Posted on

Users or Customers?

If you’ve been around the internet startup world for long enough, you’ve probably engaged in the user-customer debate at least once. Who’s the user? Who’s the customer? Who should we be focusing on?

I’m going to start off a series of posts talking about the basic elements of Platform Thinking and this being the first, I’d like to talk about the User-Customer debate since that lies at the very heart of how we think about the design of internet businesses.

If we put on the Platform Thinking lens, we essentially do away with the user-customer debate and replace it with a more fundamental view of how your business functions. Here’s how:

Most internet businesses can be viewed as a platform on which value is created and consumed. E.g. YouTube.com is a platform on which video up loaders create value and viewers consumer value. With that in mind, let’s move on…

Who’s the user? 

Quite simply, the user is anyone who uses the product. Now that doesn’t help us too much, so let’s break that down a little.

A user may perform one of two roles:

Producer: Someone who creates supply or responds to demand. If you think of YouTube, whenever a user adds a video, he’s acting in a Producer role, creating supply. A person answering a question on Quora is a producer, responding to demand. 

Consumer: Someone who creates demand or consumes supply. A video viewer is a consumer on Youtube. A question asked on Quora (as well as others viewing the question and answers) is playing a consumer role. 

Note that these are roles, not user segments. If you think of eBay, the sellers are the producers and the buyers are the consumers so we have two distinct segments. But on Twitter, every time you tweet, you are in a producer role, and if you start reading your tweet stream the next second, you’ve moved to consumer mode. 

Splitting the term ‘user’ into these two roles helps us understand the exact motivations and actions for the user while using the product.Understanding the motivations and actions helps us design tools that enable the users to perform these actions instead of loading the product with features. 

Most products have more than one producer or consumer role. E.g. On LinkedIn, professionals using LinkedIn are producers and consumers of interactions and status updates, thought leaders are privileged producers and recruiters are producers of job listings and consumers of relevant user profiles. 

This brings us to the third party in the debate… 

Who’s the customer? 

As in the offline world, the customer is someone who pays. The customer may not be part of the central demand-supply equation. The sole defining criterion for a customer is that the customer pays money to the business. 

The customer may be:

  1. The producer: e.g. Vimeo. Video up loaders can pay for premium features.
  2. The consumer: e.g. New York Times. Readers pay to access news
  3. Someone else: e.g. Facebook. The advertiser is the customer 

Again, multiple parties may be customers. On LinkedIn, we have users (who play both consumer and producer roles) as customers as well as advertisers and recruiters. 

To summarize:

  1. Every internet business has three distinct types of roles: Producer, Consumer and Customer
  2. There may be multiple roles of each type on every business
  3. Producers create supply or respond to demand
  4. Consumers create demand or consume supply
  5. Customers pay  

A few quick examples:  

Zappos.com

Producer: Zappos.com itself is the producer; sourcing shoes and creating supply.

Consumer: Users browsing and buying on the storefront.

Customer: The segment of consumers actually buying shoes.

AirBnB

Producer: Hosts, Review Writers

Consumer: Travelers, Review Readers

Customer: Technically, the hosts are the customers since they forgo a cut of the transaction and share it with AirBnB 

Yelp

Producer: Yelp (creates listings), Review Writers

Consumer: Consumers in the city, Review Readers

Customer: Merchants that advertise 

The New York Times

Producer: The New York Times

Consumer: Readers

Customer: Readers, Advertisers 

I’d love to hear your thoughts. This is the first in a series of posts where I intend to share the essential tenets of Platform Thinking and how to use it to design internet businesses. Feel free to leave your thoughts below.

Note: This article was first featured on Sangeet’s blog, Platform Thinking (http://platformed.info). Platform Thinking has been ranked among the top blogs for startups, globally, by the Harvard Business School Centre for Entrepreneurship.

Posted on

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

Posted on

Digital Marketing for the B2B Landscape

The B2B buying process has undergone a transformation, and so has the B2B customer. Let’s roll the clock back in time. Information about your company, services, products and solutions was not readily available, or if it was, then not readily accessible. The sales representatives were the first touch points for your customers to gather any information about your services, and for your company to gather information about them and generate leads.

This was a time when salespeople were ‘actively’ trying to sell products and services to potential customers, which is otherwise known as ‘interruption marketing’. Traditional marketing tactics like direct mail, telemarketing, tradeshows, etc. were the means to reach out to prospects. And there was no way to gauge the interest of your target audience in your offerings.

Now let’s come back to the present. Customers are no longer waiting for your salesperson to ring the door bell, figuratively speaking. With the emergence of digital technologies came information abundance, and with it a highly informed B2B buyer. The internet, social media and other digital platforms have overwhelmed the target audience with information with a multitude of options and competitive offerings to consider. While earlier, the objective was to capture your prospects’ attention, the objective now is to focus the attention towards your company. The changing B2B landscape has thus necessitated a change in the tactics for marketers, and this is where digital marketing comes into the picture.

Take a look at the modern B2B customer. According to the Marketing Leadership Council, on average, customers progress 60% of the way through the purchase decision-making process before engaging a sales-rep. 78% of B2B buyers start their research with online search (Eloqua) and 33% of global B2B buyers use social media to engage with their vendors (Social media B2B). These statistics clearly show the upending of the customer’s role in the sales cycle.

The role of digital marketing is to address this shift in the sales process by reaching the target audience in the right stages. The one common thread running through the transformation is building relationships. How well marketers build strong digital relationships with the customer base can impact the success of the marketing objectives. Companies have thus modified their B2B marketing strategies to include the digital channels and platforms like email, social media, content marketing, etc. to improve the relationship-building process, establish a strong brand presence and drive lead generation and nurturing.

Digital Marketing helps marketers meet major marketing objectives that they face in a B2B landscape.

Strong brand presence: By reaching the target audience early on in the sales cycle with a focused and relevant approach, digital marketing helps establish a strong brand presence with the audience. Content marketing creates a strong impact by catering to the information needs of the customers throughout the entire sales process and drives the demand generation for the products and services.

Communication Framework: Gone are the days when marketers struggled to reach and educate your prospects with relevant information. Digital Marketing creates a communication framework through multiple options like email, websites, search engines and social media which expand the reach and at the same time, allow companies to establish communities where potential customers interact among themselves and with the company easily.

Lead Generation and Nurturing: By syndicating content and information across a variety of digital channels and networks, lead generation can be improved. Digital marketing enables implementing highly relevant and focused targeting for the campaigns which ensures that the number of ‘relevant’ leads goes up. Providing interesting educational content for these prospects can build a brand recall and product preference much before the buy stage.

