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MakeMyTrip’s Deep Kalra on bowling, resilience and going against common sense

Deep Kalra is the founder and CEO of India’s leading online travel company MakeMyTrip.com. Founded in 2000, the company is now the largest e-commerce business in the country and listed its shares on NASDAQ in August 2010. Prior to founding MakeMyTrip.com, Mr. Kalra has had corporate stints with GE Capital, AMF Bowling Inc. and ABN AMRO Bank. He holds an MBA (PGDM) degree from IIM, Ahmedabad and a Bachelor’s degree in Economics from St. Stephen’s College, Delhi.

Read on to find out about the true test of an entrepreneur, the importance of knowing dhanda at a startup and going against common sense.

[Innovate Delhi] You believe in turning what one loves doing into a business model. How did you figure out what you love and turned that into India’s leading online travel company? 

Deep Kalra[Deep Kalra] For all entrepreneurs you have to focus on something that you love. But it definitely took me three jobs to figure out what I loved – I worked in banking, I worked in a very entrepreneurial role at AMF Bowling and I worked for GE Capital. Between these three roles, I figured out that I enjoyed the untrodden path. I was excited by stuff that had not been done before or at least not been done before in this part of the world. My second role was very entrepreneurial and I enjoyed that the most despite the fact that it was not financially a success. But I really had the time of my life which made me realize that I rather be doing my own thing.

What did the failure at AMF bowling teach you? How important do you think failure is in an entrepreneur’s journey?

AMF Bowling was a game changer in my own mind in terms of approaching different problems. Here was a problem that had not been thought about – How do you sell a family entertainment center around bowling which had not existed before? Addressing this problem was a learning curve in doing dhandha which is different from corporate business. Overall, it was a good learning experience in terms of a start up and solving problems that had not been solved before. It was also very personally fulfilling to me and I didn’t want to give it up. In hindsight, common sense would have dictated that I called quits within a couple of years but I worked with AMF Bowling for four years. So it also taught me that I can keep my head and chin up during a period when things are not working.

How is doing dhanda a unique challenge in itself? I read that you have bribed repairmen with bottles of rum to fix rat chewed cables. What challenges does the Indian entrepreneurial space pose and how do you deal with them while ensuring that you don’t lose sight of your larger goals?

I didn’t make a habit of bribing repairmen with alcohol but did so some unconventional stuff! The important lesson is that in the first many many years an entrepreneur should be ready to do anything and everything. And a lot of people are not. It’s better to start your entrepreneurial journey earlier than later because you have lesser hangups. At the same time, there is something to be said about good work experience. I don’t know what is a good amount. For me it was 8 years. But some entrepreneurs have never worked for someone else. I would recommend, especially in the Indian context, to work for a couple of years in a good company. It will help you later in life- you want to hire good people, you want to keep them motivated, you want to do the right things. I don’t think any amount of education prepares you for those kind of decisions.

In the initial years, an entrepreneur spends most of the time doing non-core business because you don’t have a team. And in India, things take longer. But hopefully with more interest and infrastructure in this space, the processes will get shorter. For instance, its getting easier to hire good talent. A startup is no longer a very unusual career. As an entrepreneur you have to be an excellent seller because you are selling all the time. Even if you are not doing the traditional selling of your product, in the early stage you are selling to get good talent. You are selling your story, your company all the time. You have to convince people to give up their great job at GE Capital or a think tank or Unilever etc to join one’s company. And then you need to sell to raise money. Each time you go out to meet current investors and potential investors, you are selling without realizing. And you have to work harder to sell your story in India because there are fewer startup success stories here.

You have clearly done a great job of selling to potential hires, MakeMyTrip has consistently been ranked amongst the the Top 10 “Great Places to Work for in India” by The Economic Times in the last four years. What is the culture at MakeMyTrip that make it such a great place to work?

The culture at an organization is related to the founding team or founder. One of the titles that the founder carries through life is Head of Culture. The founder has to walk the talk. I think it really comes down to passion and personal values of the founding team. Because then you end up hiring people for values. Then you start percolating down those values among similar minded people into a “culture” or whatever you want to call it. Over time it becomes established and you can talk about it.

In your corporate and entrepreneurial journey, how do you think the Indian entrepreneurial space has evolved and what are the most promising trends today?

There has been tremendous change in the last 3-4 years. The quality of entrepreneurs is improving. People have a much better overall view of what they want to do and what they need. There are lesser and lesser people who want to do something that’s cool. So folks are coming in for the right reasons. I love that there has been a great increase in the amount of angel funding that is available but there is big gap between angel and early and Series A and Series D deals. You can get your first round of capital fairly easily if you are an individual with a good plan but you have to be ready to perform in the next 12 months to get your Series A.

Do you think entrepreneurship can be taught or are entrepreneurs born?

I think its largely inherent. When things are going well, anyone would rather work for themselves everything else be equal. But that is typically not the case. Everything else is not equal. Let’s say you are going to make 50% of the money. Then what is it that you really want to do. And I think that is the test for if you want to be an entrepreneur or not. And yes, entrepreneurship can be taught but I think entrepreneurship has to be learnt more than it can be taught. And you learn it on the job. Ultimately, if you are happy being on the job, everything will work out.

If you were a judge at Innovate Delhi, what would be the top three qualities you will look for in an entrepreneur?

Agility and flexibility is one. There is a fine line between stubbornness and resilience. You have to believe in your idea but also be practical enough to make changes as you go along. You have to be wired analytically. I don’t know of any other way to run business. Creativity is important but if you are not fundamentally analytical then you will end up making decisions that are sub-optimal. And the third one is being a very good people’s person. It goes back to culture and teambuilding and it is something that comes to entrepreneurs naturally.

This blog post was written by Sonal J Goyal for Innovate Delhi Entrepreneurship Academy. Innovate Delhi is a three-week long academy that works with aspiring entrepreneurs to hone their skills in innovation, team-building, and strategy. Applications are due on 1st February. Apply at http://www.innovatedelhi.com/apply/

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RickShaw Rising: Submit your Innovative Ideas to Transform the Auto-Rickshaw business

We are pleased to support an initiative led by EMBARQ which focuses on sustainable transport. They are expanding their work to engage with entrepreneurs in this space. EMBARQ has launched an initiative – RickshawRising Challenge in partnership with Shell foundation.

The Rickshaw Rising Challenge 2013 recognises that the auto-rickshaw sector is ripe with the opportunity to implement innovative business solutions that can create large-scale change.

image015India’s rapidly growing cities demand safe, reliable and efficient public transport. The humble auto-rickshaw serves the mobility needs of millions of city folk. Yet the sector remains largely unorganised, with poor quality of service, poor safety and environmental performance, and low earnings for drivers.

