

  • Your stand is in a busy street corner where there are a lot of passers-by – you’ve got enough people thirsty for your lemonade:

Your product will have a large reach and your potential market is huge.

As only a small percentage (1-4% on an average) of your free users would convert into paying customers, you need make that a small percentage of a large number to run a profitable business.

This also means that you have the sufficient infrastructure and operations to serve a mass market.

“The easiest way to get 1 million people paying is to get 1 billion people using.” – Phil Libin, CEO of Evernote

  • You know that people will keep coming back for more lemonade!

Your product promotes repeat usage (increases the stickiness). For example, Evernote’s smile graph. Or, it makes use of the network effect, i.e., the product becomes more beneficial as more people use it (e.g. GitHub).

Evernote’s Smile Graph

Image Source: http://www.inc.com/magazine/201112/evernote-2011-company-of-the-year.html

You must also look at ways of increasing your switching cost. One way could be enhancing the usability of the product, so that the users make use of more features, add more data, and get more value over time.

Because the user commitment drastically reduces when the customers use a product for free, you need to look at other ways to increase commitment.

  • People would love free lemonades, but not free babysitting!

Your product falls into a category where the customers would be happy to get it for free.

For instance, you’ll be happy to use a free app for storing your photos, but not a free lasik surgery. Mission critical products that require extensive support upfront may not be suitable for this business model.

Chargebee itself would be a good example for this case. We experimented with a freemium model for 6 months and learnt some interesting lessons about the type of customers we were attracting and the ROI in terms of free to paid conversions. We eventually decided to grandfather-in the pricing for our existing customers and to discontinue the plan for our new customers.

That pretty much sums up the set of criteria that need to be satisfied to choose the Freemium model.

And if you replied “Yes!” for each of the above points, then read further.

Rob Walling, CEO of HitTail compares the Freemium model to a Samurai sword – “Unless you’re a master at using it, you can cut your arm off.”

Now that you’ve decided to pick up the Samurai sword, let’s look at the “right” ways of using this sword – a few aspects that you need to pay attention to, to make sure that you don’t cut yourselves.

  • No one’s gonna be interested in drinking water from a lemonade stand – even if it’s for free!

You need to find out the optimal balance in the features that you’re offering for free.

If the free features aren’t captivating enough, you simply won’t attract users. If the free features are in abundance, then there’s a good possibility for you to get the required traffic, but you will fall short in the conversion rate.

Also, if your users are getting converted to paid customers all together, it might even imply that your free product is not good enough – which again would be a concern.

You need to know where to draw the line.

  • Joshua chose ‘flavors’ as the segmentation parameter – what about you?

For starters, you could choose a single parameter to differentiate your free plan from the paid plan.

It must be the best possible representative of your product’s value and it must increase with usage, like file storage space and number of stored messages for HipChat.You must then decide on how much of the parameter is going to be for free – set the limits.

Once this is done, you can even think about further enriching your paid plan with a few other premium features – but remember to keep it uncomplicated and straightforward.

  • Who doesn’t want to try out interesting flavours in lemonades?

You need to have a clear upgrade path for the users. For example, Dropbox starts charging the users once they exhaust the free storage space – here the reasons to upgrade into a paid customer is clear to the user.

You must also clearly distinguish the free and the paid plans to help the users see the value in paying you more (to answer the “what’s in it for me?”), thus making it more compelling to upgrade.

  • Are your customers talking about your lemonade stand – is the news spreading?

You need to pay attention to the virality quotient of your product.

Are your free users liking your product? Yes.

Now how to make them spread the word?

You need to device proper referral programs and incentives to achieve that. Yesware, an email tracking tool, attributes its revenue margin to its referral program.

The baseline is this – Your free users SHOULD fall into one of these two categories:

1. Those who will convert into paid customers in due course (Asana allows about 29 people to use its services for free, beyond which it starts charging them)

(or)

2. Those who will help in acquiring more free/paid customers (Dropbox’s referral program)

If not, then it is time to rethink your strategy.

Conclusion:

Joshua’s goal was simple – to make his lemonade stand attractive and earn more than the other stands in his neighbourhood. And he made sure that his goal was met. If it hadn’t been met, he would’ve tried out yet another plan.

You must have a specific set of clear objectives of why you’re choosing the Freemium model – conversion rates, revenue, virality and ultimately your ROI and profitability.

If you’re not getting the expected results, then you might be doing something wrong.

For instance, Chris Anderson says that you must strive for a 10% conversion rate from free to paid.

If the rate falls below that, the cost of serving the freeloaders will make it difficult for you to make money. On the other hand, a rate more than that would signal that you’re offering too little in your free version, which might limit your reach.

Set yourself measurable goals in the long run and ultimately if your goals and your customers’ goals don’t coincide/align, you mustn’t hesitate to pivot. Like how Google did.

May be you need a different model to make your lemonade stand succeed.

Reblogged from ChargeBee, blogpost by Sadhana Balaji.

 

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UX and Design in India

I recently heard of the demise of renowned MP Ranjan. Though I’ve never met him, my friends and colleagues who are in design, speak highly of him. It’s amazing how much design as a field of study and profession has progressed. And I’ve been fortunate to have worked with a lot of smart and talented designers over the past few years. This was not the situation when I started in the tech industry.

While at Zoho (then AdventNet, circa 2002), few of us came together and felt it was important to focus on design (it used to be called Usability then). And many teams had designers who used to be called Usability Engineers. We even went on to setup a usability lab where we had the ability to share the big CRT monitor, have a user try out our product (usually someone from SysAdmin, remember: AdventNet was building enterprise network management products then) and be able to see how a user used specific screens in the product. Most of my friends in other tech companies back then hadn’t heard of or were familiar with usability engineers or what they do. The common question used to be

Are these the people who fix the font colour and bold/italic? Isn’t that graphic design?