Analytics and ROI:  The challenge with traditional marketing tactics is a lack of, or minimal, scope for analytics and measuring the Return of Investment. Digital Marketing provides actionable, updated insights for marketers on their initiatives which allow them to fine tune and optimize them. It also enables the measurement of ROI for each initiative to evaluate which of them work at any specific time and make the marketing plans more effective.

With more innovations and technologies in the future, more and more companies are adopting digital marketing as a significant part of the marketing blueprint. Digital is indeed the future!

Posted on

How a much needed niche banking product was born – The iCreate story.

ProductNation caught up with iCreate Software co-founder Naren Santhanam, on what went in to the making of a successful product.

It was circa 2006 when Naren met Anup while they were consultants on the Banking vertical at a technology MNC. They knew from experience that banks had a challenge in accessing information across different systems and there was potential in pioneering something exciting. Over a series of extensive debates they decided on developing a decision enablement product exclusively for the banking sector b leveraging the best of Business Intelligence and Data Integration technologies. 

At that point in time Banks which wanted to have BI & analytics had to develop a customized solution over the available tools, employing the services of an SI. The banks functional team would provide the business requirements. This resulted in substantial lead times apart from higher costs; even then, id guarantee the desired results. 

The big idea

The iCreate idea was based on the founders’ expertise with the functional nature of systems that banks used and other transactional systems. They conceptualized a product that could connect with the bank’s ecosystem quickly. 

This ensured the product could be up and running powering the bank’s decision needs in a fifth of the time conventional approaches take. Also, ideated were new versions/modules of the product that could be rolled out quickly, making the product scalable and customizable to a bank’s requirements.

Both Naren and Anup were confident that banks in emerging markets would see most value in their product as they were still in early phase of technology adoption and competition was low.

Between then and 2009 they invested substantial efforts in understanding the intricacies and pain-points faced by the banks in emerging economies before deciding to focus efforts on them. 

Naren does a quick flashback, “It was an early stage in my career and life, when I had an abundance of energy and not too many strings attached, which made it easier for me. We were clear on the direction, given our past lives in the banking technology space. The big idea was to create a banking-specific decision enablement product”. Since it was a capital intensive proposition, they agreed to embark on the consulting route and then deploy the insights in shaping the product. Naren continues “Yes, there were several challenges of staying afloat and not losing focus on the long-term goal of creating a product company. The last 7 years have been the most fulfilling and exciting ones- something I wouldn’t have ever experienced in corporate life”.

On high octane

They began providing high-end banking technology consulting to select banks in Africa. In 2009 they approached the prestigious National Bank of Kuwait (NBK); while the product was still in its infancy. It was their domain knowledge and technology expertise that won them the account. NBK signed up iCreate to play a pivotal role in their ambitious enterprise transformation initiative, which is lauded as a first-of-its kind for a start-up. By late 2009 iCreate was well entrenched in the banking decision support space. This was around the time they received their first round of VC funding from IDG Ventures India.

By then the product had started taking shape and was christened ‘Biz$core’ – a unique name that encapsulated BI, Core of Banking Systems, Score for Scorecards, Biz for Business and the $ sign signifying money.

iCreate began quickly onboarding the best tech brains to work on the product. They also put together a global GTM team with a ‘whatever-it-takes’ DNA to take Biz$core’s unique value proposition to banks worldwide. By then Vivek Subramanyam was onboard as CEO to pilot iCreate’s growth and revenue strategy. 

Proof of the pudding 

With the change in strategy, the journey started getting more exciting and iCreate found itself in an accelerated growth mode. iCreate’s banking customer count today stands at an impressive 22, of which 16 were added in the last year and a half alone. From a revenue stream comprising 25% product sales and 75% consulting services in early 2010, the split reversed to 70% product sales and 30% from consulting services towards close of FY 2013. 

iCreate’s early stage  banking customers from across diverse geographies, played an active role in in defining their products into a well-rounded ones. Naren explains “Leaders like HDFC Bank and IndusInd Bank with complex business processes, trade finance specialists like Ghana International Bank, Metro Bank – UK, progressive banks like East West Bank, Philippines helped us tremendously with their insights as we were developing our product.” 

Mission to achieve the vision 

iCreate today boasts of five banking-specific products that span critical areas like decision enablement, risk, compliance, regulatory reporting and Basel; and has plans to launch five more during the next year. The recent series-B funding from Sequoia Capital and IDG is expected to help them further expand their product portfolio and foray into newer geographies including North America. 

“Our focus on emerging markets like Asia, Africa and West Asia continue, and we have already established our presence in markets such as Egypt and the Philippines. There are two promising deals in the offing from the UK as well. Most importantly, there is that sense of pride of having created a product that completely changes the way banks look at information management”, remarks Naren. 

iCreate’s road map definitely looks interesting and seems to be aligning well with their vision statement what they call the ‘Vision 5:50:250’, i.e., to be among the top 5 in BI for banking space, win 50 strategic banking clients world-wide and touch Rs. 250 crore in revenues by FY 2015.

Posted on

Find out what emerged when the Geeks met #Dilliwallas #GOAP

It was a usual Thursday morning, chaos at the Mathura Road, but once you got on to the 91SpringBoard office, you could feel the aroma of the paints, etc in the new office which is beautifully done and very colourful. Few guys were sipping their early morning coffee and some interactions by entrepreneurs and some folks who usually give gyaan to them:). Few minutes and you could see the geeks walking in, interacting the dilliwallas and then also trying to figure out a space where they can settle down.
Yatin from MoonLighting kicked of the session and the Geeks introduced themselves to the #dilliwallas. We had around 50-60 startups from dilli who were here to meet with the Geeks….some of the best startups in NCR were present and we had the Bangalore Product guy – Sharad Sharma who was there to set the ball rolling. He started his talk on how entrepreneurship is happening in the small cities of rural India, software products are being made in this New India. Delhi, Mumbai and Bangalore are seeming to be focusing on fixed templates, whereas the rural India’s innovation are more creative disruptions and they seem to be focusing on problems and therefore providing solutions to these problems. The guys in the smaller cities and rural areas are keeping a more open mind and are more willing to weather the storm and be persistent with product.

Don’t be dismissive of Small cities or Rural India, in the next 3-5 yrs the best start ups would be from here. A Revolution is happening in India similar to the mobile revolution – that is to do with the software as a service. Service being used by wide variety of segments from a big multinational to a small business. It is happening at a price point that will fit each and every need that is out there. India’s future is dependent on its small scale sector transforming itself and becoming competitive over time which is  based on three things –  The democratization of productivity which is happening of the mobile phones, democratization of  best practices which is going to happen in the software as a service and the third thing is building trust networks. This Revolution needs to be taken to the next level among ourselves by using the open source method which will help the industry to go forward. Creating communities of entrepreneurs to help solve the problems of fellow entrepreneurs. The Entrepreneur needs to give back to this community during the process of being successful and not only at the time of being successful. Sharad Co–founder iSPIRT seems to say what Mahatma Gandhi said of India at just before Independence —India does not live in its big cities but in the smaller cities and villages

Dave from 500 Startups takes centre stage and describes what they do by making a lot of small investments in tune of about $ 1-5 Million. The aim is not to own more than the 5% of the bigger companies. They know most companies may not see the entire life cycle therefore they do their do diligence well and invest quickly. The First tranch is the huge risk but the future investments are based on what they do with that money. Engaging with Communities of specialists in design, data and distribution which act as Elders or Mentors to these companies  help them grow. Usually the Distribution / Marketing aspect is the main factor which helps companies being successful.

