How to scale your startup successfully and make it Virat !

An iSPIRT Playbook round table

Virat-KohliSo India won against Pakistan in the world cup match….again. I’m sure none of you would have missed it for the world. As you watched every ball with your heart in the mouth, you would have noticed some players performed while others faltered. But in the midst of it, one man stood tall. Virat Kohli, once again proved that he can perform in the toughest of conditions against the best of teams. So what makes Virat Kohli click where other great batsmen stumble ?

Similarly, you see some startups stagnate while others scale consistently. Is there any method to this madness ?

Successful startups who scale are ones who continuously try to improvise, holding on to their strenghts while improving their weaknesses. They build a process driven organisation fixing bottlenecks as they grow. Virat Kohli also worked hard to improve as a batsman, mastering his weakness against the short ball, and learning new strokes even though he was successful without them. Every player starts his international journey with a few apparent flaws. While some work diligently to remove them, others work around them. Then there are those who become victims of their own flaws before they can eliminate them. Similarly, startups who take early success for granted, fall and ultimately perish.

So how do I successfully scale my startup ? When do I know that I’m ready to scale ? Which countries and verticals do I expand?

Should I grow organically or inorganically ? Is enterprise selling important ? How do I build a successful sales team with predictable pipeline ? How does channel sales work? All this many such pertinent questions must be bothering you when think of scaling your startup !

This is why a bunch of successful startup founders met to discuss and understand the process to scale. The 63rd iSPIRT round table on “Scaling Revenues” was led by Aneesh Reddy, CEO Capillary technologies on 13th March, 2106 at Knowlarity, Cybercity office. Ambarish Gupta CEO Knowlarity was the host and also a participant. I was fortunate to participate as an iSPIRT volunteer and met some of the great startup founders there.

RT-Atendees

The list of attendees are as mentioned below:

  1. Ajay Chauhan @salezshark.com
  2. Anand Krushnan @exclusife.com
  3. Aniruddh Jain @salespatron.com,
  4. Bishal Lachhiramka @drishti-soft.com,
  5. Dinesh Gupta @busy.in,
  6. Sachin Bhatia @drishti-soft.com,
  7. Sakshi @posist.com,
  8. Vishal Bansal  @zenatix.com,
  9. Tushar Bhatia @empxtrack.com,
  10. Kushal @fareye.in,
  11. Subrat Kar @vidooly.com,
  12. Samit Arora @salespanda.com,
  13. Rajat Harlalka @iSPIRT volunteer
  14. Ketan @Mettl

RT leader Aneesh [email protected]capillerytech.com

Host &  Ambarish Gupta @knowlarity.com

Lets look at some of the key points discussed in the round table on “Scaling Revenues”

One of the first fundamentals you want to know is that when do you know you are ready to scale ?

Every startup goes through establishing its niche or the product market fit, wherein you get your first 100 paying customers who are not your family and friends. These are customers who know that you are addressing their painpoint and yours is not just a good to have solution. It is very important to ensure you get it right else all your scaling efforts will be futile. Like ‘Steven Covey ‘ in his book 7 habits of highly effective people says “ If the ladder is not leaning against the right wall, every step we take just gets us to the wrong place – faster.”

Now that you are ready to run, faster than the fastest, which market do you expand. India being an easy access, most SaaS founders start with India unless they have a cofounder in US or some associates. So is India the right market to start with ? There are multiple schools of thoughts here. Like Ambarish from knowlarity mentined that they built the company with clients from India and scaled it to a level where their core sales team and processes were established. The initial days of scaling are tough so if you have good acess to clients it can be really useful. Knowlarity then expanded to similar geo’s like Phillipines, Singapore and Malaysia which are english speaking and have similar business culture like India and other ASEAN countries.

Others like Aneesh from Capillary, Tushar Bhatia from Empxtrack and Sachin Bhatia from InsideSalesBox, prefered pitching to US clients first as they see a higher demand and buying maturity in clients there. One of the common observation the group had was that in US you will see only genuine prospects engaging with you so while the pipeline might take time to build, the conversions are better if the value proposition is right. Indian and ASEAN clients are more open to discussion with longer cycle times and lower conversions. Beyond the ASEAN and US, Sachin Bhatia also shared his experience of selling to African clients. He having travelled to 34 countries is quite qualified to write a book on this subject…May be “Selling SaaS to Nomads” or something around it J

Another interesting aspect of selling to US clients came up from Abhinav from Innovacer (watch out, innovacer might be the next mu-sigma in the making ! ) who have mastered the art of leveraging US based events to build a pipeline. Abhinav shared how they build an US events calendar and take up nominal booths there to meet larger base of prospects there. Its well planned and meetings are lined up with delegates much in advance. Event particpation helps in spending time with prospects away from office workload wherein the clients are also in a frame of mind to evaluate options. But you need to ensure, enough homework is done and meetings are planned in advance. Sachin Bhatia also shared similar experiences and vouched for importance of event participation to reach US clients.