The organisation is inviting applications from early-stage businesses that can bring large-scale change to the unorganized rickshaw sector in India. The challenge offers upto $50,000 and six months business support for winners. Last date for application is 20th Dec 2013. You can find more details about it on http://www.rickshawrising.com

 

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Cross-Border Alliances: Strengthening India’s Cyber-Entrepreneurs

India’s product-thinkers in the cyber-domain are a unique breed of cyber-warriors that could significantly benefit through cross-border partnerships. Credited with being one of the first nations to possess an IT road map, India has devoted additional focus to create a secure IT road map. Cybersecurity remains a critical concern for not only governments or businesses, but also for individuals.

Our increased connectivity has produced increased vulnerabilities, and has subsequently amplified cyber-attacks. Grey and Black-hat hackers choose targets indiscriminately, and are not necessarily loyal to specific foreign governments, competing corporations, or other organizations. On the contrary, India’s cyber-entrepreneurs are capable of demonstrating undying commitment to a vision – a vision to secure India’s cybersecurity ecosystem.

The Indian government has repeatedly underscored the significance of public-private partnerships (PPP), and conception of international governmental partnerships. However, our cybersecurity ecosystem seems unable to intensify active cyber-partnerships within the private sector itself. Undoubtedly, the government has proven to be instrumental in recognizing cybersecurity as a challenge, but, the private sector must spearhead change through global partnerships.

India’s modern cyber-entrepreneurs are our nation’s cyber-warriors; individuals who exceedingly need innovation and an exchange of ideas from foreign counterparts to secure our cyberspace. Indian cyber-thinkers must focus on formulating cross-border partnerships to engage in revolutionary activities such as joint-product development, formulation of joint ventures, and other forms of high-impact cooperation.

India’s cyber-entrepreneurs have undoubtedly developed a handful of world-class cybersecurity solutions, but clearly, the emphasis seems to be more on delivering services rather than creating innovative products. Living up to India’s reputation of being a leader of IT services; Indian cybersecurity companies continue to successfully service needs of various governmental, corporate, and academic entities. Nevertheless, this trend must not be viewed as a problem, but as an opportunity to reflect on the massive scope to conduct more meaningful activity!

Most product-based Indian cybersecurity companies primarily contribute to defense of our cyberspace by providing indigenous products/solutions for hardware and software entities. However, our cyberspace is an arena where deploying offensive cyber-tools is easier than conduct of cyber-defense. Increased collaboration with foreign counterparts could be a rewarding venture to enhance existing products, or develop new products to address multiple cyber-threats.

Such cross-border collaborative activity by India’s product-thinkers in the cyber-domain can stimulate productivity for respective cybersecurity organizations. More importantly, creating cross-border ties with capable cybersecurity firms will serve as a catalyst in enhancing India’s existing cybersecurity ecosystem.

Vishal Dharmadhikari is the Founder and CEO of India Cyber Connect, an organization that envisions filling gaps in India’s cyberspace through formulation of cross-border ties for the conduct of meaningful collaboration. Vishal is also the concept initiator of a business-event – India-Israel Cybersecurity Connect (IICC), an event featuring governmental and corporate leaders along with start-ups to promote Indo-Israeli cybersecurity cooperation

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Agility Flexibility For Software Product

[ There is an interesting discussion in ProductNation on Customizable Product : An oxymoron which triggered me to write this post]

I find many people use these words interchangeably. However the distinction is important and source of value. Agility can be engineered with proven techniques and best practices. With advancement in software engineering there is convergence on the tools and techniques to achieve agility and it may no longer be a source of differentiation but a necessary feature. Flexibility on the other hand requires deep insight into diverse needs and types of usage and done imaginatively can provide great value to users and be a source of competitive advantage.

The online Merriam-Webster     dictionary offers the following definitions:

Flexible: characterized by a ready capability to adapt  to new, different, or changing requirements.

Agile: marked by ready ability to move with quick easy  grace.

In Software product context it may be more appropriate to define agility as the ability to change things quickly and Flexibility as the ability to achieve a (higher) goal by different means. So ability to value Inventory by different methods like FIFO or LIFO or Standard cost is flexibility. The ability to change commission rate or sales tax rate quickly (generally by changing a parameter in a table of a file and avoiding need to make code changes) is agility.

There is a range or scale ( 1 ..10)  of agility. Making changes in code esp 3rd generation languages like Java, C# is the baseline. Using a scripting language like Javascript , Python may be less demanding then compiled language but it is still not as agile as most users expect. Most users would rate it simpler to update a parameter in a file or a simple user interface like a Excel type spreadsheet as simpler and faster. Changing logic by using a If-Then type of rule base is in-between. Simpler then coding but more complex then table updates.

You should have picked up some inter-related themes here. Complexity or need for skill in making changes to a scripting or Rule engine . Need for easy to use interface to make the changes. Need for relatively easy and error free method of making changes. If you need to update ten parameters in ten different places or change 17 rules in a  If-Then rule base it may not be as simple and is less agile .

Most modern Software products are fairly agile with scripting, table based parameters and rule driven execution engine. The use of style sheets in generating personalized User interface, specialized components like Workflow or process management engines etc also provide agility.

Flexibility is a different beast. Layered architectures and specialized components for workflow, rule execution and User experience can make it easier to accommodate different ways to do the same things. They make it easier to make the necessary changes but they do not provide flexibility as such. End users do not value the potential flexibility of architecture but the delivered functionality. This is a major problem. Even Analysts from Gartner , Forrester do not have a good way to measure flexibility and use proxy measures like number of installations or types of users ( Life Insurers and Health Insurers or Make to order or Make to Stock business).

Flexibility is derived from matching the application model to the business model and then generalizing the model. I will illustrate with a concrete example. Most business applications have the concept of person acting as a user ( operator) or manager authorizing a transaction. So a clerk may enter a sales refund transaction and a supervisor may need to log in to authorize this refund. The simplest ( and not so flexibly) way to implement this is to define the  user as clerk or supervisor. A more sophisticated model would be to introduce the concept of role. A user may play the role of clerk in a certain transaction and a supervisor in another.  Certain roles can authorize certain types of transactions with certain financial limits. So user BBB can approve sales refund up to 100,000 INR as a supervisor. However BBB as manager of a section can initiate a request for additional budget for his section. In this BBB is acting as a clerk and DDD the General Manager who approves the budget extension request is acting as a supervisor. This model is inherently more flexible. It is also not easy to retrofit this feature by making changes to parameters or If-Then rules. If the Application does not model the concept of Role all the agility in the product is of little use. Greater flexibility can be produced by generalizing the concept of user to software programs. So in certain high volume business a “power user” can run a program which can automatically approve a class of transaction under certain set of control parameters. This “virtual user” is recorded as the approver on the transaction. The application keeps a trail of actual control parameters and power user who ran this “batch”.