Concepts of Marketing have changed dramatically compared to change in programming in the last 20 years. Therefore it is important to get the Marketing right. Entrepreneurs need to focus more on Marketing than on the programming. It is very important need to know the customer acquisition cost vis-visa-vie customer revenue being generated and the cost of financing the project for how long. Concentrate on the Indian Market, it will be easier to do business in an environment which you know of rather than a new international market of which you don’t know anything of. Things may not be that settled yet, but it will be in the next 3-5 yrs. Imagine if you are able to build now focusing on India and by the time support services improve, payment channels ease say in the next 3-5 years you as an entrepreneur will be able to go in for the kill. The Fruit will be ripe for plucking. Message : Look Inward and build slowly. Wait for the Time its just round the corner.

The Stage was set after two very insigntful speeches about what is yet to come. Kunal Bajaj then lead a B2B Space Panel Discussion with Ambarish Gupta from Knowlarity, Ketan Kapur of Mettl and Paras Chopra from Wingify  1)    How do you find the right person? Panel: The team was brought together through references and own networks. 2)    How do you market to customers? Panel – Start early, Be Focused and be Disciplined. 3)    How have you raised funds and raised capital? Panel – Raising debt in US much easier than in India. In India the process is Angel Money. But is important to know what your burn money is MOM enabling you pitch it right and get it.  Kunal then lead B2C Space Panel  Discussion with Aloke from Ixigo, Kavin Mittal from HIKE Mobile app, Rajat from SocialAppsHQ.

  • How do you find the right people and keep them engaged?
    Panel – The Challenge is to make people understand what a startup is. The Initial hiring was done through references and interactions through likeminded people. 
  • How do you market to customers and build Brands?
    Panel – Give swops on getting referrals to new clients. Understand your market clearly and go micro and specific.
  • How have you raised funds and raised capital?
    Panel – Raising debt and funds in US much easier than in India. In India to raise funds traction in business is very important. 

By the time the Panel finished answering the questions there was a group of over 55-60 people eagerly waiting to interact with them and the Geeks. 

 

Posted on

Building profitable and sustainable software product company

What common principles underlie success of software product companies such as Newgen, Nucleus, Tally, Polaris, Srishti, Mindmill, Quest informatics, Druvaa, Infrasoft, Zoho etc?. Kim and Maubrogne (1997) in their analysis of high growth companies found that these companies focus on bettering themselves, continuously let unprofitable customers go, and shed commodity resources/skills. Collins (2001) in his widely acclaimed book “good to great” identifies, the value of executive leadership, getting the right people, focus on what a company is good at and creating a culture of discipline, as the core principles of great companies. On the product development side, Reis (2011), Brown and Eisenhardt (1998) have brought out the value of building core (Minimum viable product or MVP) to reduce time to market and patching modules against market opportunity.  In this article, Browne & Mohan consultants synthesize their learning of working with software product companies.

Market selection
While many product companies start off as services companies and later productize-their services, successful ones are those that operate in markets with periodic changes in regulatory requirements, witnessing newer investments to scaling and growth of enterprises in the industry and operational friction exists due to proprietary approaches or tools. Long term sustaining software product companies also look at markets where large MNC products exist, product acquisitions are on raise and MNC’s are unable to address non-behemoth companies in that sector.

Strategic Imitation, not Innovation
While it is fashionable for academics to talk about first-to-market, most successful product companies are strategic imitators. They allow the first-mover to discover the key features, educate early customers, but ride on a me-too quickly to capitalize on the market growth. This helps in lower S&M costs and improved ROCE.

Seek ideas fly from all; focus on what not to do.
Successful product companies seek ideas from multiple sources, beta clients, product demo teams, end users, etc. But build the product looking at where the friction is highest, pain is unbearable and intension to pay is highest.

Design a product for reuse and as platform
Design the product for big picture, but strip down to basic version to design first and market test. Later modules must be used for versioning and bundling. Build modular products and products that could be used in cloud or on-premise environment. Focus should be on minimizing customization, and reduce variety at early stage to benefit from low code, feature and support variety.

Invest in multiplicative Ecosystem.
Successful product companies must learn to exploit the product ecosystem. Whether it is the technology OEM you have an ISV relationship with, analyst relationship, or a sales partner, they are good levers to reduce investments in your set-up (people and other paraphernalia). Align your sales resources to maximize the self-interest of partners. Align with OEM account manager to acquire new customers and “sales focused” no product companies in international markets to expand. Partners and resellers help in market coverage, delivery and post-deployment support. Invest in marketing and vendor management resources, processes including training and certification realised better results. Use every platform provided by technology OEM to brand and reach out to market.  Academic institutes and interns are a good platform to explore open innovations. Ideas for new products, GUI modifications, market research, pricing and competitive intelligence and in fact product development can all be areas where qualified resources can be employed to your company’s gain.

 

Keep sales structure lean and mean
Successful product companies need sales teams where the client opening meetings may happen through marketing events or resources on street, closures can only happen if they have sales team that can inform and influence at senior levels of organizations.  Named account strategy will work if the client organizations can be identified a priori, they are far and few and the sales team has the ability to penetrate those accounts at all levels.

Invest in sales operations
Successful product companies invest in sales operations units, often led by a visibility into last mile was high and the sales teams were mean and lean.

Credible and Consultative Pre-sales
To be a successful product company, invest in pre-sales who enjoy problem solving and consulting. Use various platforms to positions them as solution providers, thinkers, etc. Arm them with couple of certifications, it helps to open many a closed minds in many parts of world. 

Profitable license sales
Many companies do not have the mix of license, support and deployment worked out in detail and with sales pressures may accept clients where the license fee has been abnormally discounted. While winning reference customers is a must, not all clients must be treated as referential. 

Right pricing, adopt versioning
Use versioning or hosted vs. on-premise or CPU vs. instance prices appropriate to the product environment. Create sufficient variants to allow customers to do self-selection and a feeling of control.

Limited budget, Impactful Marketing
You do not have to splurge a lot to be noticed. In fact, many a business papers have paucity of good stories to tell on innovation, India based product or E-governance product. Invest in couple of resources to engage actively with media and also create appropriate noise on social media.