The next question was the importance of enterprise sales and larger deals. How do you increase your average deal size and sell higher to enterprise clients?

Lets admit it. Everyone likes enterprise clients. They have the apetite to invest big and also act as a testimony for your product to scale. Aneesh shared his experience around selling to enterprise customers. The deal ticket size can be increased in multiple ways . First – you scale horizontally ie you can upsell and cross-sell. Which means you need to build multiple product modules which can be sold to same clients over the years increasing the account revenue. Next you can scale vertically by intially selling to a pilot base and then expanding into the account. For eg you can sell it to 10 retail outlets and then expand to 200 later or sell to one office and then expand to other locations. Enterprise selling needs you to have the scale or options built into your value proposition. Build new complimentary offerings every year.

RT-attendees2Channel Management was the another crucial aspect discussed. Dinesh Gupta of Busy software(www.busy.in) led the discussion. Busy competes with Tally as a market leader. They built and scaled a product in a market where tally is a houseold name amongst Chartered accountants their key evangelists. Couple of important points amonst many pointed by Dinesh are here. Firstly, Identify partners for whom your product and revenue are substantial part of their business. In other workds they need to have their skin in the game. Otherwise you’ll end up having a lot of channel partners but no sales. The other important aspect of channel sales is to educate the partners. Education helps twofold. It creates a buy-in amonst the partners who can then sell better. Plus it helps them put the value proposition better in front of their customers. The group also discussed channel margins and how much to pay. While it was a long discussion, the crux of it was that you should pay partners well , may be more in initial days to get a foothold in new markets. It has to be enough of a motivation for them to sell. Subrat Krar from Vidooly also shared his experience on how they are leveraging marketing agencies as channel partners to expand their video analytics software.

The team also spent some time discussion the sales team structure, hiring VP of Sales and how to build a scalable predicable pipeline. From what I gathered, it seemed that setting up an inside sales team is no brainer. It’s a must have. How to ensure it delivers is a larger discussion for which you might want to talk to an expert amounst people above who have scaled or to Sachin bhatia who has a product in the same space. But to build a sustainable pipelines, you need to also put the right metrics in place for the sales team. Eg the inside sales team should be measured on fixed demos, the sales team on closures. Few participants discussed sales quotas for sellers ranging from 1:4 to 1:10 of the CTC. Tushar from Empxtrax and Ketan from Mettl also shared their insights and metrics on hiring costs and metrics.

Depending on the product and brand pull it may vary. Ultimately it should not be so much of stretch for the seller that he does not even feel like trying nor it should be so easy for him that he does not get the aldrelin rush while closing a deal. You need to find your sweet balance.

RT-atendees3Premium/Free Trial vs no pricing mentioned on website was another aspect discussed. Different people have different models but largely the group agreed that most are moving away from freemium and those targeting enterprise do not prefer to display the price on the site at all as it varies by scale and need of clients.

Aneesh also shared his views and experience on attaining inorganic growth. Capillery having recently acquired MartJack, an esablished online ecommerce software company was best placed to answer it. Aneesh mentioned that any new startup takes 1.5 to 2 years to establish their product market fit and then to scale to a level where they are ready for enterprise sales. If you want to continuously increase your client revenue share and grow the market, inorganic acquisitions help you in cutting the time to the market. This then helps you focus on other aspects of scale.

Overall another wonderful round table by iSPIRT. Need to thank our man Avinash for arranging the round table. He is like Tendulkar, silently but strongly delivers what his fans wantJ. Special thanks to Ambarish for hosting us at Knowlarity and for his insights into scaling startups. Finally, many thanks to Aneesh and Anant from Capillery for leading such an interative round table and sharing deep insights from their business.