When I was interviewing with Yahoo in 2004, the recruiter who forwarded my resume to Yahoo, saw “User Experience” mentioned in the resume, and suggested “Why don’t you write some programming languages like Java in the resume so that they’ll consider this? Why do you want to write things like user experience? How does it help?“. As irony would have it, I ended up getting hired by Yahoo, and joined the same day as @rutasraju who led the UX teams at Yahoo for quite a while 🙂.

By this time, few more companies were beginning to talk of User Experience, Design and even hiring for those positions. And when I moved to InMobi (then mKhoj, circa 2008), we hired UX designers quite early on, and the company continues to build the UX/Design team. It was a much more accepted and serious profession to be included, if you were building products for any kind of human!

In more recent times, design is a mainstay in any company building products. This may be achieved by hiring in-house or by outsourcing/contracting, but the fact remains that it plays at a high level of consciousness for any team starting a company or building a product. At Credibase, when we think of what to do for users, the conversations always start with

What is the proposition for the user, and what is the experience the user will undergo?

I think this is due to a nice and virtuous cycle: See classy products -> Want classy products -> Build classy products. And I think this is great for the ecosystem. From being an afterthought (fix the text and colour on the screens) to being a mainstay, design in India has certainly come a long way, all in 1.5 decades!

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Julia – The Future of Numerical Computing and Data Science

First things first, we are really excited to announce our first JuliaCon India at Bangalore on Oct 9th and 10th. Julia Computing has partnered with Hasgeek for this event. For details and for registration, please visit http://www.juliacon.in/2015.

JuliaConJulia is the future of data science and analytics. Julia is open source, and its research and development have been anchored at MIT since 2009. Julia can easily be orders of magnitude faster than comparable solutions in interpreted dynamic languages such as R and Python, and is almost as fast as C (see http://julialang.org/benchmarks/). This makes it possible to deploy Julia in production.

Valentine’s day of 2012 was a special day for Julia. Our Why Julia blog post went viral and the Julia website has since been visited by over a million people. Today, Julia is a vibrant community with over 400 contributors. Over 700 packages are available in Julia today, in addition to the thousands of other open source packages in R and Python that can also be called from Julia.

Based on hundreds of discussions with CXO level leaders worldwide over the last 12 months or so, we now have deep insights into the nature of technical and business problems that enterprises are grappling with, and how Julia is already playing a key role in helping solve such problems.

Many companies depend on cutting edge computing technologies to create a market differentiator. Over the years, such companies would have developed in-house languages and/or databases or other technologies that they use to create their business solutions. Examples of such companies are large and small financial services firms on Wall Street, banks, investment banks, hedge funds and others who use such technologies in their trading platforms, asset management, risk management, portfolio management and other kinds of applications. Other examples of such firms are e-commerce companies that need pricing algorithms, search algorithms, and other compute intensive code that uses large amounts of data and complex algorithms. Such companies have either started looking at or started using Julia for their next generation platforms.

Similarly, CIOs’ offices in large enterprises in retail, distribution, telecom, manufacturing and many other verticals wrangle with high performance data analytics using their big data stacks. Julia is an ideal computational companion for such big data analytics applications.

CTOs’ organizations that undertake product design in engineering firms that are using tools in computer aided engineering, CAD, finite element analysis, computational fluid dynamics and other kinds of simulations are looking at Julia to replace the older mathematical computation packages that are slow, unwieldy and expensive. Examples of such organizations are found in automotive, aerospace, government labs, space research, and many others.

Regulators around the world are increasingly worrying about safety. Financial regulators want algorithms that are auditable and don’t crash markets. Regulators who keep our cars and planes safe and our environment clean are increasingly worried about the software that runs on these devices. Health regulators want devices that monitor our health to have reliable software. Regulators worldwide are now thinking about open source as the only viable approach to safety. Languages such as Julia that are mathematically sound and safe, make it easier for businesses to write software and for regulators to inspect it. We invite the reader to watch this fascinating video on the use of Julia in avionics.

In the nascent world of the Internet of Things, Julia provides a common language for analytics on the device and the server where algorithms can seamlessly and automatically move back and forth, given the constraints of bandwidth, power, and processing. Do see this video on the use of Julia in 3d printing.

Julia Computing, Inc. is a company formed by all the creators of Julia. Julia Computing provides professional development and deployment tools for Julia, consisting of open source as well as proprietary components. Our customers love having a common language for development and deployment of analytics solutions. Their gains are easily quantified by the elimination of program rewrites for deployment, and the significantly faster time to market.

Again, we are really excited to announce our first JuliaCon India at Bangalore on Oct 9th and 10th. Julia Computing has partnered with hasgeek for this event. For details and for registration, please visit http://www.juliacon.in/2015.

Guest Post by Viral Shah & Deepak Vinchhi for Julia Computing.

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Product Company OR Services Company?

My name is Rajan Chandi, a technologist who likes to build software products, experiment and have fun. I was particularly fascinated by Google, Facebook and Tech Innovation. The reason why I quit my job was to be able to explore tech entrepreneurship and build awesome things.

It has been a great ride building, launching and monetizing 3 software products to various degrees with small teams and limited resources. I am using this blog­post as a medium to express my personal views on whether a company is a product company or a services company.

The Reason for Existence

If someone who has started to create a ‘search engine’ while doing their PhDs or someone who is building a social network to extract personal information of Harvard students, they are starting­off as a product built to serve a purpose of its users. Google renders ‘web search’ as a service to its users or Facebook renders ‘social relationship management’ as a service to it’s users. Even Evernote advertises itself as a ‘Note Taking Service’ but they’re all products built to serve a particular purpose. If a company is starting off with a great product to serve a large market, they’re definitely a ‘Products Company’.

