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Bootstrapping Products with Services

Because it’s often so difficult for entrepreneurs to obtain seed funding for their startups, bootstrapping is one of the best methods to self-fund their projects. If outside investment capital is for whatever reason undesirable or unobtainable, bootstrapping a product by offering a service is one of the best ways to go. This, by the way, remains a controversial point-of-view, and most industry observers will take the position that companies get distracted if they try to bootstrap a product with a service. At 1M/1M, we take a pragmatic and contrarian position, and back it up with numerous case studies. From where we sit, bootstrapping products with services is a tried and true method.

RailsFactory, a consulting and app development company that provides solutions for the web application framework Ruby-on-Rails, was co-founded by Senthil Nayagam and Dinesh Kumar in 2006. RailsFactory provides numerous services—primarily focusing on app development for the Ruby on Rails platform, but also including Rails version migration, E-commerce solutions, Email campaign system implementation, and iPhone and Android app development.

Senthil and Dinesh bootstrapped RailsFactory themselves, starting with about $1,250 in seed money. When they needed to, they each utilized other personal resources: Senthil reached into his savings, and Dinesh turned to his parents. But they started generating revenues fast—thanks to the services they offered, they were generating revenue by their second month, and they’ve been growing since. To date, RailsFactory has executed over 100 projects and have worked with clients in the US, Canada, India, Australia, Singapore, and the UK. Their services revenues have crossed a couple of million dollars, and the company has recently built a product that they have started validating with those 100 services customers. The productized offering enables them to offer a support package to the SME segment based on packs of trouble tickets.

Similarly, Mansa Systems is a SaaS-based IT company, founded by Siva Devaki in San Francisco in 2006. Siva founded Mansa Systems to focus specifically on cloud computing. Currently, Mansa Systems publishes a number of apps to be used in conjunction with Salesforce.com through Salesforce’s AppExchange app marketplace.

AppExchange allows partners to create apps to enhance Salesforce for business, and Mansa Systems currently offers eight different apps for Salesforce. Each of the apps is designed to address a limitation with Salesforce; for example, cloud storage app Cloud Drop gives users additional cloud storage space, MassMailer allows users to circumvent Salesforce’s bulk email limitations, and EaglEye provides Salesforce users with secure, trackable document filesharing. Mansa Systems remains entirely self-funded via the company’s service business, and there are currently no plans to use outside funding. The company already has achieved $2 million in annual revenue, and enough profitability to be able to develop and launch its apps at a steady clip.

AgilOne, a company that provides cloud-based predictive customer analytics, was founded by Omer Artun in 2006. Initially, the company relied entirely on services to get close to customers, understand and address their problems, and in the process generate revenues. Today, AgilOne’s product is a software-as-a-service platform. Much of what the company learnt about its customers in the services mode have been productized, although a percentage of revenues still comes from services.

AgilOne’s platform is designed to make it easier for companies to see how their customers are interacting with their products. For example, a company’s online retail customers can be broken into different “clusters” based on their search and shopping preferences. These clusters then enable the company’s marketing department to more accurately target those users with specific promotions.

Omer bootstrapped his company from no revenue or employees in 2005 to about 45 employees and over $15 million in revenue by the time AgilOne partnered with Sequoia Capital in 2011. Silicon Valley’s top venture firm made a sizable investment at a high valuation in a company that was bootstrapped using services.

I have often heard that capital intensive businesses are difficult to bootstrap. There is some truth to this observation. However, Finisar offers the counterpoint.

Finisar produces optical communications components and subsystems and was founded 25 years ago by Jerry Rawls and Frank Levinson. Jerry and Frank bootstrapped Finisar by first providing consulting services while doing product development in high-speed fiber optics for computer networks. They searched for a need in the computer industry that wasn’t filled, and discovered that need in the early 1990s when they pioneered a low-cost gigabit optical link that economized the standards for optical drives. By 1994, their product had changed the fiber channel standard, and following that year, the sales of their optical components doubled every year for seven years in a row.

Even while Finisar was taking off, the company remained fully self-funded. Jerry and Frank bootstrapped Finisar for the first ten years of its existence and received no outside funding until 1998. In 1998, they were approached by TA Associates and Summit Partners, two private equity firms who bought 20% of Finisar in anticipation of an IPO. Jerry estimates that the company’s sales pre-IPO were in the $30 million range in 1998 and, by the time the company went public in 2000, sales were around $67 million. Finisar went public at $19 and closed at $86.

Optical communications components and sub-systems, for all practical purposes, are considered to be extremely capital intensive. Yet, Frank and Jerry, obviously, managed to bootstrap their venture using services almost all the way to an IPO.

Each of the four companies I have introduced you to bootstrapped to profitability via services. Not only is this a viable method of getting your startup off the ground, it’s a proven method of reaching profitability, as well. In some cases, it can take you to the enviable position of Sequoia Capital knocking on your door. In other cases, you could even have investment bankers come calling, wanting to take you public, and a whole slew of late-stage funds wanting to shower you with funds.

All those are desirable outcomes!

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PromptCloud is a powerful cloud-computing DaaS (Data as a Service) engine involved in ‘Big’ data acquisition

PromptCloud is a powerful cloud-computing DaaS (Data as a Service) engine involved in ‘Big’ data acquisition. PromptCloud crawls data that’s spread all across the web and converts it into meaningful insights. It was founded by Prashant Kumar. Before starting PromptCloud in late 2009, Prashant was at Yahoo! with their data team working on Yahoo! Frontpage which was one of its hottest products back then. He was mostly involved in data crunching using big data technologies that were still evolving. Prashant graduated with a B.Tech-M.Tech dual degree in CS from IIT Kanpur in 2007. He was later joined by Arpan Jha in 2012, who is a Carnegie Mellon alumnus and took over the Products & Market Strategy function. Prior to joining PromptCloud, Arpan has worked as a Consultant with KPMG & Deloitte.

Introduction

Let’s consider a scenario: say pn.ispirt.in decides to launch a section on the website where they rank all “Made in India” products based on popularity, usage, quality, and some other criteria. One approach is for them to go out and subscribe to the news feed of all important news sites all over the world and try to track all the news and events about all ‘Made in India’ products. This data can then be used to rank them. Given that data about popularity, usage and quality can be generated all over the web (a product review here, a customer complaint there, a Facebook mention, a tweet, a youtube video gone viral, a buyer praising the product on his blog, you get the idea), such a list of websites will be incomplete at best, and the volume of data will be too much to handle for the ProductNation editors.

Enter PromptCloud. PromptCloud offers its Data-as-a-Service for clients like ProductNation who need large volume of data from all over the web for further analysis (this is just one of the use cases, PromptCloud offer many more services). Continuing with the same example, ProductNation and PromptCloud work through following steps:

  1. ProductNation provides 2 pieces of information to PromptCloud: a list of websites they are interested in, and a list of keywords they are interested in
  2. They will also mention how frequent they want the data to be crawled which is dependent on ProductNation’s estimate of how fast their data is likely to change. If they need fresh data (say every few minutes), they purchase PromptCloud’s ‘Low-latency Crawl’ service
  3. PromptCloud will crawl all the data, matching keywords to find relevant content, and then convert it into structured data (XML, CSV, XLS, etc.) for ProductNation’s consumption
  4. ProductNation can do 2 things with the data
    1. It can fetch all the data through API calls and download them into its own servers for further processing. This will be done at a regular schedule, agreed with PromptCloud
    2. ProductNation may not want (or may not have capability) to host all this data. So they buy PromptCloud’s Hosted Indexing Service and they can now let their editors search this index and only fetch relevant content.
    3. When ProductNation gets the data, they are also provided a relevance score for each data item (as judged by PromptCloud’s algorithm) so that they can optimize their analysis efforts and keep their results very relevant.

If Internet was small, say 1000 sites, this would be a trivial problem to solve – just get all the data and be done with it. Scale of Internet (and the rate at which data is growing) makes this a complex problem to solve. This is a technology problem which needs to solve 4 critical issues:

  1. Velocity: How fast and how quickly can data be fetched?
  2. Structure: How can the data be structured meaningfully when data on the web is largely unstructured?
  3. Volume: How much data can be stored and processed efficiently?
  4. Relevancy: How relevant the data is to the keywords supplied, and to the overall intent of this data crawl?

PromptCloud is a technology company which aims to address all these issues and offer services to businesses who need to analyze web data at scale.

The PromptCloud Service

Offerings

PromptCloud offers services built on top of their cloud-computing DaaS (Data as a Service) engine. They offer custom crawl services to their clients. Specifically, following offerings are available:

Their three primary offerings are:

  1. Site-specific crawl and extraction: Given a set of sites and fields to be extracted, their crawlers will fetch relevant data from the web, which then gets converted into structured data and delivered to the clients via API
  2. Low-latency Crawls: These are highly optimized crawls which can fetch data in intervals as low as 5-10 minutes
  3. Hosted Indexing: Structured data created from custom crawls is hosted and indexed and exposed to clients via query APIs.