Flexibility comes from a good understanding into user’s context and insight into their underlying or strategic intent. Business and users will vary the tactic used to meet their intent based on context. Consider a simplistic example to illustrate. I need to urgently communicate some news to a business partner. I try calling his cell but to no use. I would send a SMS ( India) but if a US contact ( who are not as yet fans of SMS or Text) leave a voice message on his phone or send a email. A Smartphone that allows me to type a message and send as SMS or email is more flexible then one where I have to separately write the email or the SMS.

Frequently Software designers and Architects generalize all types of changes as extensions. They are not interested in understanding intent and context of usage and want a horizontal generic solution to all changes. This leads to overly abstract design with extension mechanisms to change logic, screens and database and reports. In essence to develop a 4th generation programming environment or Rapid Application Development Environment (RAD) . These help by making programming easier and faster but are no substitute for understanding user’s context and designing the application architecture to match and exploit them.

Users relate to a product which speaks their language and seems to understand them. They also get excited and impressed when they see new ways of doing their business and improving their revenue, reducing cost and improving customer satisfaction. Most managers want to make changes incrementally. So ability to “pilot” changes to a smaller segment of users, customers and products while continuing in traditional way with the larger base is of great value. That is ultimate flexibility.

Flexibility is not a mélange of features haphazardly put together.  I have seen many service companies developing “Flexible Product” by adding every feature they can see in other offerings. Invariably this leads to a mythical creature which does not work. If you put a Formula 1 Race engine in a Range Rover chassis with a Nano steering  and Maruti wheels you have a car which does not drive!! A Formula 1 car is intended for maximum speed and acceleration that is safe while a goods carrying vehicle is intended for maximum load carrying with optimum cost of fuel usage .

Delivering Flexibility requires heavy lifting in developing a good understanding of user’s domain, their intent and context. It adds value by simplifying the feature set and matching users intent and context.. If we can use our imagination and understanding of technology trends and capability to provide more then users have visualized we can lead them to newer ways. Leadership is an important way to differentiate your product. Invest in doing this and reap benefits.

Guest Post by Arvind Tiwary

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20th #PlayBookRT at Chennai: Sales war stories from 2 SaaS start-ups

An interesting discussion on the theme of ‘Sales’ happened last weekend at Chennai (Orangescape office) as part of the iSpirt round table. Shashank N D from Practo and Girish Rowjee from Greytip gave engaging presentations on their journey and the ~20 participants responded enthusiastically with several interruptions (read questions :)). [Note: A similar discussion in Bengaluru was covered earlier here]

Sales Stage - PractoShashank wooed the audience by starting off with his story on the origins of Practo – when his dad had to undergo a knee operation and wanted to get 2nd opinion from another doctor abroad, he couldn’t send out the medical records electronically. Thus began a singular journey of using emerging technologies such as cloud and mobile to enhance patient experience.

Here are some key ‘Sales’ takeaways from his presentation:

  • Golden Rule: Never build something without making a sale. Practo always got a buy-in from existing or potential customers before actually building new features. This was true even in their early stages.

 

Selling and Coding should be the only activities.

    • Practo benefitted heavily from referrals. They did Zero cold calling and focused on delighting existing customers. The doctors who became customers of Practo were so happy with the product that they were happy to evangelize it amongst their peers
    • It is important that the founders bring on the early adopters. At Practo, the founders got the first 50 customers and in the process achieved Product/Market fit (took about an year). While this number may vary for each company, it is important to note that dedicated sales or marketing should be brought on only after this stage.
    • Shashank also talked about evolution of the sales team over the years. While founders are the best sales persons in the initial stage, it is important to bring P-salesmen (P for Passionate) at the next stage followed by R-salesmen (R for regular) for mass adoption.
    • While product-market fit was the focus during the first phase of going from 0 to 50 customers, the next phase focussed on sales culture. Bringing on P-salespeople, providing free trials for instant gratification of customers, value based selling etc were the highlights
    • Zero discount policy: Practo followed a strict no-discount policy. This actually helped them reduce bargaining behaviour and enabled them to be seen as high-value. But in the ensuing discussion on this topic, most agreed that this is based on the type of product, target market etc. Selling to large customers may not be possible without discounts.
    • ‘Instant Gratification’ was a key customer psychology aspect that Practo focussed on during its sales cycle. Practo provides a feature where the doctor will be able to send an SMS alert to the patient within 30 seconds. This feature became a star-attraction of the product and improved sales
    • Practo was one of the first companies in India to sell a SaaS product offline. Some blogs even mentioned that this was start-up graveyard but it eventually did work for Practo.
    • As a matter of principle, Practo did not focus on doctors/hospitals that did not have computer infrastructure. This gave focus to their sales process. Also, they did not target general physicians and focused on specialists such as dentists, dermatologists etc. Thus targeting really helped them
    • To set up appointments, Practo initially had their own salespeople calling as well as had an inside sales team (with many women!). But what eventually worked for them was to create territories and assigning salespeople to specific territories. Salesmen were then made responsible market intelligence, cold calling etc. Usually the salesperson has to wait at the hospital to meet the doctor in person (like a medical rep) for the first time. But subsequent meetings were all setup through follow-up calls and prior appointments.
    • Medical reps couldn’t deliver as salespeople. They did not have the mind-set to challenge the doctors. At Practo, the smarter and tech-savvy sales guys were more successful as they were about to demonstrate the value of the product/technology to the doctors.
    • After various experiments, Practo had a clear separation of hunting salesmen and farming salesmen. Also most sales guys sell one product.
    • It is important to incentivize salespeople to get maximum yields from them. They have now established something called ‘flyers club’ where top 3 performers can go to a destination of their choice on an annual basis
    • All new salespeople undergo a 1 week training program and are instilled the Practo way of sales. But they have observed that it takes nearly 3 months for them to reach an efficient state.
    • There was an interesting discussion on a question on reselling partners. Majority of the participants concluded that resellers cannot solve your sales problems. What they can do is to magnify your sales success story. Resellers also bring in warm leads and act as influencers.

Shashank from PractoInterestingly and rather ironically, the session concluded with a note that start-ups should not target other start-ups as customers except as early adopters or reference case studies!!

Product Management related takeaways from Practo:

  • Practo spent inordinate number of hours with doctors. The idea was to understand user behaviour, just seeing them go about doing their work, how they interact with the software etc.
  • Practo had an interesting philosophy for feature prioritization – their order of importance was product vision, customers, employees and finally investors! Thus even when customers gave multiple feature requests, only those that aligned with the vision got implemented
  • Practo has lot of focus on analysing product usage, customer data etc. They built in-house tools (eg: epicentre) to monitor usage. Even during early stages when they had just 3 developers, one of them was purely focused on tools. Shashank calls it their ‘secret sauce’ for success.
  • They had a 30% conversion rate for face-to-face trial to paying customer.