Important factors that set apart a product company from their service company counterparts:

  • In case of product companies, they EXIST because their product exists.
  • In case of services companies (trying to build a product), they exist DESPITE the existence of their product.
  • If people care about a company because of it’s product, it’s a product company. (e.g. Ola or UberApps or Flipkart/Amazon app/site).
  • If people love a company primarily because of it’s customization/support, it’s a services company.
  • If a company’s business model can scale without adding a proportionate amount of people to its payroll, its a product company.

Automated Recurring Source of Revenue

How the company makes money? is an important question. The answer tells us a lot about what their users value, what ‘sells’, how does it sell, how can they make more etc. If a company is making most of it’s money because of their awesome product then they’re definitely a Products Company. e.g. Ola Cabs came off as an App while Meru Cabs was still popular in Bangalore. Meru cabs had an army of cabs, trained drivers and all the booking/communication apparatus.

How did Ola manage to exist?

They came up with an app that connects customers with existing drivers, leverages their cabs and manages to do a transaction with minimal human intervention. They may be known as a ‘Cab Hailing Service’ but they’re definitely a product company because they generate revenue due to existence of their product. People care about them because their app works and their prices are competitive!

Product Division: Profit Center or Cost Center?

There are a number of companies with IT/Products departments to serve the ‘business’. It you need an IT division mostly to serve the business, you’re probably tilting towards a services company. If you have an IT/Products department to serve (directly) either consumers or customers, you’re tilting towards being a product company. If allocating more money in tech/product/design division of the company will boost sales, you’re clearly a products company.

If allocating more money to product/tech/design will NOT boost you sales or grow the number of customers, you’re probably a ‘services’ company losing money in the ‘Product’. If you’re investing into a product with clear growth goals, you’re likely to be a product company.

‘What’ do they do it? ‘How’ do they deliver or render their service?

Every company has to sell something to be able to exist. ‘What’ they sell is important but ‘How’ do they ‘do it’ is far more important. For example, Google sells ‘Web Search’ as a service to people, it works. They’re a product company because of the ‘How’. They do it by building a high­tech product which indexes the web and makes the information available to users.

There exist a number of ‘Market Research’ companies. They also search things for you and put together a report. They do something similar to Google in the ‘What’ division by providing you information that you requested but they’re very different in ‘How’ division. Market research company has to put manual effort behind every ‘research’ they do which is far­less scalable model because they’ve no product to do it.

If a company offers a specific (non­democratized) offering which others find it impossible (or very hard) to offer at that price­point, it’s a product company.

The Solutions Company

There’s a thin­line when it comes to selling a product+customization in case of software products. Let’s call it “solutions company” which offers software solutions of specific problems which are customized as per customer’s needs. Automating these solutions (to a SAAS) will convert these companies into a Product company. Extreme customization necessity will turn these companies into services companies.

The Extremes of Automation

The key theme with all product company is existence of a great product which is hard to be replaced by off­the­market solutions. As a personal example, my last start­up Classmint.com operates today without putting more than 4 hours of my time on a monthly basis. It still has 30,000 monthly active users and around 500­1000 study notes are created on a daily basis. Classmint exist because the product (website) exists and does it’s job of providing a tool to create the best study notes online. If a system is built and is useful (offers a service), it’s clearly a product company. If you’re building a company, think about amount of automation that will exist.

The Litmus Test

Quick way to classify a company is to ask a question: Will this company still exist if we take down their product or replace it with commodity software? If the answer is a clear yes, It’s a services company. Otherwise, it’s a product company with their product as a differentiator.

Special Thanks to Amar, Sharad and Ravi. Amar Prabhu contributed to this article by editing it. Sharad Sharma and Ravi Trivedi contributed to this article by reviewing it.

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What you need to know while hiring an Image consultant?

Every startup originates with a dream and a vision to make their ideas come to life and be instrumental in providing real life solutions; addressing critical problems, bringing innovation and delivering better user experience. A startup boost of entrepreneurial spirit with great zeal and enthusiasm coupled with determination, commitment and challenges.

Growing a business in today’s fast evolving environment is an overwhelming experience.

Rise- fall -Rise of startups:

Entrepreneurs know that a good idea can perish if it is lacking or not aligned with the current requirement of the market. While they have the passion and commitment, they are not able to reach to the right market and the target audience whereas, their competitors are prospering and gorging the limelight, and this is one of the main reasons, some Entrepreneurs are unsuccessful or doomed to failure.

Having said that, no matter how innovative and new your product line is, if you are not able to position your product in the market right and stay ahead of your competitors, The chances are quite bleak that your business will sustain over a period of uncertainty.

“If you don’t tell your story, someone else will.” – Unknown

Thankfully, that scenario is slowly changing as new entrepreneurs now understand the importance of building the Image and brand of their organization by adopting uniformed methods of communication. This creates a niche for themselves. However, even though more and more startups are aware about the need for ‘to be seen and heard’, they are not very clear about right channels, timings and people to address for attaining the ultimate outcome.

So, before a startup plans to hire an Image consultant, they need to seriously consider the following aspects, after all, engaging any form of communication, be it marketing, social or digital media or Public Relations services; will be an expense that requires an investment not only monetarily, but in terms of time and readiness to be present in the market

Answering the unanswered: The sole objective of Image creation of a startup

Most of the successful brands have recognition and therefore are continuously in the news. This plays a vital role as they thrive on attention, which a startup might not have, therefore it is imperative to outline a strategy that will not only keep the emerging brand in the media spotlight but also maintaining the level of consistency.

Keeping a tab on what competitors are doing and recognize the current trends in the respective segment will assist in structuring the goals and accomplish the desired results.

An Image consultant who is constantly in touch with the media and understands your product domain will help differentiate the brand from its competitors.