PromptCloud Service Offerings

Features

They offer following features as part of their services:

  1. Deep data crawls- all past data on the site
  2. Structured data feeds are available to the clients daily/weekly/n times a day
  3. Ability to supply only incremental data
  4. Crawling data from AJAX/non-AJAX based sites
  5. Indexing of data as per requirements
  6. Custom Analytics

Their technology stack uses a lot of open source solutions right from Linux, Hadoop and NoSQL to various cloud and cluster management tools. These are augmented with custom components they have written to solve their unique challenges and serve their customer needs better. They serve data to their clients via API which can later be synced to their FTP, AWS S3, Google Drive or DropBox accounts.

Differentiators

Offering web-scale crawling services is a hot space and there are many competitors with similar services. When looking at their differentiators, 3 things stand out:

  1. Vertical-Agnostic: Their offerings are based on URLs and the keywords they use to filter the results of their crawl, so they are independent of verticals, and can cater to a large number of verticals. This also helps them quick turnaround on new features which then become available to all their clients.
  2. End-to-end Monitoring – Web sites regularly have dynamic content on their pages, and things can change pretty quickly. While most other providers offer a do-it-yourself solution (essentially making you solve this problem), PromptCloud monitors structure changes on the web and supports clients until data gets imported into their systems.
  3. Large-scale complex crawls – Managing large-scale crawls is one of PromptCloud’s USPs. AJAX elements on the web sites make the pages unique and dynamic. PromptCloud’s platform can crawl pages that use AJAX and interactions very well.

Market

Being a technology-centric company, CTO or Product guys on client side are the decision-makers and buyers for their product. Their adoption has been good so far, catering to clients in US, UK, Canada, Western Europe, Singapore, Hong Kong etc. Being a vertical agnostic solution, they have clients from all domains be it e-commerce, travel, market research or classifieds and across the globe. They are an early growth stage company and are growing at the rate of 4X in revenues each quarter, with healthy pipeline of clients.

Since they offer custom services, their pricing varies a lot – it could be anywhere from $200 to $10K a month for a given customer. Pricing depends on what types of services are being consumed, as well as on crawl frequency, data volume, value added services, etc. Users can control the price by setting limits to data that they fetch in a month. They also can do some sampling of data to get a sense of pricing run rate, before committing to the crawl.

Currently, most of their marketing and sales happen through referrals. As they go forward, brand-building is going to be key marketing strategy and they are investing in that right now.

They are looking to address a larger market and to expand their offerings across more and more geographies. Scale is the #1 imperative for them right now. The aim is to build a brand around their solution and increase the loyal customer base.

Future releases will focus on following themes:

  1. Make data richer by applying AI and Machine Learning
  2. Offer standardized data sets in some verticals

Competitive Landscape

Web Crawling services is a space that is hot and has many players. There is 80Legs (any guesses why they are called so?) which offers a programmable platform for custom data crawling, and there is Grepsr that offers its services to individuals, and there are a lot of them in between – Fetch, Mozenda, Spinn3r (blog, news and social media crawling), and of course an open source web crawler (Apache Nutch).

These products vary along 2 dimensions (and hence they should be visualized in a 2×2 box)

  1. Horizontal (Platform) or Vertical (Business Solutions)
  2. Level of programming required to achieve business value

#1 is obvious, let’s talk about #2. Level of programming required to get value depends on the interface that is exposed by these services and who does it appeal to the most. Most of the consumers of data are business people; however, most of these offerings are technical enough that business teams need to work through their technical teams to get value (one reason why PromptCloud sells to Product guys rather than business guys). It is hard (though possible) to have a platform offering and still provide an interface consumable by business teams (because business value will be generated only when platform outcome is processed using vertical business rules which is hard to do without some amount of programming).

PromptCloud is a horizontal (platform) offering that requires a little programming to get it integrated with business flows of the client. For them, this positioning makes sense for 2 reasons:

  1. Revenue Spread: Horizontal increases addressable market because all verticals can be targeted. However, this also means that value provided per client is less and hence revenue per client is going to be less while number of clients might be large. At this stage of their company, this is a better revenue mix (since it exposes them to a large number of clients).
  2. Cost of Innovation: Vertical requires more business focus and hence innovations that are specific to a vertical may not be applicable to another vertical, while horizontal means every innovation benefits every customer. This makes innovating for every client a costly affair when focusing on a vertical.

However, it is important for them to make sure they are moving continuously along the spectrum of offering vertical solutions (without compromising on their innovation abilities) and offering business-consumable interfaces.

The Road Ahead

The road ahead for PromptCloud is tough but inspiring. They are in a space that will require much more services in future as data continues to proliferate, data-driven insights become the order of the day, and web data continues to become more unstructured. They have a good set of offering and a good list of clients to work with. However, they do face some challenges:

  1. They need to gain more visibility in existing and newer geographies; building their brand is going to be key.
  2. They need to add more products to their bouquet of offerings
  3. To maintain their technology edge, they need to continue to build the team even through the shortage of trained professionals in this area.

They also need to figure out where they want to put themselves on Horizontal-Vertical axis, we feel that they need to move towards offering vertical-focused solutions, in addition to maintaining a horizontal data platform. PromptCloud (and most of its competitors) offers a technology product to business teams to do their data analysis well (and hence business teams need to involve their technology teams to consume PromptCloud services). We feel that a way forward for PromptCloud will be to become a business product that the business people can consume directly and come to build critical business on. They platform approach (vertical-agnosticity) is a good foundation on which such a business product can be built.

They have the right trajectory of growth, and good momentum and team to continue to push and become a name to reckon with in this space.

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KeyMails is making the email smart for Outlook users!

Still believe email is small and dying a slow death in the world of IMs, tweets and Facebook messages? Just have a look at the massively viral ‘Every Second on the Internet’ and scroll till the end to get a visual realization of how big a part of our life email still is. Email is still the first choice for internal communication and chatter within a number of organizations owing to its ubiquitous nature and presence, not that it was intended to be used that way.

A number of startups are now building tools to help users get more out the email ranging from helping you get the social media information to turning your inbox into a to-do list in itself. But it is no wonder that the biggest peeve with the email has been its overload. With independent researches confirming the belief held for long that the overdose of email has severe effects on productivity costing precious man hours and increased costs.

With the latest Gmail update the users found the presence of the tabbed inbox easily helping filter the signal vs noise between social media, promotions and genuine email content. But Bangalore based KeyMails is looking to provide a similar level of productivity for the Microsoft Outlook users. Keymails is a plugin for Outlook helping users to prioritize the email and the best part it becomes efficient over time based on the usage patterns.

What is KeyMails and how does it work?

The KeyMails team is reinforcing the belief that for a large number of corporate users the desktop/laptop is the device where the emails get done with. Thus the plugin keeps all of the information on the device itself and doesn’t send anything on the cloud. Options like the ability to archive a mail till a due date along with being fully functional offline makes it an impressive tool for Outlook 2010 users.  

KeyMails works within Outlook system by creating a separate folder which implies that the user is still using the familiar Outlook interface thereby reducing the learning curve. By default the system prioritizes the mails based on the previous usage patterns but moving on the user can upvote/downvote certain users or domains to affect their priority ranking in emails for the KeyMails folder.

But why email and why Outlook?

Pankaj Kulkarni is the founder of Colimetrics the parent company behind KeyMails and he has been in the corporate world long enough to understand the email usage tools and patterns. According to him there are enough corporate Outlook users out there to keep them busy in building more efficient tools. With such a big market, building tools for them just is the right place to be.

Users & Funding

KeyMails had a public launch in June of this year and right now they are working on adding more users. The current user base befits a product newly launched but they have seen individual beta users come from organizations ranging from Viacom to Infosys to even the White House.

The venture is partially self funded by the co-founding team of Pankaj and Phaniraj with the money coming from the sale of their previous venture S7 Software Solutions and venture money coming from investor Yogi Kandlikar, who also happens to serve as the teams resource in the Silicon Valley.

Product timeline

Pankaj promises that what the user sees right now is just a sneak peak of the things to come. In the coming months they would be focusing on marketing campaigns and documenting content to help make the on boarding process a breeze. 

The short term goal for KeyMails is to introduce a freemium model of the product to get the user a taste of the product which is currently priced at US $25/year or US $3/month with a 30 day trial period. Apart from this Pankaj emphasized on the long term vision of building a host of services and tools around and email and productivity itself. Which would begin with email diagnostics and team collaboration to knowledge management, to help document recurring issues in the organization to help the staff.

On one hand desktop users would find boon in the tool built by Colimetrics on the other lack of multi-device or mobile support could be a bummer in certain regard. But then no two email users are alike head on to Outlook and give your productivity a spin on KeyMails!