Many successful product companies have HR talking about the culture, what is unique and so on. Brand all aspects of the company. See in what way your unique induction program can become a business case study or women employees returning from maternity or other long breaks can immerse into the organization becomes an impactful article.

Hire for attitude, perseverance and initiative
Successful software product companies do not need hire noble prize winners, but committed people who would embrace common ambition of the firm. They come with openness and curiosity to learn, improvise activities within their control and innovate over time.

While academic degrees and honours may matter initially, what matters is positivism and attitude. Choose employees who are keen to dirty their hands, shoulder a bit of other roles and open to unlearn.  Incentivize employees to attempt, appreciate failures and set them for win.

Rein in service cannibalizing product
Service revenues that come with product installations can be very tempting and wean away the focus away from the product if strongly not reined. Many successful companies find themselves in service cannibalization over time and lose their long term sustainability. Limit your services play and consciously promote partners to support roll out and de-risk yourself.

Risk Management
Product companies that grew and sustained momentum measured the risk and impact of their actions, though mostly subjective.  Senior management insisted on developing an approach to estimate risks, their impact, however rudimentary across organizations. Explicit identification and evaluation of risks helped the companies question their assumptions and prepare for back up plans.

De-risk, invest in R&D
Product companies must de-risk from technologies, products, markets and customer segments. Look out for related product usage areas where the product could fit, refurbish the features appropriate to a specific industry and monetize extension of the product knowledge across different customer segments. 

With inputs from Pratibha Sharma

Bibliography Brown, S.L. and Eisenhardt, K.M. Competing on Edge: Strategy as Structured Chaos, HBS Press, Boston, 1998. Collins, J. Good to Great: why some companies make the Leap… and others Don’t, Harper Business Press, New York, 2001. Garud,R. Kumaraswamy, A and R.N. Langlois, Managing in the Modern Age, Blackwell, Oxford, 2003. Hagel, J and Brown, J.S. The only sustainable Edge: why business strategy depends on productive friction and dynamic specialization, HBS Press, Boston, 2005. Johnson, R. and Soenen, L. Indicators of Successful Companies, European Management Journal, 2003, 21(3), 364-369. Kim, W.C and Mauborgne, R. Value innovation: the strategic logic of high growth, Harvard Business Review, 1997, Jan-Feb, 75(1), 1012-112 Kopitov, R and Faingloz, L. Ways of transforming aims into results at Successful companies, Technological and Economic Development of Economy, 2008, 14(3), 312-327. Kotter, J.P, Leading Change, HBS Press, Boston, 2008. Leonard, D. Wellsprings of Knowledge: Building and Sustaining the Sources of Innovation, HBS Press, Boston, 1995. Morgan, M. Levitt, R.E and W. Malek, Executing Strategy: How to break it down and get it done, HBS Press, Boston, 2007. Schnaars, S.P. Managing Imitation Strategies, Free Press, New York, 1994.

Posted on

Software Products can Spur Economic Growth

Over more than two decades, India earned a reputation as the global leader in software outsourcing, but product companies – perceived as the mark of a true technology powerhouse – have been few and far between. While India is still a long way from showcasing a Microsoft or a Google, unobtrusively, technology companies have sprung up across the country to create products and solutions that meet the demands of local businesses. Quite unlike an Infosys or a Wipro, which are the creatures of global demand, product companies are coming up with innovations made in India, by Indians and for Indians. From helping capture fingerprint and iris data for the Aadhaar card to crunching numbers so that chicken live healthier and longer, these companies are using cutting-edge technology to provide tailor-made solutions for Indian needs.

Software product firms are critical as economic growth is directly related adoption of IT by both trading and non-trading firms. Most macroeconomic and industry studies are based on the growth accounting framework, where the contribution of each input to production is assumed to be proportional to the corresponding share in total input costs. Increases in production above the inputs‟ contribution are ascribed to growth in multifactor productivity (MFP), i.e.: technological progress not embodied in production inputs. Since the mid 1990s, the patterns of productivity growth between Europe and the United States have been diverging.

  • 1950-1973: productivity growth in Europe follows a traditional catching up pattern sustained by strong investment and supporting institutions. This process came to an end by the mid 1970s.
  • 1973-1995: productivity growth in both Europe and the United States began to slow down. However, average annual labour productivity growth in the EU-15 was still twice as fast as in the United States and the productivity gap was very narrow by 1995.
  • 1995 onwards: the U.S. productivity growth accelerated while the rate of productivity growth in Europe fell.

The causes of the strong U.S. productivity resurgence have been extensively discussed. A growing body of research points out that the U.S. acceleration in productivity growth reflects underlying technology acceleration. The findings of this research stream, along with considerable anecdotal and microeconomic evidence, suggest that Information and Communication Technologies (ICTs) have played a substantial role. In the United States the MFP (Multi Factor Productivity) uptake in the late 1990s was supported by the industries using ICTs rather than by those producing them.

Europe and Japan showed that investment in IT capital would not automatically lead to productivity gains. To leverage ICT investment successfully, firms must typically make large complementary investments in intangible assets to change their business organisation and workplace practices. Training, consultancy and customization make up for most of intangible investment and local software product firms are better placed in integrating embodied capital with intangible capital.

Zinnov estimates that more than 5,000 large enterprises and over 10 million small and medium businesses in the country are ready to adopt technology. The product companies have a big role to play in pushing the expansion of the $30-billion ( 1.6-lakh-crore) technology market by some 18% this year.

Posted on

Differentiate or Die – learning’s from the NPC -12 session

Coming back to busy corporate life after NPC (NASSCOM Product Conclave – 2012) is like starting the second innings 🙂 I thoroughly enjoyed being a core volunteer managing 140+ speakers, and the speaker lounge itself on the day of the event. Not just that but was also managing, choreographing and moderating the session “Differentiate or Die – there is a brutal market outside” with the speakers being Rajesh Setty and Bob Wright both from silicon valley and are champions in their own way in the field of marketing and has been delivering guest lectures and speeches on this topic for a long time, and many companies across the world are thoroughly benefited by them. It was time at NPC for Indian product startups to be benefitted by them.