IMG_2567The presentation on Practo was followed by a short session on Girish’s entrepreneurial journey with a few nuggets on sales related topics. Unlike Practo, Greytip did not have field salesmen and they went the online sales route for their payroll management software. It took them 2 years to realize that this model will not work well in India – not because of any issues on their side – but the market just did not buy without salesmen. Girish added that many of the emails that they send out are never read by the payroll in-charge. In fact, Greytip realized that CEOs may be more interested in such payroll software but the payroll head did not have the vision or mind-set to think of such possibilities. Thus began a journey of attempting to educate the target segment and build credibility in the process. Greytip also built relationships with payroll processors. Since the competition in payroll processing was cut-throat, their pricing was in fact determined by the market.

IMG_2568The following links were highly recommended during the discussion:

 

Guest Post Contributed by Karthik V, a software product enthusiast with degrees from IIT & IIM

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Being Lean: Being Flat: Being Beautiful!

In this blog we look at the ever changing dynamics of organizations today, especially product organizations in India. Implementing lean and agile practices have become common practice across the enterprise, let us look at some examples and see how some organizations are changing.

• In a three year product company somewhere in Bangalore, there were 25 people out of whom 18 were managers.
• In Hyderabad there is a product company of 1000 people where there are 15 levels of management that was found.
• Culturally too Indians often prefer positions of power. The higher you are and the more people that report to you, the more important you are deemed socially and organizationally.

Such organizations over time start collecting waste. The seven wastes as per lean

  1. Defects
  2. Overproduction
  3. 
Transportation
  4. 
Waiting
  5. 
Inventory
  6. 
Motion
  7. 
Processing

In organizations like the ones above excessive process and meetings cause delays resulting in a lot of waiting. There is no clarity often to people on how what they are doing is fitting the big picture. Hence there is too much inventory of features, too much process overkill. Most product companies end up releasing a typical product over a one year life span.

On the other hand start-ups suffer the reverse syndrome. They often have one person initially who has a dream and one person whose job is to convert the dream to money. In between there are many smart people and they figure out a version one of the product. Very soon most start-ups crumble due to not having any formal structure . This has resulted in newer practices like Lean Startup popularised by Eric Ries.

Organizations in the new era are in the business of delighting customers, are consciously making an effort to move towards shunning the centralized tall hierarchical structures and instead work towards building a structure that’s flatter and decentralized and one that promotes self-organized groups, with interchangeable members, focused on smaller projects. With an objective to get closer to the market and act faster, this change is not just happening to the start-ups but it is being welcomed by some of top companies of the world!

This does not mean complete loss of control. Take the case of Skype a well- known provider of telecom services. As they started growing bigger they got into issues of confusion and waste.
In all these cases lean practices and principles come to make a huge difference to the effectiveness and overall customer satisfaction of and customers and employees. One common mistake organizations do is they do not know when to not add more features to the product. Due to this delays happen and nothing ships.

A Global consulting firm known worldwide for its business consultancy went agile and implemented many of the lean principles. In this organization in New York and New Delhi now there are really large open rooms and no more manager cabins. The director sits opposite to the help desk person often.

An American Bank, one of world’s largest and also having a technology organization, is no different and when we walked into their facility in Chennai you do see an impressive site, where all the senior and junior members are seated together. The team navigated though the organisation challenges and politics to create an award winning cash management/liquidity solution based on agile development and testing practices.

SolutionsIQ India Consulting Services , a leading Agile consulting and development company has an flat structure and everyone sits in a large open room. The company is as flat as it can get and no one tells the members of the organization what to do! There is no micro- management. Instead each member knows the value that he/she will bring as a part of the organization and works at his/her own space and independence and on projects and activities that they like and add value to.

All are encouraged to use titles they like as titles are not what is important here, it is what you know and how you help others to become like you.

These are not tactics or techniques to save costs or make money; it is a way of thinking, it is a way of living and growing as an organization. It is not about building an organization only but also scaling to the next level with lean.

Lean as a practice was popularized by Toyota and has been followed by manufacturing industry for years. Agile practices on the other hand have been popularized by the industry. SolutionsIQ along with many other volunteers across India are hosting a 200 people conference where lean andAgile practitioners from manufacturing, automobile, services and start-ups community are coming together to discuss, debate and learn together the art of building awesome products that create lasting impressions on your customers just like Skype, IPhone or Facebook

Don’t miss your chance to learn, speak and listen to the global experts in Lean and Agile Thinking.
Be there at the Lean India Summit 2013 in Bangalore, on the 15th and 16th of November at Vivanta by Taj, MG Road, Bangalore.

Guest Post by Vibhu Srinivasan

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Building products to last – Can it increase your valuation?

The inspiration for this article came up from the animated discussion that’s going on at the Product Nation discussion Forum on ‘Customized Product’ – A true Oxymoron.  We all know that customization is bad, and well architected extensions are the way to go. However, I decided to pursue on what ‘well architected’ really means, and what it means for the product business. The answer that came up is that – ‘being built to last’ should logically lead to better valuations. The question is – Does it really?

In the enterprise software world, where one is building large applications, it makes sense to build applications that last. In the consumer app world, it may be better to rewrite when changes occur, but not so in the enterprise world. Some of the best enterprise products out there in the market were built with an underlying framework, with an  aim for extensibility and for lasting for long, through decades of change. The underlying product engineering is often proprietary, but aims for certain business goals. All of these goals point to one thing – built to last. Ravages of market focus changes, technology change, functional changes, version changes, and interface changes can still note disrupt the product capability. When products are engineered for this, it allows the business leadership to change their strategies through time, making the product enduring, lasting and hence multiply. Business goals are not derailed by ‘technical surprises’ but actually allow quick leveraging of new paradigms as they keep coming.

From a valuation perspective can you convince your investor to look at a 10 year horizon of returns because you have a ‘built to last’ product, instead of a 4-5 year horizon that is considered based on current market knowledge? Ideal world? Not really. When they say a product is mature, being ‘built to last’ is what it truly means, and there are great products that do these. It takes some more time, effort, cost and vision to architect such products, but the investment is well worth it, if it’s a long term play in a market.

Is it built for functional extendibility?

Functional extendibility is when the product designers know in advance that certain parts of the product always vary by customer, while the core stays the same, and they architect for the changing areas. Here rule builders, formula builders and tax tables enable customer, industry and country specific variations to be handled through ‘meta data’. Changing leave policies, income tax rules, price rules are some good examples where variation is built into good products

Is it built for technical extendibility?

Often, it is difficult to predict the changes that customers need. With an intent to protect the core, and to easily allow consultants to extend the product, extendibility tools are built into many products. View builders, alert builders, email trigger builders, add on extension screens, add on logic builders, and text label changes are some popular extendibility tools available in good products

Built for version upgrades?