Okay, enough of insights and tips. Lets get down to basics. What do you think is India’s chance to win this T20 world cup ? Fine, we lost to New Zealand in Nagpur but the same thing happened in 2011 (when India lost to South Africa in Nagpur) and we went on to the win the World Cup. We are now on a high after beating Pakistan. As Pakistani team would say “Goli se daar nahi lagta sahab, Kohli se lagta hain (Pakistan don’t fear bullets, they fear Kohli)” (courtesy Sehwag commentary)

But you guys have nothing to fear. Take the leap of faith as you step forward to take your startups to new heights.

Take your wings and set on to fly

You might stumble but that’s only when you try

Don’t just give up if you face a few bump

Coz harder the conflict the more glorious is the triump

Happy Scaling guys ! And India will surely Win the T20 World Cup !

49 Not Out ! Excerpts from Product Nation’s 49th Round Table on selling SaaS products to US customers

Pune… the city of life. It’s a place you can easily fall in love with. Fun loving yet grounded folks who talk sense. Light drizzle, clean roads and a young city full of aspiring students who want to change the world. So when Product Nation announced it Playtable in Pune I latched on to the opportunity. Avinash and his iSPIRT team have been doing some wonderful work over the years in leading the way for SaaS startups. The topic itself was close to my heart ” Nuts and bolts of selling to US market for B2B SaaS companies” and when you have the ‘Google of B2B SaaS marketing’ Suresh Sambandam conducting it, you don’t want to let it go. Google coz if you have a query he has the right answer. Over the years Suresh has done some real hardwork in taking Kissflow to 10000+ customers and he has fixed all those nuances of SaaS selling by getting into depth of it.

SalesSo on a pleasant Saturday morning , 30th May to be precise, we a bunch of 15 entrepreneurs and few aspiring ones gathered to know how to make it BIG by earning in dollars. United States is by far the biggest market for SaaS companies and if you get it right there you will make it BIG one day.

We started with basic introductions and brief product details. It’s really heartening to see how enterprising the current generation is. We guys today are proud to be entrepreneurs or employees of startups. It shows you can take risks, think outside the box and are not satisfied with status quo. I can surely see that the next gen of aspiring entrepreneurs will come from those who work with startups. And why not. If you can make a startup successful, you surely can build one for yourself.

Our workshop focused on B2B SaaS startups. How can you sell your B2B product to US customers sitting out of India? Yes, selling to them without even meeting them.

B2B selling has traditionally been about relationships, face to face meetings, getting to know your customers, value selling and all. But, cloud computing has totally disrupted the market. In fact it has expanded the IT  market globally. Today millions of SMB and mid market clients can  afford to automate their marketing, sales, operations etc using cloud solutions on SaaS model. And if your product can add value to their business they care a damn as to where you are based. I think we should thank the first generation B2B SaaS Startups like Zoho, Freshdesk, Kissflow, Druva etc who have built the trust and confidence in US customers that world class solutions can be delivered from India. We the 2nd generation now need to ensure that put our best foot forward in terms of quality of product and support when we reach out to them.

The views I’m sharing are a glimpse of insights given by Suresh and interactions during the round table . In between you’ll see important tips from suresh which I’m calling it KiSSTiP 🙂

To understand the process best we looked at it in a logical flow.

  • The Product
  • Market fitment
  • Pricing
  • Marketing
  • Sales
  • Customer success

The Product first – In SaaS marketing you need to have a good working product. Unlike face to face selling where you can do with ppt selling and bit of account mapping, SaaS needs the working product first. In fact you can use your product as a marketing tool building in features to engage, upsell and cross sell.  The important point is how do you position your product amongst three below :

  • Category Creator
  • Novel Approach to an existing well understood category
  • Low cost alternative

SaaSThe group agreed that a combination of 2 and 3 would be ideal to reach the right set of customers. Being a category creator – someone who creates a new market needs a lot of investment and F2F interaction. But low cost should not be confused with cheap. We need to build solutions with world class quality at minimal cost thereby passing the benefits to the customers. That creates high value product for them.

Next comes the market definition. Suresh shared the segmentation based on number of employees into SOHO(1-10), VSMB(10-50),SMB(50-500),mid market (500-5000) and enterprise (5000+). The sweet spot for SaaS marketing lies in the SMB and mid market space. In terms of who decides on buying your product, in SMB whosoever may be evaluating, the founder or owner will somewhere get involved before the purchase. As we move towards mid market and then enterprise customers, the line of business (LOB) guys have a larger influence apart from IT team who might get involved. Also which geography to target and what languages to support. US and English are big enough to start and one should look at other countries probably in growth phase.