As much as I enjoyed being a moderator, creator and actually a spectator of his event, would like to bring the summary and core points to those who could not attend the event.  It was a 90 minute event with Raj going first on the stage and man he will tickle your funny bone but make no mistake, he will drive the point firm and hard and this is what I can summarize form his session:

“Being part of crowd is cheap; being different is premium and just be different even if you are addressing a small segment” was his clear message. His idea was very clearly driven that if you have the will you can differentiate and still stand out in the crowd and best is he took an example of overcrowded and saturated market of cars to drive his point. He showed that even today and even in that “overcrowded-saturated-done & dusted” market people are finding ways to differentiate and thrive and survive and more important with profits. Take this: buy a car and there are 100s of brands and each one has a different story to tell – one is on safety, one is on family, one is on fast, one is luxury – all done and now you want to enter and how will you do? The common attribute among all is “owning the car”. Let’s change that to “renting the car” and then came a bunch of companies who do it, better, faster, quicker service, cheaper etc. and started another industry around this saturated car industry. Now what – further saturated and cannot go further – say most people but comes smart entrepreneurs who say the common attribute for all is “renting from airport” and lets change it to “renting from home or anywhere” and a new rental company comes up and again created a niche for itself!! Ok that’s it and you cannot do anything further on this market – come-on there should be a limit on a saturated market. So we all l thought but someone came out with a nice idea about renting cars in the locality of those which are sitting idle and why not rent it in the community and there starts another industry which says “why rent from a company” attribute – amazing isn’t it. If that is not enough another company comes and says “rent and drive” when you can “rent with a driver” and if that is not enough, there comes another company which says ride along so that we can zip faster on the “car-pool” lane. Isn’t it amazing on how an over saturated legacy industry can be even now differentiated!! And we complain how crowded the technology market is and we cannot differentiate at all – I think this should be an inspiring as well as an awakening story for all of us who complain about saturation in the technology market!!!

Raj concluded with his Mantras which I feel are very critical and we should follow religiously which I list below:

(Really) Decide to be different

Don’t forget to create meaning – empathize with the people and their problems

Most important, tell a good story

More important than that, live up to the story (otherwise 1,2 & 3 has no meaning and will hit you on the face)

And he ended up with a famous Buddhist Quote

“When deciding among opportunities choose the most difficult path” – So true!!

What an amazing presentation it was!!

Then Bob followed with his presentation and was another amazing one straight to the point.  He is an expert in positioning which is nothing but differentiation and how you drive that differentiation into the minds of the prospect so that it is “positioned” well in that whatever mm by whatever mm size the brain is. Actually my theory is just create the best product and it will sell automatically with no gtm, positioning, marketing, branding, advertising, etc. etc. as long as  they are selected by a set of machines and not humans but as long as humans make the choice, make sure you do all these right!!!! 🙂

He quoted Al Ries “Positioning in the mind of the prospect. It’s how you differentiate your solution in their mind. It cuts through the clutter. It focuses on the perceptions of the prospect”. According to Bob you should position customer centric and around his problem and what you are trying to solve and not product centric.  The 7 gems he stated which I repeat here are:

Fortune 500 or SMB is not a market

Who is your “Mary”? (Manju: Find that right person to who you like to sell and write down his characteristics – not all are same and you need to know the position and characteristics of the person you likely to sell)

Own a problem (Manju: try stating the problem you own in less than 140 characters – give it a shot – if you can’t I say you are suffering from Laser Focus 🙂 )

Have a point of view

Take a corner of the room (Manju: assume room is the market you are jumping into and don’t try to be everywhere in the room)

Communicate with Stories (this story should answer why your company, how are you different and how will be life be better with your product)

No geek-speak  (Manju: please don’t do this like talking on how many layers in TCP/IP and how you get through that network stack and how that packet flows and how IPSEC works and why the IPS and the IDS works the way it works etc etc – please address what problem you are solving for him)

He ended his wonderful speech with a proposed 10-slide solution, which are

  • Slide 1: Big results from customers like you
  • Slide 2: recent market dynamics: your world has changed
  • Slide 3: Causing a big problem
  • Slide4: …And you may lose your job
  • Slide 5: Traditional approaches no longer work
  • Slide 6: what you need to fix the problem
  • Slide 7:The Answer: Our Company
  • Slide 8: 3-4 reasons why customers like to choose us
  • Slide 9: Cleaned up problem: How your life will be different
  • Slide 10: Call to Action

I am just curious, how many slides talk about your technology? Almost None. Now have a look into your deck and see how different it is from the above. Call to action????

Next, I will come out exclusively for “ProductNation” on not just differentiation but how to find one 🙂 🙂 Watch out this space!!!!

Posted on

How far should you go with Professional Services in your product business?

For any products company, product support is a given, and part of the products business fabric. However, almost all Enterprise Products Companies end-up offering the professional services beyond basic product support. These services could range from simplistic implementation support, to integration, to solutions-building, to architectural consulting, to IT advisory support. The decision to perform professional services could be driven by customer-demand, or by the intrinsic need of the product being sold, or even driven by the business strategy itself to generate peripheral revenue.

It’s important to understand where the boundaries lie, and what goal does a certain type of professional services serve. The decision to commit to a particular type of professional services needs to be driven by a conscious thought process. This is important because the time & resources required to build various skills & operating models for serving the various flavors, change dramatically from one to the other.

Professional Services in Products Business

1. Product Support

This is the core to the products model and serves as just that – support to the main products revenue, and to ensure customer satisfaction. While the core strategy for any product should be to make it so good that it requires minimal support, there’s always a need for support – offline and real-time for the customers.

2. Implementation Services

An ideal product is ready-to-use off-the-shelf, however, in case of Enterprise products the need to configure & customize could wary. Most times, customers demand for an implementation service packaged in the license deal initially, in order to ensure success. Most times, products businesses have to employ this mechanism also to close sales cycle and to ensure a consistent source of post-sale revenue from such services, and also indirectly to ensure expansion of the product usage through consistent personnel presence on the customer premises.

3. Integration Services

This is where it starts going slightly further away from the core skills that the organization may possess organically. Integration with the existing IT systems and other products at the customer premises would require the skills & management practices beyond the core areas of the organization. An extra source of revenue is one of the temptations, but there are also scenarios where integration of the product is critical to the success of the product, making such services mandatory. This is especially true if the product interfaces are not built with open-standards, and require the integrators to know the details of how the product is built internally. The correct approach would be to build the product interfaces in a way that doesn’t force the business into such compromise to induct professional services for integration. There’s an indirect impact of diversion of core product resources to such integration projects unless such professional services are pursued by design, and resources built accordingly.

4. Solutions & Consulting Services

This is where the game gets strategic, and resources expensive. And the reasons to do this are not any more intrinsically important, but strategically targeted to higher value to the customers and hence, access to the larger pie of the wallet. However, this is easier said than done. Unless there’s enough scale & case in the existing business to allow the focus on such services, strategic, and by design, a business is better off focusing on building the core products business stronger by investing resources there. This makes sense for the products, which are more like Platforms that provide larger leverage than in a Point-solution product.

5. Advisory Services

This is important for the products that are targeted for larger ticket sizes and are built for Enterprise-wide deployments. The IT strategy alignment as well as the strategic positioning of the product becomes important, and it also requires much larger IT leadership level involvement. For Enterprise Platforms, or even for departmental level strategic investments, this approach to professional services can bear fruits. However, building it into a business line requires the core product business to be strong, ready for the leap.