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“We are getting the world to gain confidence on enterprise products developed out of India” – George Vettath, CEO of Kallos Solutions

ProductNation interviewed George Vettath, Founder and Managing Director of Kallos Solutions to learn about the journey of his company in the Enterprise software space for the past decade. In this interview, George explains how his background and experience helped in creating a superior product, and provides useful tips for entrepreneurs in this space to get more effective. Read the full story here….

What was the motivation to start your company? 

I had been working in the enterprise software space for over 16 years prior to taking the entrepreneurship leap. Around 2003, I was fascinated by the model based development – a technological innovation that started emerging in rapid software development. I immediately recognized an opportunity to leverage this new model, using which I could reduce time to value to a customer by five fold. Besides this, at that time, I had a different point of view on the direction of strategy with my employer. Both of these led me to start Kallos in India.

Why did you choose India as a location? 

First, I wanted to give back to my country that helped me get global exposure, via sponsoring of my MBA at Sydney University, Australia. Secondly, my initial working years were spent at CMC and RAMCO Systems, during which I had developed a good understanding of the needs of the Indian customer. Thirdly, my roots and extended family are here. All of these were principally responsible in my decision to start my venture in India.

Starting a new company in the enterprise space, under conditions that prevailed a decade ago should have been very challenging. What gave you the confidence to pursue this path? 

Like I mentioned earlier, during my professional career, I was already exposed to the nuances of dealing with Indian and global customers. I was part of the core team at RAMCO which was tasked to build its ERP product. Further, as global head of product management, I was given the responsibility to broaden the reach of RAMCO products to 8 different countries. The experience of selling these products in different geographies, dealing with competition – primarily SAP that came in to Indian market and virtually uprooted us, reconfiguring our strategy to survive the onslaught of global vendors, was the primary source of my confidence. I realized that I could still make my mark, despite all the heavy competition, as long as I had a sustainable competitive advantage against all these vendors.

Can you tell us on how you could translate your thoughts into a real sellable product – and one with a competitive advantage, over the past decade? 

From 2003 till about 2006, we focused on building the product suite on the principles of model driven development. I bootstrapped the company during this period, by executing US projects on the side. From 2006 onwards, we started aggressively reaching out to customers and began delivering product centric solutions, based around the PaaS infrastructure that we had developed in house. The business model was to keep the PaaS in-house, but leverage the platform to deliver rapid solutions and customizations, around our ERP/CRM and HRMS products. Thus, we differentiated ourselves with others in the marketplace as providers of product and platform centric customized solutions, delivered within relatively short timelines.

Another aspect to note is that we did not concentrate on hyper growth. We took a very long term view on the road to profitability – knowing fully well that as the product matures, growth will follow. We also did not adopt aggressive marketing tactics. All we did during the past decade was to wait for a disillusioned customer tap our door after he or she had burnt their fingers trying to adopt a MNC vendor based solution and failed. I realized that the most difficult area in the Enterprise suite implementation is in addressing the variance of requirements across customers in their respective supply chains. Here, we leveraged our development strength to rapidly customize solutions as per customer requirements. These aspects have enabled us to sustain the edge against competition over the years.

Interesting insights… Can you share to us your moments of wins during your journey thus far? 

We have provided solutions to over 170 plus customers thus far – and each one is an important milestone in itself. If I need to recollect the ones that had most impact to the organization, I would think the win we had at CSS Corp for our CRM solution, and wins at Bluedart Aviation (subsidiary of DHL), Scope International (Subsidiary of Standard Chartered Bank) and many services based BPO Organizations for our HRM solution as the key ones. Some of our international wins from the KGK group in Hong Kong and LCC in the Middle East for KServeHRMS, are also milestones since it was the early international sales of our products. The CSS Corp win validated our PaaS play, as well as demonstrated that our solution could scale to support a workforce of 400 users as early as 2007. The Blue Dart Aviation, Scope International and BPO HRMS wins gave us confidence to ramp up KServeHRMS as our current flagship product.

The KGK Group in Hong Kong initially bought the HRMS package for deployment at one of their offices – but after successful implementation there, they expanded to roll it out in many of its group companies in the Far East. An e-publishing firm in Delhi, Aptara Corp was able to effectively use the operational workflow automation solution for its 1100 employees. Power2SME, a Delhi based SME aggregator standardized on our ERP offering and went on to get funded on account of our backbone solutions. These are some experiences that I can recollect…

Over the years, you also would have your share of lost opportunities. Can you shed light on a few key ones?

As regards to lost opportunities, I think we focused initially on selling KServeCRM and KServeERP instead of KServeHRMS. We realized a bit late that the gap in the market was really in the HRMS space in India. We had the best in class HRMS solution and even those customers who had deployed MNC based solutions had not availed of the HR part for a variety of reasons.

The second one in terms of missed opportunity would be our lack of focus on going global earlier. International product sales are more profitable since they are tax free, and easier to implement due to maturity in their processes. In fact, the global customers that we have today – all of them came to us directly based on the good feedback and performance of our products in the field.

Having traveled the road thus far, what advice would you like to give to product entrepreneurs operating out of India?

Over the years, I have seen many companies start off and then shut down. While the reasons of closure could be many, I would advice all product entrepreneurs to have a proper focus on cash flow management and customer management, especially if you are addressing the domestic market. Software is not something that is understood fully by customers in India, and so, you need to work on getting them to understand the hard work that you are putting in to make them successful. Once they see the intent and integrity, customers will never hesitate to pay.

On a related note, personally, I spend about 2 to 3 hours every week for the startup and product ecosystem. I also aggregate the key challenges faced in this region to the appropriate policy makers in my capacity of being the Regional Chair for NASSCOM Emerge Forum for the past 2 years. I feel that over the past two decades a bunch of like minded folks have provided confidence to the world that we can conceptualize, build and sell enterprise products out of India. I urge all the fellow entrepreneurs in this space to reach out to us, collaborate and ensure that we take this momentum forward, and to greater heights. 

 

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A product company can begin earning revenue only after the product is built.

A product company can begin earning revenue only after the product is built. Significant upfront investment is required in engineering and sales. As revenue picks up, expenses continue to mount for ongoing development and sales, and for establishing a new support team. It may take years before the company’s monthly receipts exceed the outflow. This is known as becoming cash flow positive. Adequate funding is therefore critical for a product company to survive.

As a rough estimate, a product business may have to invest anywhere from Rs. 50 lacs to 2 crores (USD 100K–400K) before they start selling. This is assuming that founders take very little salary. If this money is available somehow, the founders can concentrate on building and selling the product. If not, the company is forced to adopt non-ideal strategies. The previous chapter discussed options such as working on the product part-time, or generating cash by providing training, consulting or services. If founders have to multitask, it delays the product further, creating a higher risk for the viability of the business.

In the bootstrap phase, every rupee counts. Each aspect of the company’s operation must be optimally managed. At the same time, you cannot afford to compromise on product quality or delay the time to market. The two previous statements appear to be contradictory, but building a successful business is often about prioritising and choosing correctly between the conflicting demands.

The First Mile: Forming the Team and Signing Up Clients 75

For example, if cash in hand is an issue, PCs can be leased with conversion to ownership after 12–18 months. This is effectively like a loan (the interest is built into the lease cost). Hardware and software licensing cost can be reduced by using a common server and thin client for each engineer. You can have two servers to avoid single point of failure. Only servers need to be upgraded over time.

Making progress with limited funds is a struggle, but somehow enough money has to be made available through personal or angel funds, or some side business. With the right product, and after market validation with good customers and revenue, VC funding may become possible.

Can it be done differently? Let’s return to the film industry example. There are mega-budget movies in which producers spend enormous money on stars, sets, foreign locations and publicity. The film must attract a large audience, and earn hundreds of crores of rupees to become a super-hit. When that happens, the director is in great demand, and lead actors become superstars. If it is a flop, it is the producers who lose the most. At the other extreme, you have niche films that arrive relatively unnoticed or play in festivals. Made from a lean budget, the film may have an interesting script, excellent acting and good direction. The audience may initially be restricted to those who appreciate such movies, but it may grow by word of mouth publicity, making the movie a success.

Similarly, some entrepreneurs have conservative goals. For them, it is a lifestyle choice of being independent and having their own company. You will find many such businesses that are self-funded, largely debt-free, reasonably profitable and generating only modest revenue after several years. They usually provide a mix of services and one or two products. They keep adjusting their offerings over time to adapt to the changing market and available cash.

However, if your goal is to build a really successful company that gets acquired or goes public, then outside investment is almost a prerequisite. It is rare to achieve a revenue ramp that is steep enough to provide adequate cash.

A website offering advice and networking to entrepreneurs, StartupNation has designed an ‘Odds of Success Calculator’. The online tool rates a business based on eight risk factors. Interestingly, none map directly to the product idea. Two each are linked to the management team’s experience and market potential. But as many as four relate to finances: invested capital, difficulty in obtaining funds, quality of financial management, and degree of business planning. This indicates the importance of finances to achieve mega success.