Identifying your market and your needs:

In this age of fast paced communication, when opinions & feedbacks are exchanged freely using various social and media channels like Twitter, Facebook, LinkedIn, TV etc… Image and reputation management plays indisputably an important role and requires a new level of engagement on the part of companies and entrepreneurs. While aiming for the moon and stars is good in the long run –it is not advisable to do so during an early stage of a startup, instead adopting a focused approach will reap benefits for entrepreneurs. A smart and coherent consultant understands this and help create a lasting impact on your target audience by telling compelling stories about your business thereby building strong relationships with your audience.

Identifying leads and converting them into relationships

A good Image consultant or consulting agency knows that “communications is an art” and they are the catalyst between the brand and the media to reach out to the consumers. So, when hiring a communications specialist evaluate them on the basis of their ability to tell you succinctly, who they have worked with and notice how well they summarize each company and what they did. Having existing relationships, their ability to create new ones and identify potential consumers to resonate with the brand.

People do not buy goods and services. They buy relations, stories and magic. – Seth Godin

Invest not in what comes cheap but what will add value

Speaking of brands and building up a recognizable brand identity is perhaps one of the most significant responsibility, so it might as well be shouldered by someone who will be able to manage it well. The value of an experienced Image consultant or a team shows in its ability to bring your message to target audiences in the areas most important to your business.

While there are many more measures a startup or an entrepreneur can evaluate the image consultants or consultancies they plan to work with, these above listed tools will help you in finalizing the most suitable consultant or consultancy to manage your brand. However, there is always this thing you would need to consider when deciding between your options, it’s important to realize that the practice of a solid Image building campaign will take few months before you see results.

Guest Post by Juhee Bagri

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Making the Future

What we see in theMaker addiction, is that a relatively small amount of people can have a big impact. You don’t necessarily need the world’s largest company behind you. – Dale Dougherty- Founder, Make Magazine

4 years ago, I walked out of the elevator onto the 4th floor of NYU’s TISCH building, home to the Interactive Telecommunications program that brought together some of the most diverse bunch of brilliant misfits from around the world to learn, teach, collaborate and make. The arriving Masters candidates, were an eclectic bunch, which included engineers, designers, lawyers, journalists, artists, architects, a masseur, filmmakers, dancers, fashion buyer, and a former drag queen. I was an actress and TV host, who didn’t know a soldering iron from a glue gun, and who, like many in my incoming class, had never written a line of code in her life. Yet, only a month later, I would strip down an old computer for spare parts to make my own galvanic skin resistor from scratch, and program video outputs to visualize the incoming data. My first wearable prototype –the mood gauge, had involved experimenting with different materials, soldering, electronics, programming, designing, user experience and video, all of which I’d known nothing of when I stepped off the elevator that first day of school. When my first device ‘talked’, I was hooked. The Maker addiction had begun.

The maker era, enabled by the Internet, DIY 3D printing, low cost chips/boards, open-source prototyping platforms like the Arduino, shifting business models and payment options have erased barriers to creation and expression and leveled the playing field. Today, if you want to express an idea, you can choose whether you want to employ sensors or film, an android app, performance or interactive sculpture. The Maker movement is sometimes perceived to be synonymous with geek culture, robotics and gadgets. And there is truth to this. Engineers, with their deep knowledge and a love of taking things apart are no doubt the movement’s most ardent mascots. However, making is more than just about the technology. It is about a cross pollination of ideas, the merging of the boundaries between disciplines and philosophies. At it’s core, the maker ideology is about moving from being a mere consumer to participating, influencing and changing the world you interact with- be it objects, people or experiences. It is also about pushing boundaries and experimenting for the sheer fun of it. And to achieve this, we need a variety of backgrounds and perspectives all playing with each other. Making/tinkering encompasses a dazzling variety of creations- including DIY quadcopters controlled by brainwaves, cloned fig trees, bamboo bicycles, environment-reactive clothing, 3D bio-printed organs. It touches every area of our lives and encompasses many different fields- arts and crafts, engineering, urban planning, architecture, theatre, film, storytelling, psychology, education, gastronomy, relationships, health & medicine.

“Technology is a means to an end; the end is people” – Red Burns, Founder, ITP, NYU

The industrial revolution concentrated the means and power of production in the hands of a few. Even the entertainment and news industry was a one-way street, with a clear delineation between producers and consumers. There was no way of “talking back” or dissenting on a scale that had any sort of impact. The internet and the subsequent democratization of tools and access changed that. Today, a lone individual with a You Tube channel can command more viewers than a major news channel. As an example, PewDiePie’s, a Swedish gamer’s You Tube channel has 32 million subscribers and more than 2 billion views. All he needed for that was a video camera and a subject he was passionate about. The rise of cheap 3D printers means many more people can create physical objects designed by them quickly and cheaply. The most exciting aspect about the maker culture is that it endows the maker with personal power. Where once, we grumbled about the lack of government initiative in solving certain problems, today, we have the means of creating our own solutions.

This is where makerspaces and Maker Faire comes in. Around the world, maker culture has emerged, founded on the ideas of collaboration and learning to learn. Innovation is a happy byproduct of this culture. From the Bay Area to Bogota, Istanbul to Nairobi, maker cultures are blossoming, driven by a spirit of collaboration and learning to learn. In India, Bangalore, Mumbai, Delhi, Ahmedabad and Kolkata have their own makerspaces, driven by a global sensibility, but also grounded in locally relevant approaches. One of these spaces, Bangalore’s Workbench Projects, operating out of an inspiring space in the Halasuru metro station, has been at the forefront of some exciting maker initiatives, one of which is the Bengaluru Mini Maker Faire, which it is hosting in collaboration with Nasscom.

Maker Faire describes itself as “the greatest show and tell on earth”. People from all walks of life come to show what they’ve made and to learn from each other. The open, playful nature of these events are deeply conducive to cross-collaborative projects and innovation.