So what?

While the Businesses can look at starting off with the lower scale of Professional Services and build up over time, the decision is very strategic and long term. Professional Services, while offering additional top-line, could actually be a resource-intensice and money-draining proposition if not built properly. The mindset that governs the professional services line of business is drastically different from the product side of business. The operational efficiency is paramount, & profitability can very quickly take a hit. Even more importantly, professional services are more intensely people-driven and the skill sets required to build and sustain this business over long term are not trivial. Look, think, and think hard, before you leap.

PS: There are other considerations on Professional Services that directly or indirectly impact the core product business. I will cover in those in the next post. Until then, hope this helps! 🙂

Posted on

Destination Vs. Distribution: Why your Product should be where your users are!

User acquisition is a prerequisite to startup success. Startups often see user acquisition as an act of sourcing traffic to a destination and converting traffic to users.

Almost every web business has a destination: a website, an app etc. The destination is often seen as the product in its entirety. Talk to a startup about their product and they will often think of it as a website or an app that the user goes to.

However, the destination is just one manifestation of the product.

DESTINATION VS. DISTRIBUTION

An internet service can be delivered to users in two broad ways. It’s often important to think through both the routes to figure out how your user will best interact with your service. The two modes are characterized as follows:

Destination: How do the users get to where the product is?

Distribution: How does the product get to where the users are?

Any service can be delivered as a combination of these two.

DESTINATIONS

What are they? 

Destinations are the online address of the product that users remember and visit.

Manifestations?

Most common forms of destinations are websites, mobile apps and downloaded software (that syncs with the cloud).

Important because…

This is the go-to place for users to interact with the product. Whenever you think of Facebook, you have a site or an app to go to to use the product.

But…

  • Destinations are not always available in the context of the users. For example, Flickr is a great photo hosting service but it wasn’t available at the point of photo capture for a long time. A user had to click a picture and then undertake another series of actions to upload the picture on to Flickr.com. In contrast, Instagram’s service could be accessed right at the time of photo capture.
  • Destinations, by definition, require users to come to where the product is and this brings with it the challenge of user acquisition.

DISTRIBUTION

What are they? 

Distribution delivers product functionalities in the context of the user making it easy for the user to interact with the product.

Manifestations?

Most common forms of distribution include widgets (Yelp), code embeds (Quora, YouTube), API provisioning , browser extensions as well as apps (especially apps that deliver you a feed from a product, for consumption).

Important because…

  • The product is available where the users are. Hence, it helps direct traffic back to the destination. Yelp used widgets very effectively to gain users by allowing users to showcase widgets on their blog. YouTube gained traction by allowing users to embed videos on their MySpace profile and directing traffic back to the destination. Flickr, similarly, gained traction by allowing users to embed pictures in their blog posts.
  • The product is available in the context of the user. This is especially true in the case of ‘curation as creation’ tools like ScoopIt. ScoopIt allows anyone to create a magazine by combining a set of links. The creator can either create the magazine by visiting the ScoopIt destination and manually adding all the links to the magazine or she can install a browser extension that plucks the web page she is visiting and adds it to the magazine. In the second case, the user never needs to leave her context to use the product. Evernote uses a similar extension. Social sharing buttons work on a similar dynamic and allow the user to share content without having to visit the actual social media destination.
  • Distribution helps engage the user and encourage repeat visits. Email updates have been used since the early days of the web to bring back users to the destination. In recent times, this tactic worked especially well for Groupon.

But…

More often than not, distribution is limited to certain functionalities. A news feed delivered to the user or a browser extension to capture a web page exhibit only a slice of the functionality that the product offers. However, that is the exact slice of functionality that is needed in the context of the user.

THE OVERLAP

Ultimately, destination and distribution are determined not by their physical manifestations (although that helps understand the difference) but by the use case.

Destination requires the user to move into the context of the product. Distribution enables the user to use the product in his active context.

While the two are different, there is an overlap between the two as well. For example, the Instagram app acts as a destination in consumption mode where a user can view photos and participate in discussions but it also fits into the context of the user (using the phone as a camera) in production mode. An offline downloaded software (e.g. Dropbox, Evernote)  that syncs with the cloud serves as a destination (user specifically opens a software and uses the product within that context) as well as distribution (the native context of the product is geared towards online usage but the offline piece fits into the user context who might not have access to the internet at that point.

As shown by these examples, the manifestations overlap but the use cases are different. Hence, it is important to think through possible use cases and identify usage contexts where a destination makes more sense than distribution or vice versa.

In summary, when planning an internet product, it is important to consider the mix of Distribution and Destination that it requires:

  1. List out the use cases. How will the user use it in production mode? How will she use it in consumption mode? It helps to separate the production and consumption modes because user contexts are very different in the two modes.
  2. Are any of the use cases best satisfied in the existing context of the user?
  3. For every action, are you making the user do extra work by coming to a destination?
  4. Can Distribution direct traffic to Destination?

Often, distribution can be the difference between a product that is convenient and engaging and a product that is difficult to use.

How have you split your product across distribution and destination? If you haven’t do you feel some distribution touch points could help improve product usage?

The post first appeared on platformed.info
Posted on

NASSCOM Product Conclave 2012 Reflects the Arrival of a Vibrant Product Ecosystem in India

The kind of conversations that you heard around product companies are changing. From an ambitious “billion dollar companies” born out of India (the overarching goal of NASSCOM Product Conclave last year), the focus is shifting to the bold prediction of product software’s robust growth, in the coming decade and half, eliminating poverty. In his opening remarks, Sharad Sharma, NASSCOM Product Chair (who I hear across the board is an inspiration to the whole community of product guys) called product entrepreneurs by labels as aggressive as “arms merchants” and “disruptors.” He went on to make a bold prediction: “product industry will lift India out of poverty.” He sought to portray Cloud as instrumental in product space becoming an affordable, productive, and collaborative space that would transform public health centres and schools in India.