There is no right or wrong goal—you just need to be sure about what kind of company you want to build and proceed accordingly. If you are ambitious, and are in fast growth mode with revenue exceeding Rs. 1 crore, then it’s time to approach institutional investors.

Reprinted from From Entrepreneurs to Leaders by permission of Tata McGraw-Hill Education Private Limited.

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The secrets of succeeding in the Indian SME Market – the iWeb Story

ProductNation caught up with Akshay Shah, founder and COO of iWeb Technology Solutions to understand how they have been successful in serving the Indian SME market. Akshay says that the ability of their company to provide customizable business solutions at affordable prices is what has led to their success. Read on…

What was the main trigger to start the company? 

The journey leading up to starting iWeb in 2005 is quite interesting. I come from a family of chartered accountants. I was well on my way to pursue CA as my occupation, after my B.Com. While preparing for my CA intermediate exams, I had some free time. During this time, as a hobby, I started following the dot com boom in the US and developed an interest in how Internet was impacting businesses and people.

Around that time, I happened to meet the CEO of a well accomplished IT business firm in one of the conferences. He heard about my interests and checked if I could help his company out in consulting with customers to deploy SAP solutions on a part time basis. The offer seemed interesting to me and I started to work part time. As I started interacting with customers and understanding the product, I very quickly realized that there was a huge disconnect between the features offered by the vendor and the price points at which they were being sold. I understood that there was an unmet need, particularly among the SMEs who wished to automate their business processes using IT.

This was the trigger for me to start thinking of starting iWeb. Along with Ketan Trivedi, my father’s friend, who also is a CA, we tried executing small projects for customers who we obtained from our contacts. The chemistry between Ketan and I seemed to work well. Also the initial work seemed to validate our thought process. Hence we started iWeb in 2005 formally to offer business solutions to customers.

The ERP products/solutions space is usually perceived as a mature and crowded marketplace. How have you managed to build a scalable and sustainable business in this area? 

This perception holds good for VCs and investors who are looking at exits and non-linear growth in a relatively short time dimension. However, in the long term, this will be a very lucrative business, if you play it right. If you analyze the SME market in India today, you will notice that effectively only 5% of the market is automated. So, there is a large scope for many vendors, including the big players to go after the rest.

The issue is not about the availability of market, or access to it. The key challenge in addressing the reminder of the untapped market is to be able to provide customizable solutions at affordable price points. It is here that we believe we have been able to crack this puzzle.

Can you elaborate on how you solved the puzzle? What mistakes happened during the process and how did you overcome them? 

From the beginning, we were pretty determined to build the entire ERP suite. In this zeal, we started to develop all the required capabilities of the product in parallel. However, we soon realized that during the startup phase, we could not manage development as well as customer acquisition with equal ease. We had bootstrapped ourselves and had no external capital infusion till last year. Hence we started selling only the CRM module to begin with, and over time, as we obtained a level of maturity in implementing it out for a few customers, we started paying attention to developing and selling the reminder of the modules.

As our customer base increased, our experience in understanding their requirements also increased. We realized that in the SME segment, business processes across enterprises would not be standardized. So, to be able to still get them to buy our solution and benefit from it, we had to build our product to be customizable to their requirements, and be affordable at the same time. These requirements led us to develop a powerful differentiating capability through our AgilewizTM framework that helps us deliver customized multi vertical and horizontal application solutions across different business lines with minimal amount of deployment time.

The beauty of this approach is that even a non-techie can use and configure a solution of his requirement. This approach helps us eliminate the requirement of highly skilled IT professionals needing to deploy solutions to customers. Customers benefit from it, since it reduces the cost of acquisition of our solution. In summary, over these years, we have evolved our product line and built sustainable business by focusing on providing customizable solutions at affordable costs to the SME segment.

What role have channels and partnerships played to help your sales?

You could say that the biggest asset for iWeb today is the partnerships we have built with other companies and individuals. They are a key factor in scaling the business, specifically for our country that has diverse customer requirements. It is also a relationship that we have built by valuing their domain skills. We are very transparent in all our dealings with partners. We strive to make our partners successful by sharing best practices of implementation through our network. As an example, one partner in Indore may reuse the artifacts developed by another partner elsewhere, reducing his time to deployment. This collaborative nature of relationship has helped us to a great extent in obtaining customer wins.

You have recently announced that you are diversifying as a software services provider, offering SaaS / PaaS type of solutions. What is the thinking behind this move?

The intent to diversify from being a pure product/solution company and enter into providing services via the SaaS / PaaS route is driven by two considerations. Firstly, we want to leverage the benefits of emerging technology and pass the benefits to our customers. Secondly and more importantly, moving to a Saas / PaaS based platform will help us provide better support to our existing set of customers. So you could look at this as our play to retain existing customers and build further to address their other needs.

On a different note, iWeb as a company and you as its founder have received multiple accolades internationally and at national level. What does this mean to you as a person, and how does this help your company?

Recognition from various forums such as the MIT TR35 or being selected as one of the top 50 emerging companies by NASSCOM certainly motivates self and the company in a big way. Firstly, it validates your belief and play, paving way to many business leads. Sales cycles will get much simpler because your prospect now sees you as being credible. Secondly, at a personal level, it is a huge confidence booster, and energizes you to go further your ideas to the next level. I would say that most of our largest breakthroughs in terms of customers or partners’ acquisition have happened on account of this.

What message would you like to give to potential product development entrepreneurs? 

Off late, I see youngsters, specifically those graduating out of MBA colleges taking to entrepreneurship primarily because they see it as a cool factor or as a style statement. They do not seem to be prepared for the long haul. So, my advice to any entrepreneur thinking of getting into a software product business is to do so, only if he or she has a burning desire to solve a real problem – a problem which is causing him or her to have sleepless nights. One needs to understand that the journey of entrepreneurship is not a bed or roses, and you get to do everything else other than what you wanted to do. One should be mentally prepared to face these uncertainties and ambiguities – and be passionate about the idea, have the patience and perseverance to take it to a logical conclusion, come what may. Only then, it makes sense to go this route.

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“For a product business the product roadmap, customer segmentation and a delightful user experience are extremely crucial.”

Started in 2011 with only three employees, Emportant has grown to serve thousands of users with their cloud based end-to-end HR and Payroll products. Co-Founder and CEO, Emportant, Sandeep Todi says his company is focused to appeal to firms that would identify with its motto, ’Employees are Important’.  In an interview with ProductNation, he says his biggest learning is you must always take good care of your customers even as you keep expanding.

How would you describe the shifting paradigm from Outsourcing software to Software as a Service?

Software as a Service (SaaS) allows you to try business class software with ease and without being tied down with painful and expensive procurement and deployment cycles. With no upfront investment, it’s easy to try and buy SaaS products. In that sense, a SaaS network of products mimic the behavior of a ‘technology grid’ that you can tap into. In contrast, building custom software is like installing a captive power generation unit at prohibitive cost that is hardly justified when the grid is at your doorstep.

Companies have also realized that SaaS is not just amortizing costs over several years, but a new way of thinking. You are not selling a box, rather a product that’s constantly on the move. SaaS products see anything around 4-12 releases a year, are built on rapid release cycles. Moreover, customer feedback is acknowledged and incorporated in these rapid release iterations, something which is impossible in outsourced software or licensed software. The customer is therefore always on the latest release and does not suffer from “version fatigue”. Businesses are realizing this by adopting SaaS products with very little risk, tasting success and then quickly going on to embrace this new pedagogy.

In what way does this new model benefit users in terms of effectiveness, cost and support?

This SaaS apps-grid or ecosystem of apps that can co-exist with each other, is becoming more powerful by the day. No outsourced software is able to deliver this as elegantly and as cost effectively as SaaS product delivered over the cloud.

SaaS software is able to deliver benefits rapidly through new releases and eliminates risk of obsolescence. FUD (fear, uncertainty and doubt) has been used by traditional software vendors, scaring users about impending obsolescence. Having left with little choice, customers had to regardless opt for expensive upgrades and consulting efforts. A transparent SaaS business always keeps users on the latest version and ensures that this version works 100% with all customer environments. This dramatically lowers the cost of maintaining the product because you are no longer dealing with different versions that must be supported for different customers.

Tell us the story about your recently launched web based HRMS and Payroll software, Emportant? How did it happen?

We are in the HR software business for nine years now. Having sold our product PowerApps to several mid-to-large enterprises, we delivered mission critical and high performance HR/Payroll software to customers like Bank of Baroda, Ford, TI Group, ITC, L&T, GTL etc. In 2009, we wanted to adopt cloud computing in a big way and struggled for two years. It was then that we decided to carve out a separate company and a separate product for the cloud – this was the genesis of the birth of Emportant in 2011.

In creating Emportant we initially feared it would cannibalize our own product PowerApps. Thankfully, that did not happen and now both products have a good market presence of their own in two different customer segments.