“The Walls between art and engineering exist only in our minds” – Theo Jansen, Dutch artist, creator of kinetic sculptures.

“Maker Faire is primarily designed to be forward-looking, showcasing makers who are exploring new forms and new technologies. But it’s not just for the novel in technical fields; Maker Faire features innovation and experimentation across the spectrum of science, engineering, art, performance and craft” – Maker Faire website

The First Maker Faire was held in 2006 at San Mateo and attracted 20,000 people. Today, Maker Faires are held all over the world, with 151 events taking place in 2015 alone. Aware of the global shifts towards a maker driven economy, and eager to maintain their innovative edge, bigger corporations are now increasingly part of the Maker Faires. Companies like General Electric, Autodesk sponsor and, as in the case of Motorola, even collaborate with hardware startups like Makerbot.

The Bangalore Mini Maker Faire aims to be a community based learning event celebrating the Indian maker culture, with it’s unique perspectives, aesthetics and challenges. Be it robotics, games, gastronomical innovation, sustainability, textiles, apps or video, the Mini Maker Faire is a chance to climb aboard the Indian maker bandwagon and be a part of a global movement, one that Kevin Kelley has dubbed the “Third Industrial Revolution”.

If previous industrial movements were about creating silos and competition, the maker movement emphasizes and engenders collaboration. A fashion designer collaborates with an engineer to create a responsive dress, a homemaker and a 12 year old biology enthusiast work on bio-fabrication projects, the local police team up with security specialists, designers and android developers to create apps and devices for a safer city. The possibilities are endless.

If you’re a maker or think you might like to try your hand at being one, apply to participate before the 15th of September by sending an email to info(at)workbenchpojects.com

If you would like to support the maker community as a volunteer, sponsor (be it individual/ organization) feel free to email to info(at)workbenchprojects.com.

The Bengaluru Mini Maker Faire will take place on the 15th of October 2015 at the Taj Vivanta, Yeshwantpur.

Guest Post by Suvarchala Narayanan

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Open Source leaders discuss innovation, entrepreneurship and software patents.

Rohini Lakshané attended “Open Innovation, Entrepreneurship, and Our Digital Culture” in Bangalore on August 13, 2015. Major takeaways from the event are documented in this post.

Prof. Eben Moglen on FOSS and entrepreneurship

  • The culture of business in the 21st century needs open source software or free software because there is one Internet governed by one set of rules, protocols and APIs that make it possible for us to interact with each another. The Internet made everybody interdependent on everybody else. Startup culture needs free and open source software (FOSS) because startups are an insurgency, a guerrilla activity in business. The incumbents in a capitalistic world dislikes competition and detests that existing resources, such as FOSS, enable insurgents to circumvent some of the steep curve that they had to climb in order to become incumbents.
  • Hardware is developing in ways that make the idea of proprietary development of software obsolete. There is no large producer of proprietary software that isn’t also dependent on FOSS. Microsoft Cloud is based on deployments that do not use Windows but are based on FOSS. The era of Android as a semi-closed, semi-proprietary form of FOSS is over. Big and small companies around the world are exploiting the open source nature of Android.
  • Free software is a renewable resource not a commodity. Management is needed to avoid over-consumption or destruction of the FOSS ecosystem. Software is to the 21st century economic life what coal, steel, and rare earth metals were at the end of the previous century.
  • FOSS turned out to be about developing human brains. It turned out to be about using human intelligence in software better. Earlier universities, engineering colleges and research institutions were the greatest manufacturers and users of FOSS. Now businesses of all sizes are.
  • When Richard Stallman and Prof. Eben Moglen set out to make GPL free, they initiated a large public discussion process, the primary goal of which was to ensure that individual developers have as much right to talk and to be heard as loudly as the largest firms in the world. At the end of the negotiation process, 35 or 36 of the largest patent holders in the IT industry accepted the basic agreement to be a part of the commons. — Incumbents like people to pay for a seat at the table. Paying to have an opinion is a pretty serious part of the landscape of the patent system.

Prof. Eben Moglen on Digital India

  • Every e-governance project that the Indian government buys should use FOSS. The very nature of the way the citizens and governments interact can come to be mediated by software that people can read, understand, modify, and improve. An enormous ecosystem will come up — a kind of public–private partnership (PPP) in the improvement of governance and government services, which is far more useful than most other forms of PPP conceptualised in the developed world in the 20th century.
  • Everybody has a stake in the success of this policy. Several corporations are working against this policy as they once stated that they do not need FOSS.
  • The biggest market for both making and consuming software in the world is in India, because the science done here will dominate global software making, which in turn will define how the Internet works, which in turn will define society. One can’t develop the largest society on earth by reinventing the wheel. The government is going to understand that only the sharing of knowledge and the sharing of forms of inventing would enable the largest society in the world to develop itself freely and take its place in the forefront of digital humanity.
  • If every state government’s data centre across India is going to be turned into a cloud, one state might have VMWare, another might have AWS, and so on, it would be disastrous. To prevent this, all e-governance activities of every state government and federal agency in India could be conducted in one, big, homogeneous Indian cloud. This would enable utility computing across the country for all citizens, which would also make room for citizen computing to happen. When one moves towards architectures of omnipresent utility computing with large amounts of memory flatly available to everybody, one is going to be describing a national computing environment for a billion people. We can’t even begin to model it until we start accomplishing it.
  • Prof. Eben Moglen’s ambition is that there comes a time not very long from now when basic data science is taught in Indian secondary schools. The software is free and all the big data sets are public. A nation of a 100 million data scientists rules the world.