Reflecting the evolution of NPC, Som Mittal, President of NASSCOM, said that NPC is a great platform to compete and collaborate. He also revealed that NASSCOM is entering into an MoU with SIDBI to provide risk capital to small companies, which would include IP-led product companies. (SIDBI was provided a fund of Rs. 500 crores in the Union budget for investing in SMBs.) He saw angels, investors, and incubators becoming active in the product ecosystem. Mr. Mittal’s statement that CIOs were open to buying from startups should give product entrepreneurs a sweet ring in the ear.
M.R. Rangasami, co-host of NPC 2012, saw three phases of evolution of the product industry in India: mimicking US to get funding initially, growth of enterprise software in the next decade, followed mobile and Cloud computing causing a paradigm shift in this decade. He was optimistic that software products offered at low price points offered by product entrepreneurs (leveraging the Cloud) will be consumed by thousands of customers.
Naveen Tiwari’s Leap of Faith

In a sort of answer to the overarching question of a billion dollar business emerging from India (the same time around last year when Flipkart was rumoured to have obtained a billion dollar valuation), InMobi, a mobile advertising ecosystem player, has emerged as perhaps the biggest company to grow out of India in the last 5 years. Naveen Tiwari’s keynote should be remembered for something alien to product entrepreneurs in India: talking numbers that are in the million and billion range—a trillion ads providing $2 billion worth of economic transactions, reaching 80 million people across 165 countries. The mercurial growth of InMobi has been made possible by the “Think Big” approach of the team and not being complacent with the present status. The company is devising methods to grow five to ten times in the 5 years from now. Naveen Tiwari said that massive scale happens with huge risks and the InMobi team was willing to bet on it. Aiming big, going global, and hiring the best are the three mantras Naveen Tiwari proposed to build a similar company in India.

Ram Shriram’s Bet on Mobile and Tim Parsey’s REM
The man with the Midas touch could not touch down at Bangalore as personal commitment stayed him put in the United States. Ram Shriram of Sherpalo Ventures who delivered the keynote on video sought to paint a glorious future for mobile phone-based innovations going by the sheer number of them. (An exclusive coverage will be done on his address.)

As M. Rangsami announced the TED-like speech of Tim Parsey of Yahoo!, who has changed seven domains and as many companies, it brought a fresh whiff of outside air. Instead of thinking inside, this change of thinking by organizers to bring in someone with a different perspective seemed to have carried well. Tim Parsey gave an absorbing, exuberant keynote on design being important for products. Using the bicycle as an example of his REM framework, he translated the evolution of bicycle to products within the REM framework. Rational value, Emotional, and Meaningful are important components of the design, in Tim Parsey’s philosophy. A rational value in terms of performance and new capabilities, designing for feeling, classic minimalist, and ultraminimalist (appealing emotionally) styles, and being meaningful (aligning to values and evoking personal memories) make a product appealing to the customer. The design principles and design culture should be enticing for the employees as well as end customers for whom the product is aimed at, he emphasized.

So many of them, which one to go?—Indian SMB market too small
End of keynotes opened up to six parallel sessions and thankfully one was cancelled. The sheer excitement of peeping into several sessions would have satiated the delegate but wouldn’t have had a carry on their learning. Color codes in the Agenda clearly showed the prospective audience base for the sessions. If I would have made a point of covering them all, I would have left the readers disappointed with piecemeal quotes that wouldn’t serve purpose. I stayed on with one session per slot. In a curiosity to understand the Indian market, I walked in with a lot of hope of three wise men telling us how Indian market so big as an ocean could be tamed with a magic wand. In the end, despite “doom and gloom” sought to be avoided, Indian market despite millions of potential customers turns to be less attractive for a product entrepreneur if segments are suitably sliced. Pari Natarajan of Zinnov showed the microcluster of leather SMEs finally boiling down to 2000 users. Terming product business in India for SMBs non-VC fundable (implying lack of scale), Pari however said e-commerce is a robust segment. Naru Narayanan, investor, mentor, and former executive selling retail products across India, cautioned the lure of big numbers. He sought to convey that any big number showcased should be treated with caution and provided his guestimate method of arriving at a rational figure. Vijay Anand put the conversation in perspective by bringing down the glorious 900 million mobile users to an active 300 million (multiple SIMs being the discounting factor). Despite the promise of the billion plus, Indian market is yet to become technophilic. Technology touches a niche and not yet mainstream.

This led me to a conversation with Kishore Mandyam of PK4 Software, who led a panel on AWSME Survey, the Nielsen survey commissioned by NASSCOM to look into the SMB market in India. This is an awareness survey by NASSCOM to understand what ails the SMBs in terms of buying software. In over a 1000 SMBs surveyed, it was known that only 30% of SMB owners were approached by a software provider and for example in Kochi, 86% of SMBs were not approached. Out of them, only 9% know the term Cloud computing. To make SMBs adopt technology massively, NASSCOM mandated this survey to drive its Software Laga Do Yaar! Mission. The survey will be used to further enhance the market penetration of software by understanding pain points, influencers, and decision makers by a follow-up engagement perhaps by using case studies to influence buying decisions.

Pivoting is painful is what I got to understand in the panel discussion on pivoting. Naveen Tiwari, Ashish Kashyap of Ibibo, Rajat Agarwalla of RJ Softwares were engaged in a panel led by Shruthi Chella of Groupon. Instituting pivot as part of culture is next to impossible. Pivoting in a small company is easier whereas in a big company, it is first tested within a small group before massive adoption. Customer needs, market opportunities, and competitive advantage drive pivoting. Ashish called pivoting as “changing punctured tyre of a car in motion.”

As the afternoon set in and more sessions awaited, the delegates swarmed the lunch area exchanging contact details and engaged in conversations.

Contributed by K. Venkatesh, VirtualPaper for YourStory.in

Posted on

Entering the Product Space – Shoaib Ahmed, Tally Solutions(Part 2 of 3)

You can read the Part 1 of the 3 series interview here.

Shoaib Ahmed, President of Tally Solutions, began his career as a retail
software developer in the early 90s. Formerly the Founder-Director of Vedha
Automations Pvt.Ltd, Mr. Ahmed was responsible for developing Shoper, a
market-leading retail business solution — and the first of its kind in India to
bring in barcoding to the retail space. The company was acquired by Tally
Solutions in 2005, where Shoper merged with the Tally platform to offer a
complete enterprise retail software suite. In the second of a three-part series,
Mr. Ahmed talks about product development in the B2B space and reaching out
to customers.

Why do you think we are seeing businesses that start off as a product
company become service entities?

This is where I see the need for educating customers: why should you buy our product,
what can you expect from our product and what shouldn’t you expect from our product?
More importantly, will the product solve your key issue and will it do it well? Unfortunately,
who is educating the customer about these aspects? It may be a service provider who is
interested in the service revenue only. So there’s a disconnect — there’s nobody who is
evangelizing the product and being a product champion in the small and medium business
space.

What do you feel about having ‘pilot’ customers who can obtain the
product with an attractive offer like a reduced price?

I don’t think this is the right way of doing things. When you’re reaching out to customers,
it’s important to solve some of their key issues. To do this, you need information about a
particular profile of customers so very clear about who your customer is and what your
customer looks like to you. Now, if you want to get a large enough slice of the market
make sure you have experience with a complete set of customers — you cannot pilot
a semi-experience. You need to be able to engage with him and get your value from
him over the proposition you are making. This means measuring not only the product’s
effectiveness, but also measuring the quality of the sales pitch and that the service
capability and the service quality promise is being fulfilled.