Customers and your market expects upgrades. Upgrades are minor and major. Minor upgrades enable installation without the customer knowing. Major upgrades involve data migration. In the Cloud era, one is continuously migrating customers. How can changes be applied and yet allow versions to keep moving seamlessly?

Built for geographical variation?

The initial product may be built for a country and a language, but as time zones, languages, currencies, decimal place handling and other cultural aspects change, can the product easily adapt?

Built for UI diversity?

This was has become exceptionally critical now. How does one use the same product to handle form factors that keep changing. Responsive design is the current flavor of response to changing form factors, but we can expect many more shocks as interface changes innovations in voice recognition, internet of things and 3D interaction start coming in.

Built for maintainability?

One can build great products with a spaghetti of code, or one can beautifully architect products using techniques like model based development, or well defined objects designed for reuse. The true test comes when a change is required across the board. Well designed code is easy to change and upgrade.

Is it built for technology and deployment changes?

Flavor of the year programming languages, temporarily successful platforms, and nifty user interfaces keep improving, but when it is not possible to rewrite the core system, what do architects do? They usually ‘layer’. They allow a whole layer to be replaced to do new things with new platforms. A very popular product has kept its core intact as it moved from the mainframe, mini, PC LAN, Web and now the Cloud eras. Amazing engineering!

Built for scalability?

Can it work on a laptop for a demo, on the server for a group and also scalable on the Cloud to a very large number of users on a multi-tenant environment? The scalability capability is usually related to the platform the product is built on, where the engineering allows the scalability features of the underlying platform to be leveraged easily.

Yet not over engineered

Somewhere, the engineering has to stop and the economics has to step in. Every layer of abstraction added to handle change also creates a layer of pre-configuration before a product is customer usage ready. Finally it is a question of balancing the engineering to the business goals and budget.

Having been involved in product management and functional architecture decisions in Ramco’s products in the 90’s, and the KServe range of Enterprise products (www.KServeHRMS.com, www.KServeERP.com ) as an entrepreneur during the past 10 years, I’ve seen that  the long range value of being built to last is  often not understood or appreciated fully by stakeholders. With valuations and investment return expectations being short, there is merit in not over engineering, but there definitely a merit  in the ‘right’ level of being built to last. Finally, you are accountable to satisfy and delight your customer and your market, and yet deliver returns to your stakeholders, and being built to last can be your long term ally through ups and downs of the business environment.

Guest Post by George Vettath, Kallos Solutions

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You’re Not Fully Utilizing Social for your Business

Sure, your business has a Facebook fan page and maybe you even have a Twitter handle. Congratulations! You’re now one of hundreds of millions of people using social media and odds are, your business is getting lost in the shuffle.

If you’re not fully utilizing social for your business you’re missing opportunities. Here are a few ways your business is a big Fail Whale (if you don’t understand the reference you’re not fully utilizing social!) and some things you can do to fix it.

Facebook:

Your business has a fan page, not a business page, right? A fan page allows you to be more dynamic in your branding efforts and there are all kinds of cool features your business can use to gain recognition. Not only should you have a page, you should be adding content daily. Whether it’s status updates, photos, or likes, you need to be active on Facebook.

Additionally, you need to be sure you’re giving and not just taking on Facebook. Engage with your fans, “like” other businesses and in general, reach out twice as much as you release new content. The key to effective social media marketing is building an audience slowly, and Facebook has the biggest audience.

Features to use: Promoted Posts, offers, dynamic header image

Twitter:

Your Twitter page should look as polished as possible and you need to spend some time getting more followers. Don’t buy followers – simply start following and engaging with other Twitter users and you’ll slowly add to your numbers.

The worst thing you can do on Twitter is be too promotional. As a rule, keep promotional Tweets to a minimum and concentrate instead of building your brand by Tweeting relevant industry posts, news stories, and editorial opinions. Don’t hesitate to post pictures and remember, you should be Tweeting multiple times a day!

Features to use: Retweet, reply (talk directly to customers), promoted Tweets

Pinterest:

If your customers base skews heavily female, you need to be on Pinterest. Make sure you’re posting photos often and your photos are high quality and show the brand in a professional light! If you’re more into authenticity and grit, use Instagram instead. On Pinterest, your branded content needs to be useful. Offer recipes, tips, and photos of ways people can use your product or service they may not have considered.

Be sure you spend time following other people’s boards, as well as other companies’. And don’t forget to spend time Pinning things to your own account that help fill out your brand identity. Not everything you pin has to be from your own company’s website!

Features to use: Like, repin, “Boards to Follow,” Pinterest app

YouTube:

What do you mean you’re not making YouTube videos? YouTube gets over a billion hits PER DAY. Mobile is big here, so keep your videos short, unpolished, and imminently usable. You should tie your YouTube channel in with your Google+ account to help with overall SEO and you should be posting often, about once a week if you can.

Features to use: Analytics, promoted video, cross-promotion with sites like Buzzfeed

Whatever you’re doing on social, you could be doing more. The more time and effort you put into social media the more benefit your business is going to get out. And remember: social is a two-way street! You’ve got to interact with other people and brands, too, and not expect everyone to come to you. Social only works when you engage.

Guest Post: Ryan is a product manager at BizShark.com, with 5 years experience in online marketing and product development.  In addition to web related businesses, he also enjoys the latest news and information on emerging technologies and open source projects.

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Clearing The Air: 3 Roles Indian IT Providers See as Product Management

The Indian IT industry is over $100bn, but still struggles in creating global IT products.  While there has been the occasional Tally, Ramco, or Finacle, there is not much else.  One critical reason I attribute this to is that Indian IT companies do not really understand how Product Management can create long term customer value and business sustainability.  While one can argue that there have been more of these companies in the last 5 years (Livemint: Tech Startups), the next 5 years will determine whether India has actually created global products.

Most Indian companies view product management as either of these: Product development, delivery (or project) management, and marketing (or marketing communications).

Role 1: Product Development:  Great at problem solving, developers are expected to provide insights on what they believe the customer wants, and create products based on their understanding.  Let’s admit, very few developers are comfortable socializing with customers (aka Raj Koothrapalli – awkwardness multiplied a few times).  I have often encountered developers spending hours defining products, with limited idea on how the customer environments actually are (a few minutes meeting customers would have saved those hours).  The smarter ones are able to engage with customers, but put them in front of a business strategy plan, and things slow down again.  BTW, this may work for startups, where the founder often has a clear intuition about the idea, but when they have to scale revenues up (to new customers or increased wallet share of existing customers), most struggle.

Role 2: Delivery (or Project) Management: They engage with customers and internal teams, to co-ordinate schedules and resources.  However, expecting them to gather requirements because they are engaged with customers, based on which products are created, is better suited for an IT services delivery, not for sustainable product IP creation.  Today, most Indian SI companies are struggling as they attempt to create product IP and value, because of this belief and expectation from delivery managers to “productize” based on customer specific projects.