KiSSTiP ! 

SaaS startups should focus on ONE Country, ONE  language first to ensure they remain focused.

Now that you know what your product market fit, how do you reach out to the US clients and get them to buy your product ? The process of customer acquisition was simplified by Suresh in four steps

  • Marketing
  • Product engagement
  • Sales
  • Customer success

While the nitty gritty may vary by the type of solution, the role of marketing is to get people to sign up for a trial or free account. Unlike B2C , in B2B the customer has to see the product demo. This is where the product team steps in to ensure the solution and get the customer engaged and use your product during trial period. If the customer is not using your product during trial, he probably won’t buy it. Once the product team ensures a good product experience, the sales team steps in to ensure conversion. Sales team can dived into ‘hunters’ – ones who get the customers and ‘farmers’ ones who nurture the relationship to upsell and cross sell. The customer success team ensures that the customers realise value from your solution. The metrics and handover points for each team needs to be meticulously set and communicated.

KiSSTiP ! 

The support queries from customers during early days of engagement should come to sales team and not support team as it is an opportunity for you to grow the relationship. But seller should get the issue fixed first and then engage further.

TwitterWe discussed the marketing process in detail including SEO and Adwords,  social media, content marketing, blogging. The importance of google and the traffic it generates is immense so SEO and Adwords are an important piece but the two need different specialised roles. The role of marketing is to get enough leads digitally. These can be through organic search- Google, Yahoo, Bing etc). While google still dominates the majority of the US market, those targeting elderly citizens might want to reach out via Bing as they still have a lot of elderly crowd there. SEO requires identifying your keywords as per the target geography and product. It needs meticulous tracking of keyword ranking every 2 weeks. Fact is if you are not on FIRST page of google, its not worth.

Till you get enough of organic crowd in, AdWords can fill in. Adwords is all about number crunching and reaching to an optimum cost per lead. Ashish and his Sokrati team shared their insights on managing adwords as that’s their area of specialisation and promised to conduct a detailed session later some time. Suresh shared insights into digital ROI metrics for AdWords. On an average you can get a signup for $10-$25 for search ads and $2-$10 for display ads. However the conversion seems better for search ads as these are real customers searching for specific requirements whereas in display ads are shown on sites which might have these customers as one of their target audience.

We discussed social media marketing – LinkedIn and Twitter and content marketing (blogging, case study creation etc) in detail. The group shared its experiences on getting leads from Quora and forum discussions. The internet now days is getting really crowded so you need to figure out which group is giving you the returns rather than spraying your messages across all over. Content marketing can be a differentiator in this crowded digital world- the quality not the quantity matters there. Suresh shared how his team publish two customer experience blogs every week where they share live feedbacks from actual customers. Retargeting helps you bring the same vistors back to your site and improve the ROI on your existing marketing spends. While content creation is important, content publishing is as much an important task. We discussed tools like Outbrain and Taboola for content distribution. Talking of tools, the groups discussed a host of SaaS tools that can be used by startups to more efficient like Pipedrive, ChargeBee, Intercom, Mixpanel, Google Analytics etc.

KiSSTiP ! 

Suresh shared his 10-80-10 principle for creating quality content. If total expected time for writing a piece of content is 100, spend 10 on briefing the content writer in the beginning, let them write for next 80- spend 10 on final review. The fact is the best content writers wont be able to understand your solution and market to the extent you do. So a 10 % briefing time can save them a lot effort and set them in the right direction.

We discussed the important aspect of pricing which also brought us to the discussion on Freemium Vs Free Trial. Majority of the group went in favour of Free trial over Freemium as they felt that the customers didn’t see value in fremium. While there is no thumb rule for this, solutions where SaaS products can get self signup can still look at Freemium to upgrade them later. On pricing, different team members shared their views on their basis of pricing. Some did it bottoms up on cost plus model where as others looked at the competitive pricing.

Pricing is an important aspect so ensure you keep taking feedback from your early customers and incorporate that feedback.

Finally, the most important aspect of execution is measuring the key metrics. As your team grows you need to push a dashboard of metrics which alert you on any activites that are going offtrack or to scale up things. Conversion Ratio, Conversion through Paid vs Organic, Organic Traffic by Source, Signup Trend Paid vs Organic vs Source,Paid traffic by Source, CPS for Paid and Overall, A-ARPA trend 12 months, etc are some of the important metrics.