Keith Bergelt on the Open Invention Network

    • Over the past 10 years, Open Invention Network (OIN) has emerged as the largest patent non-aggression community in the history of technology. It has around 1,700 participants and is adding almost 2 participants every day. In the last quarter, OIN had approximately 200 licensees.
    • There is now a cultural transformation where companies are recognising that where OIN members collaborate, they shouldn’t use patents to stop or slow down progress. Where members compete, they choose to invent while utilising defensive patents publications. What we are doing is a patent collaboration and a technical collaboration that exists in major projects around the world.
    • OIN has been making a major effort since January 2015 to spend more time in India and China to be able to ensure that the technological might and expertise represented in the two countries can be a part of the global community, and that global projects can start here. “We can expect to leverage the expertise of the community to be able to drive innovation from here [India and China]. It’s not about IBM investing a billion dollars a year since 1999 and having some birthright to driving the open source initiatives around the world or about Google or Red Hat or anyone else. You have the ability to impact major changes and we want to be able to support you in the name of freedom of action as participants.”

Panel Discussion

Patent Wars and Innovation

  • In the past 5 to 7 years, patent wars in the handset segment of the information technology (IT) market have wasted tens of billions of dollars on litigation, and on raising the price of patent armaments. This patent litigation was purely an economic loss to the IT industry and it contributed nothing. If the patent system strangles invention, non-profit groups, non-commercial bodies, free software makers, and start-ups cannot invent freely.
  • Defensive patent publications, such as those made by IBM, lead to the gross underestimation of the inventive power and output of the company. People are struggling to find something to evaluate the productive output of an entity – startup, micro-industry or macro-industry. Patents are being used inappropriately and it’s part of the corruption of the patent system. Any venture capitalist (VC) who believes that either the innovative capacities or the potential success factors of a start-up are tied to its patents should know that there are only a minuscule number of cases where patents are the differentiator. The differentiators required in order to sustain business are how smart the people are, how quickly they innovate, and how quickly they are able to adapt to complex situations. We see a trend in the US of not equating patents with innovation. The core-developer and hacker communities are largely anti-patent.
  • However, the flip side is that if the FOSS communities do not patent defensively, i.e., acquire and publish patents for their inventions in order to prevent others from getting patents in one jurisdiction or another, patent trolls will eventually encroach on the communities’ inventive output. The only people making money out of this whole process are lawyers. It is slowing down the uptake of technology by creating fears and doubts in the system.
  • FOSS communities didn’t qualify everything produced in the 23 years of (Linus’) Linux, which would have let the service serve as stable prior art, preventing other people from filing patents. We can debate what is patentable subject matter in general or whether software should be patentable, but in the meantime if we can be proactive and file everything that we have in defensive publications and make it accessible to the patent and trademark offices here and around the world, we will have far fewer patents. We need to be activists in making sure that people can’t file patents that are representative of the creativity of a community.
  • The Chinese government has instituted a programme designed to produce defensive publications in order to capture all the inventiveness across their industries, to be able to ensure that the quality of what ultimately gets patented is at least as high.
  • The US has a massive repository called ip.com, which is with every patent examiner of the USPTO.
  • India does not grant software patents as per section 3(k) of the Indian Patents Act, but that doesn’t mean that no software patents are being granted. One of the empirical studies conducted by the Software Freedom Law Centre (SFLC) in India shows that 98.3% of the [telecom and computing technology] patents granted till 2013 went to multinational corporations. Almost none of the assignees are Indian.
  • In the context of the ongoing patent infringement law suits filed in the Delhi High Court by Ericsson [link]: The Delhi High Court has had a reputation of being very pro-intellectual property from the beginning.
  • Also, there is pressure from trade organisations. In August 2015, Ericsson along with ASSOCHAM invited the Director General of the Competition Commission of India to present a paper about why patents are good. It is essential to determine how the rules of conflict of interest apply here. This is exactly what the pharmaceutical industry would do. The only bodies who would object are Doctors Without Borders (MSF) or some local organisations who realise that high priced patented drugs is not what India needs and that we do not need to have the same IP policy as the US or Japan. We only need a different policy.
  • The Special 301 Report of the United States Trade Representative (USTR) is a big sham, and it suggests that India doesn’t have strict enforcement of IP law. India does, unlike China.
  • Accenture has been granted a software patent in India. The patent is about an expert present in a remote location transferring knowledge to somebody who is listening in another location. Universities offering MOOCs, BPOs, and many other services would fall under such a patent. SFLC spent four years trying to fight this patent. The first defence of Accenture’s battery of lawyers was that they won’t use the patent.
  • Patents of very low quality are being bought at very high prices. The tax system or the subsidy system for innovation regards all patents as equal. This is a pricing failure and that should be corrected by other forms of intervention. The pendulum has already begun to swing the other way. Alice Corp was the third consecutive and unanimous ruling by the US Supreme Court that abstract ideas are not patentable. Patent applications pertaining to business methods and algorithms are increasingly being rejected by the USPTO after the ruling.

Prof. Eben Moglen on Facebook:

Facebook is a badly designed technology because there is one Man in the Middle who keeps all the logs. The privacy problem with Facebook is not just about what people post. It’s about surveillance and data mining of web reading behaviour. It is a social danger that ought not to exist. I have said since 2010 is that we can’t forbid it; let’s replace it. It means bringing the web back as a writeable medium for people in an easy way. What I see as next-generation architecture could just as well be described as Tim Burners Lee’s previous generation architecture.

You have to be able to trust the Internet. If you can’t, you are going to be living in the shadow of govt surveillance, corporate surveillance, the fear of identity theft, and so on. We need to be able to explain to people what kind of software they can trust and what kind they can’t. Distributed social networking will happen; it’s not that difficult a problem.

An example of federated networking is Freedombox, a cheap hardware doing router jobs using free software in ways that encourage privacy. The pilot project for Freedombox has been deployed in little villages in Andhra Pradesh and Karnataka. These routers don’t deliver logs to a thug in a hoodie in Menlo Park.