Delivery and Services Approach

Role 3: Marketing (or Marketing Communications): Marketing teams are definitely engaged with the market, but most are focused on lead generation and marketing communications, and the execution of those plans, rather than gather actual feedback.  Thus, what we get are customer leads, with very little investment in market research aligned with direct customer engagement.  Recall the last time you attended an IT vendor’s event, and exchanged business cards with their marketing person – I can’t!

As long as Indian IT companies continue to depend solely on one of the above to help create long term products, they are going to struggle in creating global products, and building the valuations that Apple / Microsoft / Google / Salesforce (and many others) have.

I end with my definition of Product Management – engagement with the market and customers, through multiple channels, to understand stated and unstated needs, analyze the potential opportunities, align with corporate strategy, and work with sales, marketing,  and development teams, to translate the needs into a multi year product roadmap, eventually creating products that customers desire (read Apple, though the approach may have been slightly different 🙂 )

If your current teams are geared and empowered to do this effectively, time and again, then you maybe in the right direction to be hailed as an Indian product company (if not already) soon.

Guest Post by Angira Agrawal, AVP and Country Head – Cloud atNEC India Pvt. Ltd

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Insights from the Sales Playbook RoundTable Led by Ambarish, Knowlarity in Gurgaon

The second Sales Playbook RoundTable in Delhi-NCR was held at EKO office in Gurgaon, led by Ambarish Gupta– CEO/Founder, Knowlarity Communications. About 10 companies attended the meet such as EKO, Easework, Busy, Yippster, Conixevus and few more. The format was quite engaging and action oriented as participants were asked to come with their own set of sales challenges for the RT. The session started with a brief introduction and the specific challenges participants were facing.  There was a good degree of overlap among sales challenges of different organizations. The common theme emerging out of the challenges can be divided into three categories – Profit margin, Velocity of Sales & Scaling up. I’m listing down few of the actionable learning discussed

Improving Profit margin:- 

There was unanimous agreement over the core purpose of business among participants i.e to make profit which is a very elementary mathematical equation i.e difference between revenue from a unit customer & cost of serving a unit customer. Even if somebody is making revenue, he may choose to leave a particular customer if cost of serving customer is more than revenue. Exceptions are always there if the unprofitable customer is a source of bringing other profitable customers. Organizations should have real time view of profitability of different customer segments and may focus on segments with maximum profitability. While formulating any pricing strategy, the above mentioned formula should be kept in mind.

  1. The most important point in improving profitability is to understand the sustainable value coming out from the different customer segments & know associated risks. For example- startups as a major customer base are not good for companies because most of them die in a year so average cost of acquisition & serving is always going to be more than the average revenue for these customers. Similarly, up gradation to the existing customer may enhance profit margin significantly.
  2. Ask the customers to pay for the product you are providing, you will be getting right kind of feedback about product & business model, if majority is not willing to pay, it’s a red flag and one may need to modify the business model & product
  3. The pricing model should be taking care of mind set of customers so if the target customers are not in a position to shell out big amount of money, the pay as you go model may be applied with known risk that churning of customers is going to be high risk for the company.
  4. Payment term is also quite important, For example – Even in SaaS model once can ask for yearly payment rather than collecting on monthly basis. It has got several advantages-a) Advance cash flow b) reduced tension & effort of collecting money c) you have got a time in which you can make customers use the product and take benefit out of product.
  5. Make customers’ use the product so that they can feel the business benefit. A happy customer’s life time value is quite high for the company. The companies need to make as many happy customers as possible as a brand ambassador so after getting word of mouth publicity /referrals the cost of acquiring customers reduces significantly resulting in better profit margin for the company in long run.

Enhancing Velocity of Sales:-

A lot of participants expressed their concern about increased sales cycle and discussed the ways to reduce the cycle time & find a right process for reaching out to prospects.

  1. Network is very important in finding first few customers; it was observed that most of the companies got first few clients from personal network which resulted in an early traction for products.  So build a network of mutually beneficial relationship much before you try to reap the benefits.
  2. For reducing the time cycle, team should focus on finding the person in the target companies who is feeling the maximum pain for the problems you are going to solve and identify the decision maker such as CEO/CMO.
  3. For finding the relevant personal details such as mobile no. /email id internal to an organization, various tactics may be employed such as finding details from LinkedIn & Naukri profile, calling the board member as a journalist for interview etc.
  4. It is always advisable for going through a referral route if available so that the prospects would be in a frame of mind to hear. Moreover, while interacting on phone for the first time, you have just first 30 seconds to impress, be precise to what you are going to deliver in terms of benefits not about details of products. You will be getting enough time and a meeting with all the key executives if you can hold call for first 30 seconds.  The benefits should be clearly leading to either increasing the revenue or reducing the cost in direct or indirect ways such as, “I will help you in making additional money from existing customers” or “I will reduce the cost of serving to your existing customers”.
  5. If your product is new in market, one needs to identify the early adopters who are willing to take chances for launching the product with assessment of the probable competition, barrier to entry, market potential & preferred business/ revenue model in different markets.
  6. If the product is a replacement of the existing product then value from the replacement product should be of at least 10x more value than that of the existing product. The product companies need to understand & answer the key questions- why people should be replacing existing system/products? The mindset of a customer is always going to maximize the value per unit cost. One needs to find a solution of this puzzle for individual prospects before reaching them so one needs to concentrate on understanding the pain points with existing product and how to help prospects with those pain points while still providing the others as usual benefits to the customers.
  7. Both tangible and intangible value should be taken into consideration while evaluating overall value to the customer. One needs to be very careful if you are changing the path of doing business as usual for the prospects as there would be a degree of difficulty in doing something new for the customers. This is going to create negative value to the prospects.
  8. Keep customers / prospects engaged in a personalized way such as sending some information that may or may not be relevant to the product but may help prospect. Always keep a updated social profiling of the prospects from Facebook, Twitter and LinkedIn and find an excuse to follow up such as Congratulations for getting award etc. One need to understand that we are dealing with human beings not machines so clubbing of trust and emotions is extremely important to reduce sales cycle.
  9. The first point of interaction with customer is what you are going to provide. Talk to the customers in a language they can understand rather than focusing on product and features, it comes later in answering to the question how you are going to provide. For example- Our product will reduce the serving cost per customer in call center from 50 paisa to 10 paisa or our product is going to help in your business conversion by x% that is going to increase your revenue by y%.
  10. Even from the same target customer segment, different prospects are at the different stage of the sales cycle so marketing pitch should be in line with different stages in a sales cycle i.e Awareness – attract – Engage- Convert – Happy customer – Referral / word of mouth – new customers and so on.