All in all, I must say, it was one the most informative and engaging workshops I ever attended. It was a crash of 2 years of learning compiled into a 8 hour workshop. What if we were to pay for this workshop ? How much would we be willing to pay? Marketing strategy workshop $300, Leadership training $1000

Product Nation RT on Selling SaaS product to US – Priceless !

Kudos to Avinash for oranising, Sokrati team for being a great host and Suresh for conducting the round table. At 49 not out, half century is round the corner for Product Nation round tables and I’m sure in for a long innings. As long as they bat with us, we are sure to win in the end !

The Changing Landscape of Inbound Marketing and Why Should Marketers Care!

Traditional Marketing – including advertising, print media, branding and corporate communication – isn’t the same anymore.

Physical subscriptions have significantly dropped. People now handle all their bills online. Interruptive cold calling is a big no-no. And yes, more marketers are rolling their eyes than ever before.

With access to a wealth of information literally, only a click away, the former ‘loyalty’ driven state of consumer’s mind has given way to a more fluid (movement marking) thinking; wherein all buyer decisions are taken, often though the internet, after referring to several online sources such as authority blogs, articles,  word-of-mouth social recommendations or customer reviews.

Besides, the new social media paradigm has changed the way traditional marketing communications once functioned. The 4 Ps marketing elements which involved a systematic gathering of data from customers to identify their needs simply won’t work for someone wants to do Facebook marketing.

If that’s not enough, consider the following statistics-

86% of People Don’t Watch Television Ads. (The Guardian)
44% of Direct Mail is Never Opened. (The EPA)
Nearly 60% of marketers and business owners have adopted Inbound strategies. (HubSpot)
87% of B2B marketers use social media in some form. (Aberdeen Group)

Companies that excel at lead nurturing generate 50% more sales ready leads at 33% lower cost. (Forrester Research)

So what is Inbound Marketing, anyway?

The Boomerang Effect called Inbound Marketing: When Customers Come to You

Like the boomerang, getting customers to come to you, takes skill and strategy. ‘Inbound marketing’ refers to a series of marketing activities that gets you customers in when they are ready, rather than you going out and bombarding them with ads to grab their attention.

Unlike print and TV ads, inbound marketing requires the right dedication, commitment and resources to have a significant impact on ROI. Its rightful execution depends on building and staying true to your core customer personas while relentlessly tracking you lead goals. SEO is a classic example of inbound marketing. It typically works like this:

  1. A woman is looking for a nice photo frame to gift to her loved one.
  2. She goes online to research frames that can be delivered at her place. She Googles to search for {best photo frames}.
  3. She decides on one and orders it.

If you are a dealer in photo frames, this is great news for you, since you didn’t need to head out or cold call people who might be looking to buy photo-frames. You also didn’t have to spend heavy bucks advertising about your frames on print or radio. Actually your target customer found you online when she was looking and was ready to buy.

With inbound marketing you can match product related content, educational content etc. into a customers buying process, thereby increasing leads for your business. Lead nurturing keeps you at the top.

The Process

Inbound marketing is a holistic, data-driven process. Not only it involves creating personalized, content-rich and customer-driven strategy for each and every stage of customer interaction – not interruptive messages – but also looping them through ongoing engagements that pulls interested customers to your company and deepens their connect.

Why Should Marketers Care?

Marketers have heralded inbound marketing as the next must-do activity. A necessary integration in order to reach customers in the right channels at the right time, is keeping it folded into larger business planning. Content that is created for consumption form the backbone of all inbound efforts and must be supported with other paid, owned and earned tactics. Companies are finding these efforts worth because:

  • It is more consumer-focused.
  • It’s cost-efficient than traditional, outbound marketing
  • Inbound forms better long-term customers than short-term sales
  • Inbound creates better brand-building
  • Inbound is global. Yes, you can reach out to customers anywhere
  • Customers best interests is the guiding force for all inbound activities

While it is encouraging to look at companies increasingly adopting inbound marketing techniques, its full potential cannot be realized until its efforts are threaded through – and success measured by ones – larger marketing goals.

Can Inbound marketing help Software Product companies create demand on their websites?

The answer is “Absolutely,Yes !”.

Here is an upcoming free webinar on how you as a software product company embrace inbound marketing to its fullest potential.

Register Now for FREE webinar on “Inbound Marketing for Technology Companies.

Good luck and let me  know if I can be of any help !