By Rohini L, Reblogged from the The Centre for Internet and Society Blog.

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Show Me The Money

Who doesn’t remember the famous four words of the 1996 film Jerry Maguire? The relevance of these words encompasses all generations. We look at the rich and mighty with a hint of jealousy, sometimes incredulously , some other times in awe, yet other times perturbed. On the other hand, the poor and downtrodden are subjugated to our pity, dissidence, even repulsion.

Now that makes one thing very clear- more or less or none, but money has the power to trigger our insides.

My husband and I abide by our morning ritual of reading the good,the bad and the ugly, hidden in the dull text of black ink, spread accurately on those beautifully blending 20 crisp peachy pages; unravelling the mystery of this world layer by layer with every sip of our invigorating morning tea. A ritual so intellectually stimulating , consequential in further bonding, has now become a regular phenomenon. Every morning, the message is the same– business ecosystem in its finest form, the mood of the start-ups at its optimistic best. Such positive reinforcements does uplift our spirits but it bewilders us too.

Modi Ji’s “Make In India” mantra began to unfold with the conception of India’s biggest e-commerce space- FLIPKART, by the Bansal duo. And with it started a revolution that took the entire nation by surprise. Since the beginning of last year, every other day(if not every day) ET reflects such a luminous picture of our economy. And the chunk of this positivity comes from the exhilarating news of one start-up after another. Either they have raised a colossal amount in funding, or they have had a path-breaking M&A, or they have been subjected to overwhelming(read ‘obnoxious) valuations.

These recurrent success stories have given birth to a new breed of entrepreneurs- the “COPY CATS” who are mindlessly jumping the bandwagon. They think they have cracked the code behind the success of these new age companies. The keywords are countable- IIT, IIM , e-commerce, m-commerce, angel investor- blend one element with another or all, and your magical potion is ready. And this potion is so potent that it affirms success against all odds. Zomato, TaxiForSure, Flipkart, Snapdeal, ZoRooms- all have been founded by IIT/IIM alumni.

The “me-too” entrepreneurs have a flawless design ready to trap potential investors. The code is a no-brainer though; project a high traction metamorphosing into more investors, subsequently larger funds, perfectly ending into higher valuation.

The silver lining,however, is that crony capitalism is fading and a new crop of optimistic entrepreneurs is mushrooming. No longer you need to be a TATA or an AMBANI to dream big. The new age start-ups and their success stories have infused a new confidence in today’s generation. They can dare to dream, and that too big. Now that’s one promising change in our country’s antediluvian thinking where a farmer’s son could only dream of becoming a farmer, a teacher’s son only a teacher. It is this promising environment that allowed the 18 year old college drop-out from Orissa in 2011 to venture into an unknown territory and build today’s famous OYO rooms in 2013. He’s been in limelight recently for having raised an elephantine amount($100 million) from Japan’s Soft Bank. This definitely is an extremely positive outcome of this start-up culture where no longer fears detain you in realising your truest potential.

Have the zeal, And crack the deal.

The definition of success is,however, very unique to this breed. Ideally a successful business should generate large revenues, handsome profits,employ large no: of people and make a social impact. While a few of these new age start-ups fulfil most of these criteria, the most profound aspect of running any business is not met. Yes, I am talking about PROFIT(in BOLD letters).

Flipkart, Snapdeal, Zomato, are few such organisations worthy of enviable valuations with no profits. If I may elaborate no profits as “million dollar losses”.

SP-CP=Profit, a formula that even my 10 year old understands is of no consequence to the companies of the likes of Flipkart or Snapdeal. We have grown up in an era of brick-and-motor companies. Making purchases online is still an alien concept to me. But what exists pan any business, culture, economy,era is one and only one thing- Profitability. In the quest for scale, profitability is taking a beating. Achieving traction by offering tantalising discounts doesn’t suffice zero profitability.

This is where Media plays the devil’s advocate. It craftily masks the “no-profit” feature of these companies and celebrates their “valuations” (all on paper). It shrewdly creates a larger than life image of these new-age entrepreneurs. It chooses to present to the audience what it wishes them to see and read; featuring them on cover page of leading business papers and magazines. As a result it creates a superficial success story that revolves around raising funds and basking in multi-million valuations. The bigger the funding, the bigger the legend-like stature, the crazier the media frenzy. This creates an environment where these “real” heroes are worshipped by the aspirational youth who are totally smitten by their relentless journey.

What everyone overlooks,however, is the sustainability of these companies who are riding on investor’s money and the dubious mechanism of discounts. And when these companies start to decline in their valuations, it this media that will rip them apart so brutally, so mercilessly.

So does that mean that media shouldn’t give credit where its due? That it shouldn’t encourage and celebrate those who dared to dream, who dared to give a form to their entrepreneurial spirit? Of course it should. It must applaud those took the risks, it must boost their morale, it must glorify their achievements. But it should refrain from painting a picture so perfect.

VCs who today are messiahs to these burgeoning start-ups are enjoying the spectacle with much aplomb. Every time they agree to fund, they gain significant media attention which heightens the public interests manifolds. These VCs are the ultimate gainers in this entire game plan as they create such a promising and utopian environment, thereby painting a surreal picture for these companies, while on an alert all through to making opportunistic exits. They are clever enough to bathe by the bank of this crocodile pond but will never swim in it. An entrepreneur is so enamoured by the VC culture that he fails to read between the lines and accepts the terms so faithfully; in most cases ends up getting short end of the stick. A recent example of this would be when Lane Becker and two of his co-founders sold their $50 million customer service company ‘GetSatisfaction’ to Sprinklr. He unabashedly claimed how the arrangement was nothing short of a fire sale where the VCs happily devoured the chunk of the pie leaving a tiny morsel for the founders.