Scaling up:-

  1. Product companies should connect to prospects to understand the pain points of the customers rather than building a perfect product with no market requirements. They should start talking with customers even if the product is not ready to receive valuable feedback.
  2. Time to make entry in the market is quite important as  it decides the opportunity windows of a company to tap maximum benefits in minimum time & effort
  3. The system & processes during the early stage of startup should be highly flexible. After a certain period the same flexible system should be converted into process driven system to run the show. Therefore, one should evaluate & understand the system / processes / resource that are needed to drive the expected sales after scaling up & manage the changes from the existing level to the future level smoothly.
  4. One needs to find the sales model that is highly effective and scalable after market test and multiple iterations. Once you have found the right kind of value proposition and target set of customers for that value proposition with effective sales channels, you can scale up same model exponentially.
  5. The choice of domestic vs. international market is quite tricky. In developing market competition is less, quality expectation is less, market potential is high but customers are not willing to pay so ticket size is small. One of the biggest obstacles is the mind-set of customers in developing market. However in developed market ticket size is high, less hurdles with mind-set but competition is intense with very high expectations on front of quality. So considering these two facts one can take domestic market as a test market for testing and enhancing the product. Once it reaches the level of international standard, one can make international markets as the primary source of revenue. Jumping to international market without having a tested product may block all the future chances in that market forever.
  6. The selection of appropriate sales channel may be explored after trying established model such as telesales, channel, face to face & enterprise sales. Only after market testing, one can determine the right way to get more profitable customer at lower costs.
  7. The product companies need to create a sustainable source of inbound leads rather than outbound leads to improve efficiency of the sales system. Sales people should not be engage with every potential customer, they should be getting filtered list of potential customer for engaging & converting
  8. Another basic question is how customers are going to discover you? One needs to see the whole picture from the lens of customers for scaling up. Depending upon the computer literacy of the targeted customer offline or online or combination of marketing tactics may be deployed. For example- if customers are searching heavily over internet for the keywords associated with the products- Google organic and paid search could be good idea to hook the prospects. However if the search volume is less then display tactics may be needed to create the awareness among targets & later for hooking.
  9. The product companies need to understand the mindset of channel partners and dynamics that is happening in the channel partner industry. As profitability is going down, existing good partners may be looking out for new streams of revenue. So, they would be happy to work on a more profitable venture for taking a new product to the market. Apart from that capability, influence into target market and willingness to sell must be evaluated for potential partners.
  10. The big channel partner may not be a good partner unless the new product can create immediate good streams of revenue for them, so small partners would a preferred set of partners because they would be devoting dedicated time even for small revenue however the impact on company’s revenue per partner would be limited so number of such working partners come into picture for getting maximum revenue in a given time.

These insights were the result of the sales round table meet. The round table meet ends with a promise of meeting again for discussing and sharing experience again in coming month. Thanks to  iSPIRT ProductNation in being instrumental for building core competence in product organizations.

Guest Post by Manoj Kumar, a volunteer for ProductNation

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Building a Customer Focused Technology Business

Building a successful technology business requires an organization to have a clear strategy that connects several dots. From Market Place Relationships, Technology and Product Capabilities, Empathizing and Understanding Client Needs and Building Successful Business Models that create win-win-win relationships.

Strategizing in a dynamic ever changing market place requires several sub-strategies working with each other. These sub-strategies are united in their orientation by a strong team that delivers value and ROI to customers and fundamentally use that value to drive the strategy train to create a superior business organization.

These sub-strategies can be powered by groups within a single business unit or groups working across multiple business units. In fact, it is entirely possible that different process teams may work together simultaneously powering market place strategies focused on different markets and solutions.

To a client looking at the organization, what is visible is a perfectly choreographed interaction with a relationship manager that offers a compelling business and technology stack that comprises of a well defined problem space, a compelling well positioned solution based on a product and technology platform that delivers value at each level of the stack.

The business itself is organized into technology, product and solution groups simultaneously working on multiple business opportunities through carefully orchestrated business processes.

Such a customer focused organization delivers the rich feeling of a customized solution with the efficiency of a generalized product.

You can build a customer focused organization and yet win in the competitive market place through a generalized delivery platform. Here are some useful guidelines to follow:

  1. Clearly define the market places in terms of problem space, competition and your own solution position. Make a list !
  2. Have a dedicated business development manager well versed with at least 1, possible more of the solutions located close to the market
  3. Put a solid workflow management process in place to receive problem statements and create solution proposals driven by the business development manager acting in concert with the customer
  4. Build agile solution teams that build customized solutions quickly from verticalized solution platforms
  5. Build strong technology and product groups that work with solution teams and ship frequent product releases every 6-8 weeks
  6. Build a powerful support group with a mature director that can provide strong pre and post-sales support
  7. Invest in R&D, raise R&D funding and look out for collaboration opportunities.
  8. Build a strong and disciplined inside sales force

That for you is a text book approach for building successful technology companies.

About The Author(s):

Prasad Bulusu is a CFO at Sankhya Technologies Private Limited. He is a blogger and offers consulting services to hi-tech organizations. He also mentors startups. You may reach him at [email protected]

Gopi Kumar Bulusu is the CEO and Chief Technologist at Sankhya Technologies Private Limited. He may be reached at [email protected]

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Indian Entrepreneurs & The Happy Confused Stage

Last week, I met Sharad Sharma, an angel investor & the prime mover behind the iSPIRT, a think tank for software product startups. For those who have been into software products, he is a familiar face. We’ve met many times before but this time around, we talked about the dangers of mass entrepreneurship, which I’ll keep for a later post. That’s because I stumbled upon a more pressing issue, particularly painful to the Indian entrepreneur: The Happy Confused Phase. I’ll try and paraphrase some parts of the discussion here with a few additions of my own.

What is the happy confused phase?

The happy confused phase comes after the entrepreneur has discovered his customer and found a product market fit. Ideally, a startup would now be ready for the growth execution phase. But in India, the happy confused phase takes over. In mature markets, after finding the product market fit, an entrepreneur hires a team to execute. In India, you can hardly find the right talent (for various reasons). So then, it is up to the entrepreneur to train the existing team and the transition takes longer than you would imagine. This in-between phase, is called the happy confused phase.

Implications of this stage

“The execution team is hard to find in most cases and you end up retraining existing staff to do execution,” Sharad says. This is time consuming. Unless you cross this happy confused phase, most Indian VCs won’t fund you despite having found the product-market fit. Indian VC’s won’t come into a deal too early because they have their exits which is time bound in nature, to take care of. Running out of money is one of the many things that can go wrong in a startup.

Who can help?

Accelerators can help. But there is another problem here. Accelerators in India are time based. Which means, when they run out of time, they have to send the startup away. This is one reason why you would have started hearing of “accelerator horror stories.” After time runs out, many will promise you support but it is flaky at best.

A four month acceleration period is hardly enough in Indian conditions. There are exceptions to this. However, the general idea is that accelerators, especially the ones that take equity in the company, must be stage based.