You may decide in the first six months to choose a smaller customer set to target but
you’ll be measuring to see if all elements of your complete product experience are being
monitored for effectiveness or reviewed. This gives you an idea of scalability, since you
can then adopt an attractive pricing strategy with confidence. It can be an incremental
process, but unlike a pilot, you’re not only reaching out to a few customers and shaping
your product around them. With a pilot, the danger could be that the pilot customers are
early adopters who will view evangelizing you product amongst their peers as letting go of
a competitive advantage.

Do you think it’s a myth that it’s easier to develop B2C products rather
than B2B?

I think the success of Tally disproves this. Out of a potential 80 lakh businesses, nearly
40-45 lakh own computers. A large group use Tally for their business — nearly 90%
of the market. So, the constant need for us to deliver a value is critical and it’s also
important to keep communicating this value. If I as a business owner don’t see a value
in paying you for a product or service then I don’t, but increasingly in the connected
world a businessman understands that he can grow his business manifold by leveraging
technology. The information system now has to support him because he is in a connected
world so the game is changing.

In the B2C area, let’s look at the average individual : he has a higher disposal income and
is more exposed to technology. A lot of his day-to-day activities are done using technology
(like banking and filing returns). When he’s engaging with the rest of the world, he’s going
to expect a similar experience. This may act as a driving force for businesses to match
that : for example, can an individual get his doctor’s appointment online? If there is no
supporting eco-system for the the tool that the customer has, then even the greatest
online tool available to this customer can’t drive enough value. In my mind its critical that
business-to-business product development is on the system and the efficiencies have a
direct economic impact. For example, the average time for payment reconciliation in the
small business space is an average eight days. From a digital perspective, it should be
instantaneous. Just imagine the impact and velocity of commerce!

Interview Cont’d

Posted on

The frustration of “lack of progress” with your product

On the outside looking in, its extremely frustrating to hear of product teams shipping product multiple times a day.

I tend to often question: “What in devil’s name am I doing wrong”?

  • Is it that I have not defined the product requirements right?
  • Have we hired the wrong people? Does our team not have enough experience?
  • Is our culture not supportive of mistakes?
  • Are we not focusing on the right things?
  • Do we not have the capability to get stuff done quickly?

Experience with multiple startups has taught me that its ignorant to compare your company with others (who might have stated at the same time) who have more “visible progress” than yours does.

But I hate that experience.

Its hard not to compare and question why is someone else doing so well with a smaller team than you have.

Experience has also taught me that startups for most parts (like kids) have a step function in progress. Its rarely a smooth “up and to the right”.

I hate that experience as well.

Should all that experience not make the next go around a lot smoother?

So the question – “What the value of all that experience”?

There’s only one answer – Its overvalued.

There’s one solution to most of these questions and although it is a cliche and often repeated, the answer is “Hire right” – whether its consultants or contractors or full-time employees, you need to constantly evaluate and hire the right people.

So, how do you hire right? And how do you define “right”?

So lets start with not the job description, but with your culture and values. Hire the right person that fits your culture and can align with your values.

If you culture is defined by moving fast, hire and attract people that can do that.

How do you determine if someone “fits” your culture if all you can do is interview them for 1 hour or so?

Write down questions to situations where you feel your culture will make them act one way versus the other. Ask those questions during the interview.

Depending on the answer to those questions you can determine if they can align.

What I have learned is people rarely change. So its hopeless to expect someone who is not a good cultural fit, to come in and get “religion”.

Original Post can be accessed at BestEngagingCommunities.com

Posted on

What makes a product “fit” a market? Or how to achieve product-market fit?

A relatively young term in an entrepreneur’s vocabulary is “product-market fit” (PMF). Attributed to Marc Andreessen in 2009, this term, has a relatively simple meaning but one that’s hard to really get a sense of:

Product/market fit means being in a good market with a product that can satisfy that market.

If you go after an awesome market – growing fast, has excellent demand and a great growth curve, then you’ve got 90% product-market fit, even though technically 50% of the challenge in any startup is coming up with a good product.

Lets assume you are going after a great market.

How do you know its a great market? Besides the fact that its large (obvious) the speed of adoptionis tremendous.

What then makes a product “fit” a market?

First there are 3 important assumptions I make:

1. The best team does not necessarily create the best product.

2. The best product does not necessarily win in the market.

3. It is rare for startups or entrepreneurs to create markets.

A product “fits” a market when

1. Your metrics for adoption of your product exceed adoption of all your “competitors” combined (Instagram had more downloads in 1 week than other competitors did in 6 months)

2. There are so many missing features in your product but its still being sought after (HotorNot had no other features except an upvote and downvote)

3. The problem you solve for the user is such a big one that they are willing to forgive the lack of “nice to have” capabilities (during its early days, Twitter kept crashing daily)

The first point (metric) answers the question – What should I measure to know when I have achieved PMF?

The second point (features) answers – How can I tell?

The third point is the most important. To know about problems that are painful and large there’s one thing you need to learn, i.e. Learn how to ask the right questions!

Relevant links that I would highly recommend you read:

1. Jeff Bussgang on why early in the product cycle entrepreneurs should be hunch and not data driven.

2. Andrew Chen on “When” has a product-market fit been achieved?

3. Ash Maurya on the 3 stages of a startup and why problem-solution fit comes before product-market fit

4. Patrick’s perspectives on steps to product-market fit.

Cross Post – BestEngagingCommunities.com Contributed by Mukund Mohan. 

Posted on

Indian Software Startups Similar to Excitement of Late-90s Silicon Valley

Editor’s note: Sharad Sharma and M.R. Rangaswami are co-hosts of the NASSCOM Product Conclave 2011 (November 8-10, 2011), a must-attend event for software product startups. Now in its eighth year, more than 1,200 delegates from 600+ companies are expected to attend. Sharma and Rangaswami share with SandHill readers their insights on what’s happening in this dynamic market – and why U.S. buyers and software execs should keep the Indian startups on their radar screen.

One of the keynote speakers at the NASSCOM Product Conclave a couple of years back was Guy Kawasaki. In his recently published his book, “Enchantment,” he wrote that our Conclave was one of the most interesting that he had attended in the last few years because of the energy at the conference. And the energy this year is already really high. That’s because, in some respects, the Indian software products industry today is where Silicon Valley was in the 1997-98 time frame.

The Valley then was in a different era of entrepreneurship. There was enormous excitement about where the future of the world was headed and the role that the Valley could play in that. India is somewhat like that in the context of what’s happening now and the role that its software products industry can play in the economic future of India and the rest of the world. It’s a very exciting time.

Original Post at Sandhill.com