Emportant.com drives every HR process with the Employee at the center. Every HR / Manager / Employee interaction can be initiated by the Employee and is available on a self-serve platform.

How easy or difficult is it to market a software product in India?

The going was pretty tough in 2011 as cloud was not very well accepted back then. Now it’s different, as CIOs are less wary about the cloud and more concerned about the stability of the vendor, maturity of the cloud product, etc.

Custom software is still viewed as a viable alternative primarily due to the inexpensive cost of hiring programmers. Moreover for a product sold to mid-market and large businesses, you have to traditionally sell one-to-one, engage in multiple meetings and convince customers about the solution fitment without landing into the trap of customization.

What are the factors that make a successful software product and the challenges faced in taking it to the market?

For a product business the product roadmap, customer segmentation and a delightful user experience are extremely crucial.

We have focused on how HR can be employee friendly and have a focus on achieving business results using software tools. The product’s benefits must be easily understood and should quickly demonstrate value. We have successfully kept bringing original thought and real customer feedback into our product, coming out with unique and uncomplicated ways of solving business problems.

Emportant drives HR administration in real time and moves away from the concept of HR software being only a system of record. This model of ours has led to a success rate of > 80% in converting prospects to customers.

We are now looking at stepping up our efforts on social media and on overseas customer acquisitions. Establishing credibility amongst large customers continues to pose interesting challenges and working with business partners means we have to convince them about long term value vs upfront margins.

What is the future of software products vis-a-vis services?

Software products and services will always have their own separate customer segments. I don’t think software products can solve every business problem out there and services have an important part to play. Customers are beginning to realize that service consumption burdens them with unreasonable costs of operation and in an increasingly competitive world they would rather adopt a product if one exists which can meet their requirements. The benefits of products to the customer in terms of cost, sustainability and continuous improvement are already well established.

Look at Dropbox’s recently announced Datastore API. They have just commoditized the offline storage market for independent app makers. In fact, storage is now being turned from a service into a product as will be any service which can be wrapped into a standardized and repeatable delivery.

What learning would you like to share with other product companies?

Every launch of a new version is a learning experience for us. We are faced with the challenge of what to build in the next version, how does it affect pricing and how does it affect our current customers. What we’ve learnt is that you must always take good care of your current customers even as you keep expanding. To ensure this, we reward existing customers with new features for free whenever we release new versions and keep them protected on price changes perpetually.

What role do you foresee ProductNation to play in nurturing the growth of software products?

The biggest obstacle to exponential growth of Indian products is the lack of access to experts in marketing, product growth and cutting edge technology. Too many companies face mortality because of an idea or execution gone wrong.

ProductNation will hopefully help overcome these hurdles quickly and open up the opportunity for Indian products to be recognized globally.

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Pixel Jobs – Product review of a job portal by designers for designers

Pixel Jobs Image

Pixel Jobs, designed by the talented folks at Sparklin, is a refreshing look at the boring world of job portals. The problem to solve was simply, “How to get a job post seen by the best creative talent?” An old fashion job-board served as a physical metaphor to yield a clean, simple and inviting job portal cheekily named – Pixel Jobs. It has nifty filters to make searching easy and a straightforward form that allows you post a job in a few minutes.

Pixeljobs Screenshot

 

 

On April 3rd, Avinash and I had freewheeling chat with the young founders of Team Sparklin – Gurpreet Bedi and Himanshu Khanna – on the hows and whys behind the product. 

How did it all began? Are you trying to become Cleartrip for the job space?

“Pixel Jobs really started based on internal need of hiring the best designers. Sparklin started a Facebook group last year to reach out to the designers through personal networks and within a short time close to 1200 people had signed up. That clearly indicated a need for a specialized job site for designers. There are already sites for coders, so why not for designers. This is purely a niche product,” on the why.

“There was a concern on excessive moderating to ensure the postings to be creatively-relevant and accurate. I had to overly moderate the Facebook group for the first couple of months. But then everything kind of fell in line. The relevancy and quality of postings sort of improved on their own. Very little moderation was required. That’s when an open job forum became a viable next step. We still moderate but only for completeness.”

So what is the initial marketing strategy?

“We have deliberately taken a slow approach towards marketing this portal. First, we want to ensure that the platform is robust enough to handle large volumes. Second, by only allowing a selected well-known companies in the creative domain to post (for now) will increase the quality and credibility enough to not warrant a serious marketing push,” elaborating on the initial word of mouth approach.

How is the product going to evolve over next few months? Semantic search, LinkedIn connect, company-based hosting, additional views, etc. are some gaps.

“This is only a version 0. We are improving the product on a daily basis. All these features and many more are in the pipeline and you will see a gradual improvement over next few months. For instance we are working on an Android app to launched soon and targeting companies to use Pixel Jobs to host jobs on their sites. They can just use our embed our code with their branding on their site. There is a big need for this. For example, some of our clients already have a job board on their site but prefer to here.”

Even though the initial version is impressive, there are some user experience improvements to consider. For instance, extending the card metaphor by not going to the next page for a more fluid interaction (too many new windows), introducing category tags as alternate searching mechanism (search only for graphic designers), making search more central to the experience, introduce shared vocabulary (minimal difference between UX Designer and UI Designer), personalizing content based on previous searches and making it easy to follow-up on interesting jobs.

“We agree with all these points. Most of these are being worked on currently. For example, in the Android app you can favourite your job and city. Only those jobs will then be shown by default. These will help personalize your experience. Easier to do this on Android for now and eventually we will introduce them on the web as well.”

How do you plan to distinguish the experience between job seekers and posters?

“This will be a very important strategy once we build some traction and gain volume. For now the obvious focus is job seekers which will help drive better companies to the portal.”

Why is there a disconnect between brand Pixel Jobs and the URL (jobs.pixelonomics.com)? This could split the brand between Pixel Jobs and Pixelonomics. Better to build a single brand for consistent messaging.

Without elaborating on this too much, “We will merge these very shortly under a new brand name in the next release. We could also launch series of boards across other verticals as well – mobile developers, etc. under the same brand.”

It will be hard for the creatives to search on cluttered and difficult to use popular job sites from now on. 

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The dream of developing Enterprise Software Products from India

ProGen Business Solutions is a software products company with core focus in the Business Intelligence (BI) & Analytics space. The DNA of ProGen is built around R&D and Innovations, which drives the team to deliver State of the Art & High Quality BI Products that can add value to the customer organizations. Rahul Sharma, Founder & CEO of Progen talks about his joruney of building an Enterprise Software Product from India.

What is your Story? What inspired you to be an entrepreneur? 

I wanted to  create a Global Enterprise Software Products company from India that would challenge the market biggies and create a brand for Indian Products in the Enterprise Software Domain which is today largely  dominated by MNC products. 

Why and how did you start your company? Why this Area? 

The dream of developing Enterprise Software Products from India was the primary reason for starting ProGen. A True “Made in India” product that can deliver “Value for Money” to customers motivated us to take this road less travelled by Indian IT companies. 

The company was started as a garage set-up in Hyderabad with initial seed capital secured from like-minded individuals/friends who believed in the strength that India possesses in developing global software products. The initial team size in 2009 was 5 members, which has now grown to 25 plus. 

We selected the area of Business Intelligence (BI) & Analytics because of (i) a growing market demand (ii) Gaps in existing offerings with an opportunity to innovate both in terms of functionality as well as delivery (iii) Product Development expertise in the BI Domain.

Delivering superior value proposition through our simplified yet powerful BI Platform ‘pi’ has helped ProGen create a niche for itself. This is evident from the fact that within a short span of 1 year, customers across 4 countries trust our BI Platform for their daily & strategic decision making needs. Our customers include market leaders in their respective segments across diverse industry verticals such as: Airports, Travel, Pharma, FMCG, Retail, Distribution etc.

What is your product’s differentiator from the competitors? 

Our biggest differentiator when compared with established MNC offerings available in the market is our Product Design Approach. Unlike MNC vendors who conventionally follow a technology oriented design approach, we focus on a customer centric design approach that incorporates an Agile Product Development Philosophy. 

The approach has yielded tangible results in form of a simplified yet powerful BI Platform, which is as efficient and feature-rich as any of the contemporary product offerings from the established MNC players and is available at a cost much lower than other products. 

What is the biggest challenge ProGen has faced so far? 

Selling a “Made-in-India” Enterprise Platform to customers in India. 

Like any start-up company it was a challenge for us as well to sign the first few customers and being an Enterprise Product Start-up accentuated the problem further. It was extremely difficult for us to convince our customers about buying a business software package from a start-up that would eventually become the part of their organizations DNA in strategic and operational decision-making. There were multiple scenarios where business users at customer organizations had a buy-in on the value proposition from the Product but the IT Department was not willing to take the risk by engaging with a virgin product and it was frustrating for us to lose deals after months of sales efforts.