My learning:”Get investor at your own risk”.

The sharp drop in valuations of new-age ventures in the US and China should be a wake up call for the Indian counterparts. Yelp, a US based restaurant search and review venture, lost its valuation by $5.9 billion from a year ago. The survival of its Indian “me-too” company Zomato which is barely 4% of Yelp’s revenues but a whooping 58% of its valuation, worries me aplenty. Market is going to correct soon and when it does it will take all these new-found companies by storm.

Who has seen tomorrow? How can these valuations be based on what will happen 10 years hence? The promise of tomorrow does not take into account future disruptions or new competition entering the marketplace.As Peter Thiel rightly captures the essence in his book-‘Zero To One’ by stating that companies may create a lot of value, without becoming valuable itself. In same breath he also states that most of a tech company’s value will come only in 10-15 years in future. Mystery of what lies ahead coupled with a loss-making present is indeed alarming. The prime objective of any business is Profit, and it should be given a rightful significance and not allow these insane valuations to steal the show. All this boils down to one and only one understanding-

Business is in profitability,

not in valuations…

Its in sustainability,

not discount mechanisms…

On paper all seems rosy,

But somebody has got to ‘SHOW ME THE MONEY’!!!!

Guest Post by Megha Chopra, Director/Board Member, Rategain

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Next BIG Idea Contest – Your Gateway to North America

Most of the tech businesses today, look at a global reach and expansion. However, it is difficult to achieve this without a strong network, and finances. Also, it does not help if you are an early stage technology startup from India, with a limited customer base – no matter however great the product is. The Next BIG Idea Contest provides an opportunity to tech startups from India, to tap into the most tech-savvy economy i.e, North America. While the US is always the big dream of several entrepreneurs, it is difficult to get there. At the same time, Toronto, Ontario, Canada presents an easier gateway to the larger North American market – being at the heart of the 300 Million strong Mid-West region. Being multi-cultural at heart, Ontario, Canada is open to businesses and entrepreneurs. Also, the cost of doing business is much lower. Abundant with talent, and having a strong pool of tech companies and startup incubators in the Greater Toronto Area, the region provides a great support ecosystem for tech startups to scale.

NBI 2015The Next BIG Idea Contest is a joint initiative of the Government of Ontario, Canada and Ryerson University, Toronto. The contest was conceptualized in 2013, with the objective of identifying promising tech startups from India, and showcasing them in Toronto; largely to provide a platform in North America for these startups, as well as to change the perception that India produces only IT services companies.

The contest is an application based process, where entries are evaluated on the basis of clarity of concept, innovativeness of the idea, development feasibility and the marketability of the product. The winners get selected based on 2 rounds of screening, further to which they are provided a soft-landing in North America, by spending 2 weeks at the DMZ, Canada’s No.1 startup incubator. The winners get exposed to Toronto’s startup ecosystem, get to meet potential partners, do corporate visits, interact with the investor community, business development support, and of-course a lot of startup meets.

The first year saw a minimal outreach, which led to only 23 entries coming in. While the competition was meagre, the winners we got were really good. CitrusPay was then a 15 member team, and was yet to raise its first round. Today, they stand at 180 employees and have raised a couple of rounds of venture funding from renowned firms. The other winners included Sokrati, an ad-tech startup from Pune (which incidentally chose not to go at the last minute), and Digital Ingenuity, a video-indexing startup from Ahmedabad. So, CitrusPay and Digital Ingenuity spent We didn’t even have a back-up for Sokrati because the entries were so poor! This was a massive learning for the contest, going forward.

In the 2nd year, having realised shortcomings from the previous edition, the contest adopted a strategy to work with partners. After all, it is an initiative for the ecosystem – so, collaboration was the way forward. We got great partners in CIIE-IIM Ahmedabad, Kyron Accelerator (Bangalore) and InvestoPad (Gurgaon). Additionally, IBM Global Entrepreneur Program coming on-board as a sponsor partner and the alliance with the NASSCOM 10,000 Startups Program & YourStory, made it a very strongly branded contest. The contest was launched in Mumbai, and roadshows were held at all partner locations. The results were there to see – 227 applications! A 10X jump over the previous edition. After 3 rounds of evaluation, we were left with the top 20 startups, and it was extremely difficult to choose the top-5. The ones that eventually made the cut were AdSparx (Pune), ShieldSquare (Bangalore), Konotor (Chennai), Flip Technologies (Kochi) and Vidooly (NCR). A really great bunch of promising startups. Vidooly recently raised $2.2Million from Bessemer Venture Partners, while AdSparx, ShieldSquare and Konotor have jointly raised in excess of $1.5Million. Flip Technologies went on to get selected by a hardware accelerator in Abu Dhabi. They are fantastic ambassadors for the Next BIG Idea Contest.

In 2015, Next BIG Idea Contest is back bigger than the last year. From 3 partners in 2014, the contest will be launched across 9 cities, with 7 city-based accelerator partners this year. The city-partners are CIIE (Ahmedabad & Pune), Microsoft Ventures (Bangalore), PayPal Start Tank (Chennai), IIIT-H (Hyderabad), Startup Village (Kochi), CIBA (Goa) and 91 Springboard (NCR). NASSCOM 10,000 Startups continues to remain the ecosystem partner, and YourStory as the startup media partner. AWS has replaced IBM as the sponsor partner.

This year, we look forward to an even stronger response from the startup ecosystem in India, and a multifold increase in the entries coming-in. We are excited to showcase the great talent and products emerging from India’s startup ecosystem, to North America; and become the contest to look out for, to startups wanting to enter the North American market.

Oh yeah, and by the way, the contest and the winners trip is fully sponsored. You just need to apply, and show up for the visit, if your startup is selected as a winner.

Guest blog post by Ajay Ramasubramaniam, Zone Startups