Mentors can help. Mentors in the same industry as yours, who can help you with deals, are very valuable. They can also help you find talent and customers. However, as veteran Silicon Valley investor Vinod Khosla pointed out at his talk in Bangalore, “It can’t be people who are sideline cheerleaders who have never taken risks.”

Focused events like Uncafe or Playbook Round Tables by iSPIRT can also help. These events help speed up learning. Peers and people who have been in your shoes can help you learn faster. The important phrase here is “ experiential learning,” and not “startup event.”

Conclusion

The existence of the happy confused phase is not the only issue that Indian product entrepreneur has to deal with. With Indian startups, the discovery phase is longer than usual as well. An informed product entrepreneur who is aware of these issues can hack his way through these stages better than his uninformed peers.

If you’ve been in a similar situation and have found a clever way out, leave a comment or write a guest post for us.

Reblogged from NextBigWhat – Post Contributed by Jayadevan

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Patent Holders Listen Up; The Government Wants to Give You An Award

India’s innovation problem is not something that an award can fix. But its a step in the right direction. The department of science and technology is calling applicants for the “National Awards for Commercializable Patents,” in a bid to make more innovative products available to the society [source]. The awards were first introduced two years ago.

The program seeks to recognize the innovative potential of Indian Nationals as well as Micro, Small and Medium Enterprises (MSMEs) who have developed innovations relevant to the industrial and societal needs.

The award will carry a sum of Rs 5 lakh and a certificate. Selected innovations may be also get an additional Rs 5 lakh on commercialization of the awarded patents. The selected innovators will also get to use the the TREMAP, a government initiated innovation program.

The primary objective of the program is to help commercialization of patented technologies and will give a greater emphasis to those that have good commercial potential but could not be commercialized due to lack of resources and expertise with the inventors. The other objective is to establish an enabling ecosystem in the country to facilitate linkages of the innovative technologies with market.

Any Indian national or micro/small /medium enterprise who already has an Indian patent can apply. The year of grant of patent should not be before the year 2010 and the working prototype should be ready.

In 2012, the award was granted to 8 patent holders including the ones that held the patents to improved grinding machine for paste and powder making in wet and dry condition of soft material and device for mitigating shock waves and induced forces during explosions.

The last date for receipt of applications is August 14, 2013 and more details and the forms can be found here.

The central government has also implemented a five year scheme through which small enterprises can claim up to 50% of patenting costs from the Government.

There are various reasons why commercial innovation is really low at Indian institutions. Deepam Mishra, CEO, i2india Ventures lists out factors including wrong incentives and lack of early stage investments among others. Hopefully, these initiatives will help at the early stage.

Reblogged from NextBigWhat.com

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Key SaaS product innovations to be showcased at Techcircle SaaS Forum on August 7 in Bengaluru

ProductNation is pleased to support Techcircle SaaS Forum, now in its second edition, which will be held on August 7 at Chancery Pavilion Hotel in Bengaluru. The conference will host a special session called Techcircle Runway where handpicked SaaS products and companies will be showcased.

Techcircle Runway presentations will cover product details, innovations, market opportunities, business models and how these products will disrupt existing markets to create value, followed by live feedback and Q&A with a panel of jury members. Each presenter will have five minutes on stage.

If you are a SaaS product/company and would like to showcase your innovation at Techcircle Runway, you can click here to fill the application form. For any query, contact Kanika at [email protected] or call 0120-4171111. Click here for more details about the event.

While mapping the opportunities in this sector, Techcircle SaaS Forum 2013 will bring together more than 150 stakeholders, including CEOs representing top and  emerging SaaS firms, innovators as well as private equity and venture capital investors betting on this space. Click here for more details.

Read the complete post here.

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Why every start-up needs a repeatable & scalable sales model?

Start-ups in their mid-growth stage are usually faced with an inflection point, where they find themselves standing in the middle of a transition – from having a bright product idea endorsed by a handful of people (usually investors & early customers) towards a scalable solution that can be sold to anyone.

Geoffrey Moore’s work in the book titled ‘Crossing the Chasm’ is pertinent to this transition that exists between early adopters and the early majority of a product in the technology adoption life cycle. Companies having a logical and repeatable sales process, backed by a validated product can succeed in any economic scenario.

Initial sales can help a company in determining whether the product/market fit is in place. The next and the most crucial step towards achieving scalability is to know that their product requires little to no customization to go from 1 to 10 to 10,000 customers quickly. Start-ups need to have a consistent process in place, which is embraced by the whole team to ensure smooth execution. This, in turn will help in having an element of predictability in the decisions and forecasting that the entrepreneur makes. The most essential characteristics of an ideal sales process are scalability, repeatability, and sustainability.

Most start-ups have developed somewhat of an ad-hoc sales process. That is, they have a process that they follow, though there isn’t any documentation for the same. For instance, if in a small sales team, all sales reps are asked about the process that they follow to approach and close a prospective client, one can be sure of coming up with a number of different approaches. At the core of such approaches are processes which are, more often than not, inconsistent with one another’s and sometimes not even in sync with the company’s vision. The key to scaling the sales process is establishing a well-documented and clearly repeatable process which can be adopted by new hires from day one, which makes them as productive as the existing sales team.

Once such a process is put in place, it is easier to establish a predictable, direct relationship between increasing the size of the sales team and targeting more geographies on one hand, and increased revenues on the other.

These are the most natural benefits of having a repeatable sales process in place for any start-up:

Enables closed-loop learning

Ideally, the sales process should begin with leads being generated from the inbound marketing team, and conclude in a closed-loop manner with feedback from the end-user. This setup makes sure that all the stakeholders are involved throughout the process, and also facilitates organization-wide learning and development.

Takes funnel metrics into consideration

It’s important to know the kind of conversion rates one is experiencing at every stage of their sales funnel and what are the various factors that affect these rates. For instance, different lead sources can result into different kinds of conversion rates. This kind of analysis is also useful in determining the most cost effective, or cost ineffective customer acquisition channels and can help in improving the marketing ROI.

Takes into account the Return on Investment

As most start-ups are bootstrapped, Return on Investment (ROI) becomes a significant aspect to watch out for. Only in case the expected value of business over the anticipated duration of a customer’s association with the company is manifold vis-à-vis their initial acquisition cost, is the association economically viable.

For any sales process to be scalable, it’s essential that the marketing function is identified as the primary source for fresh leads and it is well understood within the company that the primary job of a sales person is not to create new opportunities, but to sell and close business where such opportunities already exist.

Guest Post by Mohit Sharma – Lead, Marketing & Business Development function at PromptCloud. PromptCloud is a Bangalore-based firm dealing with Big Data solutions; where an integral part is large-scale web crawling and data extraction. It uses its cloud-based Data-as-a-Service (DaaS) engine for performing big data acquisitions. Views expressed are his personal, and do not necessarily reflect those of his employer