Rather the interesting point to note here is that the IT Teams in the prospect organizations still ask us ‘which Global Company’s BI software are you representing’. This reflects the acceptance level of Indian Enterprise Software Products among Indian customers and is indeed the biggest challenge that we face ALWAYS 

How did you address the challenge? 

The challenge was addressed through our Channel Partner Strategy.

Signing up channel partners for a new product in the Enterprise Application domain turned out to be as challenging and difficult as acquiring new customers but the mileage that a good partner brings to the table goes a long way in building the business. 

Similar to customers, channel partners also look for engaging mostly with established product brands or for companies from outside India. 

Channel Partner strategy requires lots of hard work in identifying and working with those partners who are open to align with new product companies and see the product as an opportunity to add value to the customer ecosystem. Our initial few partners sensed this opportunity and took the initiative of introducing our BI offering to their customers or to the prospects they had. 

Who is your customer? 

In today’s world, data is growing at a rapid pace across all types of organizations irrespective of their size and industry vertical. BI as an application is a need of the hour across customers and verticals. Being a company in the platform business our customers are not restricted to a specific vertical or size and they are scattered across verticals such as: Airports, Travel, FMCG, Retail, Contact Center, and Pharmaceuticals. 

Our target customers can be basically classified as “Value-Conscious” organizations that are not “Brand-Conscious” and are looking towards a Product that is a combination of “Rich Features” and “Value for Money” 

What’s been your success mantra in expanding to emerging markets?

1)     Keep your Product Simple

2)     Clearly Communicate the Value Proposition

3)     Trust your Channel Partners 

What are your future plans? 

In the next Financial Year (2013-14) we target to increase our customer base in India with a growth focus on Middle East and Australian/APAC markets and augment our BI Platform with new product features/modules that are currently under different stages of testing and development. 

In the Medium term we plan to expand to other global markets and release our BIG DATA Analytics engine integrated with our BI Platform. 

Plans of providing a SaaS/PaaS based cloud offering in the BI Domain to customers in the Matured Markets of USA, UK, and other parts of the World is also in the pipeline and official release on the same will be announced in the coming months. 

What have been your BIG lessons – personal, professional and otherwise? 

Running an Enterprise Products Business in India is a mix of “Loads of Patience without losing Focus on R&D” coupled with right amount of aggression and perseverance. 

Overnight success in Enterprise Products domain is unheard of and one should be prepared enough to face the challenges presented by different phases with each phase demanding different approach and strategy.

What would you like to tell someone, who is struggling or planning to start a product company?

            • Get the right team in place and plan for a strong resourcing strategy
            • Stay Focused on your R&D Mission
            • Don’t get lured by the early revenue opportunities from services that may dilute the product vision
            • Raise Sufficient Seed Capital (if you plan to) that can cover the cost of your first commercial release and also considers for first 2-3 paying customer acquisition cost depending on your Sales Cycle. Early dilutions should not be seen as a threat and should not stop you from raising bigger money (if it’s available)
            • Work hard to get Testimonials and References from your initial customer

 

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How Visual Website Optimizer got to 2,500+ paid customers through great content and rigorous A/B tests

Last month, I promised to bring you stories of how Indian startups took their products to the world and got the inside scoop on how WebEngage used educational content and live demos to get to 7,000 users in less than 15 months. While I have been slow in bringing more stories to you, this one should more than make up for it.

In this post, I bring you the story of Visual Website Optimizer in conversation with its founder and CEO Paras Chopra. Visual Website Optimizer is an easy-to-use A/B testing tool that allows marketing professionals to create different A/B tests using a point-and-click editor (without needing any HTML knowledge). It is one of India’s fastest growing startups and has got to 2,500+ paid customers including the likes of Microsoft, AMD, Groupon & Airbnb using great content and rigorous A/B tests.

Let’s get started.

How did you get the initial buzz going for your product? 

Paras: Initial buzz was entirely product driven. The concept of visual A/B testing was non-existent then so the product was radical in that sense. A/B testing existed, but it wasn’t this easy.

Did you have marketing built into your product, and were you marketing your product as you were developing it? Or did it all start only after you had a finished product?

Yes, we detected successful A/B tests and requested for a case study from the customer automatically. The case studies gave a lot of buzz. First MVP was done in a month and after that product evolution and marketing started simultaneously.

Did you have a marketing plan in place when you started?

No, I did not have any plan. It was very organic without any plan whatsoever.

Who do you pitch your product to in a company?

Marketing analysts. Our target customer is a person who actually does the A/B tests.

I remember you mentioned on your Mixergy interview that you didn’t want the world to know that you were a one-man show to begin with. Was it difficult to look like a credible company that way? And was that an even bigger issues being an Indian product company?

No, it wasn’t difficult. As long as they were getting a good product and quick service, the customers didn’t care to verify whether it was a one-man show or a 100-people company. Interestingly, many people still don’t know we’re an Indian company.

As Visual Website Optimizer grew, how have you scaled up your marketing? Increased frequency in terms of content? Bigger campaigns? Targeting higher-value customers for your enterprise plan? Also, how have you scaled up your team to take care of these activities?

A bunch of things. Increased frequency from one post per week to two on our blog. Parallel guest posting. Making guides and dedicated landing pages for SEO. Comprehensive retargeting. Started PPC and display to measure ROI. I don’t think marketing should aim to target higher-value customers. They probably need a lot more offline interaction, so marketing works on nurturing them currently.

On the people side, we scaled it by bringing in additional super-smart people. Including me, right now we have a team of three. We’re looking to expand it by adding three more people. Yes, now we have a plan and going forward clearly defined roles in content marketing, generalist tasks, paid marketing and design.

What marketing channels have you used? What has been the most effective for you? Why have they been so effective?

Most effective has been our own case studies and comprehensive guest posts in prominent publications such as Smashing Magazine, SEOMoz, CopyBlogger, MarketingProfs, etc. We also nurture our user base by regularly sending them case studies and use cases.

What about paid channels? How do you go about choosing the right ones? 

We’re still learning on this, but the key is to explore new paid marketing channels that haven’t been exploited yet. All good paid marketing channels dry up ultimately and ROI dwindles. So you have to be on the edge of exploration. That’s how markets work.

How do you measure the success of your marketing campaigns? Do you compare them to your other campaigns? Industry benchmarks? Or just get an overall feel whether they are successful or not?

The only metric our marketing cares about is number of free trials. I believe that once free trial is generated, product should speak for itself so revenue should be a function of product if free trials are from the intended audience. Shares, visits, etc. are all fluff. We don’t obsess about them. We do compare all our activities to see which one gives most bang for the buck and most volume.

How do you use VWO to improve your own conversion rates? What are the top 2-3 biggest successes you have had from A/B testing?

We conduct many tests. Some examples:

http://visualwebsiteoptimizer.com/split-testing-blog/headline-test-increases-clickthroughs/

Behavioral targeting: http://visualwebsiteoptimizer.com/split-testing-blog/behavioral-targeting-case-study/

Heatmaps: http://visualwebsiteoptimizer.com/split-testing-blog/increase-conversions-using-heatmaps/

http://visualwebsiteoptimizer.com/split-testing-blog/left-vs-right-sidebar-which-layout-works-best/

Right now, five different tests are running on our website :)

Apart from the A/B tests, what other numbers do you look up on the website? Funnel drop-offs, bounce rate, what else do you look at?

Navigation paths and traffic sources with highest conversion rate.

I love the blog you have. How did that get started? And how do you measure its impact?

I love writing. Have written a book on Nihilism, so I can write whole day long :) Impact, was measured in terms of traffic to blog and then conversion of that traffic to trials.

What kind of community do you have around your products? How do you keep them engaged?

We have a very lively community on Twitter, GPlus, Facebook and our blog. We have 3000+ followers, 2000+ blog readers and remember that A/B testing is a niche. In terms of content, again case studies with actual learning work best. Just numbers without flesh doesn’t work.

What about partnerships and integrations? ClickTale, Drupal, how have they helped you increase your reach? How did you go about getting them?

Yes, partnerships increase reach if done properly. For commercial companies like ClickTale, they approached us. For open-source like Drupal, we simply developed modules.

What about your personal brand? Have you built that and used it to take the word out about your products in turn?

Yes, I think so. My blog and interviews such as on Mixergy help a lot. Our bootstrapped story helps a ton too.

What about the marketing team? How big is it and what roles do each of them play? What do you think is an ideal marketing team for a tech startup?

Ideal marketing team is: content, paid, generalist and designer.

We have a lot of good products being built in India but very few go on to become blockbusters. Where do you think these startups are faltering with their marketing? What advice do you have for them?

I think they do a very poor job on using the content effectively. My advice would be to product great content consistently, share it with influencers, build a brand of the company around content and eductation and just keep scaling that up.

That’s some great advice Paras. Thanks a lot for sharing them and being an inspiration to the Indian startup community at large.

Dear readers, what did you think of the interview? What else would you like to know when I talk to more successful startups about their marketing? Let me know in the comments.

Reblogged from PokeandBite.com

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Andy is a mobile robot platform that uses a Smartphone at its core.

Andy is a personal robot enabled by the intelligence of an Android Smartphone or any Android device. Personal or hobby robots till date have been unaffordable due to the high costs of the hardware involved. Abheek Bose, Andy’s creator shares the journey of building Andy and the factors that influenced its development.

What happened earlier in your career that led to your founding Andy?
Abheek Bose: We were always keen upon entering the educational and personal robotics sector but the challenge was keeping the price points low, especially for the Indian market.

After attending a mobile conference on advancement of smart phones, we identified an opportunity to utilize them and build cost effective robot systems for education and personal use 

What is Andy and how does it add value to consumers?
Abheek Bose: Andy is a mobile robot platform that uses a Smartphone at its core.

On strapping the phone onto the Andy base, the entire phone becomes a part of the robot:

  1. Andy is therefore now equipped with sensors like Camera, GPS, Wifi, Bluetooth Compass, Microphone, Touch Screen just to name a few.
  2. Andy is also highly programmable where the user can either program Andy or simply download apps on the phone which make Andy execute various functions
  3. In short, Andy is a robot with very sophisticated features yet highly affordable on an individual basis (Typically such robots costs between $2000 – 5000 while Andy is below $120)

With Andy, students and hobbyists can now afford to own their personal robot, hack and develop various applications as well as share them with one another. Users of lower age groups can actually learn the concepts of computing and engineering using Andy in a more interactive and entertaining way.

What is your target market?
Abheek Bose: Anyone in the age group of 14 to 25 years is our target user group. Andy falls in the personal robotics market currently estimated to be around USD 1.3 billion.

What is your product’s differentiator from competitors?
Abheek Bose: If you really look at the differentiators, they fall into two categories, Technology and Strategic. As far as technology differentiators are concerned they are:

  1. Andy uses the Android Platform which is open source, well supported and maintains a strong developer community around it.
  2. The hardware schematics and software developed are open source and we are providing an SDK to enable the target user group further.
  3. Andy already has an initial developer community involving top educational institutes like IIIT-Bangalore, VJTI Mumbai and IIT-Bombay. This community is also growing rapidly with more engineering colleges and schools enrolling into our developer program

Operational and Strategy Differentiators
Andy supply chain is well established and streamlined with the necessary arrangements to go for mass production.

We have finalized with the suppliers for all the components including chassis, electronics, batteries and other peripherals and the process is also set where we can order in lots and receive the same in our office within 2 – 3 weeks time. Andy distribution involves various channels partners including Robot training companies (education) as well as large retail formats (consumer / personal) to maximize reach.

We have currently the following partners in the educational / community development space

  1. Gade Autonomous Systems, Mumbai
  2. Open Robotics Club, Indore
  3. VJTI, SRA, Mumbai
  4. Andy design has also been registered with the Registrar of designs to prevent copycat products.

What is the biggest challenge Andy has faced so far? How did you address the challenge?
Abheek Bose: Out of the many close contenders, the biggest challenge was to streamline operations.

It was critical that the suppliers of Andy parts were reliable, assured  high quality and also within the target budgets.

The challenge was addressed (and we are still improving this) by trying out various suppliers during an early prototyping phase and creating procurement processes as well as conducting quality tests for the same.

Online portals like AliExpress and EBay were very useful to select the correct suppliers.

How has the recent Mentor program from Mindsphere helped your company? What mistakes/pitfalls has it helped you avoid?
Abheek Bose:Mindsphere has been absolutely crucial in Andy’s development. It is because of MindSphere’s involvement that we could complete the product launch from concept to the beta prototype in just 88 days!

Mindsphere has been involved in all aspects of the product development cycle since the conceptual stages taking on a crucial role in

  1. Prototype development and design ergonomics
  2. Market research, exploration & preparation (Go to market strategizing)
  3. Operations Management and Processes
  4. Project Financials and Budgeting
  5. Pricing Strategies
  6. Distribution Planning

What do the next 12-24 months hold for Andy?
The next steps with Andy would be to concentrate on Sales, Distribution and Community Development. In parallel we will also be working on next generation design and product improvements.

Abheek is Andy’s creator and oversees the development as well as the business of Andy. Abheek’s mechanical engineering and software development roots are responsible for the Andy body design as well as the base software. Abheek also manages the overall business growth of Andy and looks into new partnerships, markets and users. Abheek when not hacking on Andy, loves to play around with gadgets, listen to music and recently taken a liking to reading Dilbert! Abheek is also a big foodie and loves trying out new places to experiment.

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CollateBox: Cloud-Based Software Simplifies Small Biz Collaboration

Small businesses with growing lists of data are the ideal customer for U.S.-incorporated CollateBox, a software product of India-based WOLF Frameworks. Sunny Ghosh, co-founder and CEO, describes CollateBox’s value proposition and the factors that influenced its development. This article is brought to SandHill readers in partnership with ProductNation. 

SandHill.com: Please describe your product and how it provides business value for your customers.

Sunny Ghosh: Companies collaborate on lists of data with a lot of people, internally and externally, for different projects. But organizing and keeping track of these growing lists is a nightmare — from scouting mailboxes to finding the latest spreadsheet version to collect validated data.

CollateBox is a simpler way to collaborate on a list without creating and emailing multiple copies of spreadsheets. It lets users collect data from multiple sources, organize and securely share parts of a growing list with team members. And there’s no software to install; everything works online in a secure cloud environment and can be used for any business process.

CollateBox also helps companies set up processes to maintain a workflow and keep data organized, saving precious time and money. Users can also view instant notifications and summaries on every record of their data with the added ability to comment and add attachments. 

SandHill.com: Please describe your market and typical users of CollateBox.

Sunny Ghosh: CollateBox is best suitable for companies and teams with 100 people or less. It is suitable to any business scenario that involves growing lists of data. HR managers use it to work together with HR executives to qualify a list of new recruits. Companies can use it for sales leads, automatically assigning prospects to the sales team as a new lead is qualified. A marketing coordinator can use CollateBox to maintain a single list to coordinate email campaign dates with the marketing team.

Other examples of how small companies use our product include: tracking production updates and sharing it with top management, allocating service requests to support agents and visualize a summary of service statuses, and an operations manager can use it to recruit new partners using online forms and automatically collate all data in their CollateBox account.

SandHill.com: How did your company and CollateBox originate?

Sunny Ghosh: We founded WOLF Frameworks in 2006 with an aim to democratize computing by introducing savings of more than 60 percent in time and cost and with zero technical coding skill for developing and delivering new business software.

Our first WOLF product was an Online Database Application Platform. Launched in 2008, it helps database architects and application developers to rapidly configure and run all sorts of online applications without writing a single line of technical code — even for firing complex business logic. We netted over 40,000 end users during out first 30 months of business.

A year later, our Platform as a Service product was being used in more than 20 business applications. In 2010 WOLF bagged the Information Week Silver Edge Awards at INTEROP and was named GARTNER Cool Vendor Award for Platform as a Service worldwide.

In 2011, we ideated on DBMonk, which was incubated by VertExperts LLP for early validation.

DBMonk renamed to CollateBox Inc. and was incorporated in October 2011, in the state of Delaware, USA. We released the minimum viable product for selected users in 2012 and subsequently had more than 10,000 user registrations. In 2013 we signed up our first set of paid customers for CollateBox and released version 2.2 for more than 1,000 users.

Read the complete post at Sandhill.com

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The day Zest.Md picked on smartest brain for inputs at #PNMeetup

I met Avinash a few weeks back to share details about zest.md, and to discuss some of the challenges which we are facing. Avinash, helped me to understand a lot of issues better, and invited me to be a part of the #PNMeetup to discuss it with a larger group. To be honest, I was apprehensive initially, but seeing the conviction with which Avinash said that it would help us, I agreed and I am so glad that we did go and share our challenges at the #PNMeetup! 

Zest.Md is a SaaS platform which provides with medical practitioners with a solution to get started with online consultation process, using their own website. One of the key challenges which we shared with the group was on how to drive initial engagement with the medical practitioners who sign up. Another aspect which we discussed was around pricing. Currently we have a single price solution, and we were in the process of considering Freemium model – what should we keep in mind while designing Freemium so that we don’t end up losing paying clients. 

#PNMeetup was a great experience it was very refreshing to be amongst people who have been involved with various stages of product development, themselves. It was a very different space than the other entrepreneurship events that I have been in, almost everybody here was currently running an online product company, and they understood dilemma and the criticality of the decision around such questions. 

I had attended along with two other members of my team, and the one of the greatest reaffirmation was that, there is no single answer or a single point of view when it comes to even simple questions pertaining to a product. Many a times we, as young start-ups, tend to get bogged down or keep changing paths based on feedback from a single person. Being at #PNMeetup gave a reassurance that it is justified that we were so concerned about our decisions on these questions as they are not so straightforward, and at the same time the forum was a great place for us to take feedback from a group as a whole, and it helped us to identify the range of possible solutions from which we could chart out our own solution. 🙂

Thanks Amit, Devendra & Avinash for helping me in the presentation and briefing you provided and for the opportunity.  I really liked the venue and seating arrangement, and I feel that the ambience was instrumental in creating an informal atmosphere where people could exchange frank and honest opinions.  

P.S.: The highlight of the day was meeting up with Amit Ranjan, co-founder Slideshare and to see him share his thoughts candidly! 🙂

My name is Vinayak and I’m the Founder & CEO at Zest.md. 

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How Adoor Gopalakrishnan’s Kathapurushan became a Software Product Entrepreneur ?

From being the protagonist of an Adoor Gopalakrishnan national award  winning movie to a graphics trainer, from a book publisher to a printer, from services to products, our guest today has been there, done that. Meet Vish, the MD of Logical Steps.

ProductNation: Hi Vish. Welcome to Product Nation. Let us begin with your story.

Vish: I was born in an entrepreneurial family. My family ran a printing press in Kerala. So I grew up living entrepreneurship and also picking up skills to run a printing press. Childhood was exciting, as we were always creating something. As far as my education is concerned, I enrolled for an undergraduate Physics program at the Moscow State University. University had some of the finest minds in Physics teaching the subject. But, the 1991 coup cut short all this excitement. This brief stint while I was in Moscow, made me realize that college education does not prepare you for life. Though, I was not keen to go back to college, it was family pressure that saw me write three years physics papers in one shot. All this for a degree from the University of Kerala, Trivandrum. Isn’t degree everything?

It was around the same time that I got introduced to computers. My father had made investments into offset printing and desktop publishing. I soon found an entire computer science department to myself, right from laser printers to 486 machines. I learnt everything from scratch. It was time for my first fling with entrepreneurship. It was an MS-DOS pocket reference manual. Using a microsoft reference manual as the guide, I printed out some MS-DOS reference manual copies and handed it over to a local bookshop for sale. Surprisingly, the book shop came back for more. Simultaneously, I also ventured into Desktop publishing training, as the printing industry was moving in that direction. These experiments gave me the confidence that I could do something on my own

ProductNation: When did you get the time to do the Adoor Gopalakrishnan movie? And why do you consider it your first product experience?

Vish: Adoor Gopalakrishnan is a family friend and I had done a small role in one of his earlier films. He talked me into playing the lead role in a film called Kathapurushan. It went on to win the National Award in 1996. He knew about my background in printing. So, during the film, I got involved into many aspects of the movie production – recording audio, printing of collateral and special books. And working with Adoor Gopalakrishnan, who cared about every little detail and to experience his passion and leadership. I consider that experience extremely precious and a sort of first in making a product.

ProductNation: Which were the other movies you did?

Vish: No, I went back into computer training with a company called Tandem. Tandem, which was based in Trivandrum, sent me to CDAC Pune for a course called DACA – Diploma in Advanced Computer Arts. As a trainer, I was to learn this course and come back to Trivandrum to teach. At this course, I was the only one from a non-arts background, as the others were all from JJ and similar schools. But, I topped the class and got a break into advertising with a Kirloskar group company – Pratibha Advertising. One of the noteworthy projects that I did while at Pratibha was a digital kiosk that was showcased at the first Auto Expo in New Delhi. I quickly realised that digital advertising in India at that time was still very early. So I packed up my bags and went to Singapore for a teaching assignment with a University. But, I ended up joining a digital marketing company there. It was here that I spent close to five years till the dot com bust in 2000 consumed it. During my stint here, I got in depth experience into e-learning.

ProductNation: Is that when you started your current company, logical steps ?

Vish: Yes. I came back to India, after the dotcom bust. And that is when we started Logical Steps. We began by supplying learning content for television. We were paid 10% of the contracted amount. That is when I understood the trouble of doing business in India. So, I went back to Singapore to source business and keep the business running. It was challenging. I was using my salary to finance the business. I was not keen to close down and let go of my staff who had picked up extremely useful skills. So, we kept going. It was during this that we got a chance to service AIG for one of their projects. So that is how our services business started.

ProductNation: What happened to e-learning, then? And the platform? How did you start silver bullet?

Vish: An opportunity came up to create an e-learning engine for the US Market in the area of Medical Entrance exam called MCAT. A doctor who was considered the guru of MCAT had already created a large amount of content plus created analytics metrics to appraise students. We were given the project to create a platform that could provide all of this. This project gave us tremendous exposure to learning frameworks and gave us the idea to create a product on our own. That is how the idea of SilverBullet came up.By that time, I had also realised the limitations of a services business. So, we were all set for a product pitch in late 2010. While we built the platform quickly, content became a challenge. So we had to invest resources in training teachers to address this issue of content. This consumed our resources and it was our services business that was feeding silverbullet. It took us some time to adjust to this new reality, as we were dealing with an individual customer, unlike a corporate entity as in our services business.

ProductNation: Let us talk about silver bullet? Any learnings that you would like to share.

Vish: Silver Bullet is an online learning system for engineering and medical entrance examinations in India. There have been tremendous learnings. Unlike servicing a business, in this case, it was a B2C online product. It took us some time to figure out our Go-To-Market approach. We felt schools were the touch point, but it wasn’t so. Then we tried facebook, and it wasn’t the touch point. The most profound insight came from my 10 year old daughter, who frankly said that students are not interested in adding more studies to their daily work. She went ahead and said that no one would like to put themselves into trouble by opting for a Free Trial. How true? Students are already overworked. In all this, we figured out that it is the parent who is the touch point. And the parent was in a totally different world and a world that wasn’t online. The only way to reach them was through traditional media. It was then, that we checked out the media budgets of other online learning companies and found that they spend 19% to 20% of their revenue on ad budgets that run into crores, it is a totally different league. And that is how these companies are reaching out to parents. Parents are more than happy to add to the kid’s collection of material to consume.

ProductNation: Interesting, allow us to end this interview, with a difficult question. Looking back on your career, it is easy to see that you have been all over the place. How has it helped you in approaching your product business?

Vish: [Laughs] The product business is much like the movie business. If you see, my experience in diverse areas has given me ideas and the aptitude to create a wonderful product. Whether it is design or delivery, content or its packaging, all my earlier experience have served me well in developing Silver Bullet.

ProductNation: Wearing two hats at the same time i.e. services and products. What would you prefer? And what challenges do you face, while doing so?

Vish: Product without a doubt. It is something that you can own. But, when working on a product, especially when you are just starting off, managing the internal aspirations of the team becomes difficult.

ProductNation: Thank you, Vish for talking to ProductNation. We wish you all the very best in living up to these challenges.

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Q&A with ERP Ecommerce Company, InSync Solutions

InSync Solutions Ltd. provides ecommerce solutions for online retail businesses. Many software services companies in India are evolving to products companies. Atul Gupta, founder and managing director of InSync Solutions Ltd., describes how InSync made this transition. 

SandHill.com: When did you launch InSync as a services company, and what led to the switch to a products focus? 

Atul Gupta: We launched in October 2005 in Kolkata, India. At the time it was the only prudent career choice for me, as I was unwilling to work as an employee.

InSync was made to be a service company targeting small and midsize businesses (SMBs). But after four years we realized we couldn’t build a sustainable business with services. There were too many challenges. So we changed direction in the winter of 2009, switching our focus to products and incorporating the learnings we had gained up to that point.

SandHill.com: Did you also encounter unanticipated challenges when you started out as a product company? 

Atul Gupta: Once we changed gears and became a product company things started to fall in place. The challenges we have encountered since then are not related to building great products and delivering them to customers; our challenges since then are related to non-core activities of running the company. 

SandHill.com: What steps have you taken to overcome the challenges of an entrepreneur dealing with running a company? 

Atul Gupta: Having a strong management team / leadership team is very important, and it is equally important that they bring in unique skills on to the table. 

SandHill.com: Please describe your products and their differentiation in the market. 

Atul Gupta: Our Flagship Product is SBOeConnect, which integrates SAP Business One ERP and Magento eCommerce. SBOeConnect has gained good traction in the market so far. We have acquired the business of more than 100 Magento merchants globally with 95 percent customer retention, which means the customers benefit from our product.

SBOeConnect is the number-one choice for an ecommerce platform among SAP Business One users. Our market focus is on SAP Business One ERP users in the retail industry.

As to differentiation, no other ecommerce solutions have the capability of back-office ERP, and none of the ERP systems so far have been able to come up with a compelling ecommerce solution.

Businesses need to use multiple systems to be functional. We help businesses keep their investments in multiple systems intact and yet be efficient by integrating these systems.

Read the complete interview at Sandhill.com