The push for products

By investing in the product marketplace, India will do the same leapfrog as it did with the mobile revolution. 

Recently I had the opportunity to witness the silent revolution that is taking off in India – a revolution that has been overshadowed (and somewhat suppressed) by the media-popular IT giants!

For a long time I have wondered why the IT giants with so much intellectual capital and knowledge had not invested in building products.  Most of these giants had smart folks who worked on endemic problems and were focused on solving them through service contracts. My queries to senior executives in IT giants were always met with one of the following answers:

    • not part of their niche,
    • not easily understood by analysts who closely watched their quarters,
    • they did not want their customers to feel that they were capitalizing on  knowledge gained through services to address the problems differently, and
    • did not have the rich domain experience.

 

My personal perception was that the reality was different.  They could guarantee (not just generate) a positive ROI with an incoming professional in six months. Investment in products required long term thought process and needed a completely different kind of entrepreneurial thinking.  More importantly it needed leadership that had an entrepreneurial mindset based on conviction and risk-taking.

In November of 2012 I had the opportunity to attend the Product Conclave of NASSCOM in Bangalore and it opened my eyes to a different India!  I got to see a level of passion that I had never seen before. I got to see the edge folks – folks who had worked in the domain in large companies and realized the drudgery of some of the maintenance work that they were doing.  While the vast majority were comfortable carrying on there were some folks in there who had the mind-set of “change-agents”.  They were not satisfied with simply doing the work – they wanted to get to the root issue and solve/eliminate the need for the problem.  They conceived thoughts and ideas on how they could solve the domain issue in a better way.  They aspired to replace the increasing labor costs with much better ways of doing things.  They were ready to eliminate their jobs completely but that did not fit the revenue model of large IT service companies.

These folks then did the next thing that “change-agents” do – shock everyone around them by giving up titles, safe corporate jobs and took the plunge.  They started working towards creating products that would satisfy a market need.

As per latest statistics, the total revenue of the product companies from India is currently over U.S.$2.0 Billion, from approximately 3,400 companies in the software and electronics/semiconductor industry.  When I dug into the demographics, the number of companies shocked me first, I had no idea about the same.  The revenue seemed fairly small as it works out to an average of $600K per company.   Also there seemed to be a concentration issue with 51% of the companies located in the NCR and Bangalore region.

In my personal opinion, by investing in the product marketplace, India will do the same leapfrog as it did with the mobile revolution.  It will truly democratize the software industry very quickly and let people shape their own destiny versus becoming part of the eco-system where you have to spend years to display shoulder badges of experience.  The biggest barrier is currently created by large behemoths to protect their territory.  They have service portfolios to do work, using labor at hourly charge out rates versus the paradigm shift of product folks that will either eliminate or dramatically reduce the need for the same.   Product evangelists are creating a different world that is moving away from “status quo” and coming up with new and different ways of doing things.  They are the “game-changers”.

Since the Product Conclave in November, I have seen the establishment of iSPIRT, a trade organization that is supported and focused on product portfolio companies.   It allows the product companies to build the eco-system that is required to support and enrich their environment with necessary supporting infrastructure.   Along with my colleague Greg Toebbe, I have also attended a session in February, 2013 on product start-ups wherein we were introduced to some innovative and creative technologies that had relevance to our requirements.

In this fast-paced, globally networked business environment, businesses are continuing to seek disruptive technologies that give them the competitive edge.  They are not just looking for smarter and more effective ways to do existing work but different and innovative business models that support their continued evolution in the marketplace.  They are not just looking to sell products but to engage customers in the experience – they are not looking for a sale, but a well understood and strong relationship with the customer.   Entrepreneurs need to ensure that their solutions are not constrained by the paradigm of “always have done it this way” but are “tectonic shifts” to the way of doing business.  They need to address not silo issues, but address them from a customer centric model.  They do not need to focus on big-data, mobility, social, etc., as buzz-words, but to provide solutions that provide the customer an engaging experience.   They should not get enamored by technology trends and their personal technology biases, but focus on the experience and convenience being desired by the millennial workforce participant.  By 2020, half the global workforce will be millennial and the new business models are not expected to come from the current large companies.

In the new world, businesses realize that the days of buying everything from the perceived “safe” companies is no longer the decision that will sustain them – they will buy best-of-breed from the smarter solution companies that treat the world as flat.  The power will not be in individual solutions, but the network of best-of-breed solutions.   Large companies with multi-year implementation timelines and businesses that seek to automate existing processes will not be the winners of the new world.  Solutions will have to nimble with the cycle from pilot to deployment being short followed by continued innovation.   Sales cycle will have to be supportive of the same and a long-term annuity of fixed maintenance will not be the driver; ease of use, usage metrics, continued innovation and overall satisfaction will be the new factors that will play into maintenance annuity.

So for all the product folks – my hats off to you!  My only advice would be to not be discouraged by the challenges that come along the way.  Do not care when people say “I told you so”, do not worry if you do not have all the skills to make it happen, do not worry if it takes a little longer that what you thought.  You are the “change-agent” for the revolution that needs to take place and if India has 50 percent of the world’s IT workforce, then it is time that they produce world class products!

120+ companies in 120 days – Come join the movement to revolutionize India’s Software Product Landscape

iSPIRT’s roundtables create a buzz in the Indian software product community. Shehjar Tikoo doesn’t like conferences and seminars. The entrepreneur of e-commerce enabler Unbxd finds them boring and one sided. But all that changed when he attended the iSPIRT roundtable on Product Management in Bangalore. Says Shehjar, “I liked the fact that the audience was very carefully chosen as were the facilitators. The discussion was very healthy and I came away with some great learning. In fact, I still refer to my notes and each time it has something new to say to me.”

iSPIRT is known for bucking the trend. At the heart of the iSPIRT movement is the spirit of democracy. So just like decisions are made collectively and jointly, roundtables are whiteboarded and collaborative. It’s a joint learning exercise for both facilitators (note they are not speakers) and participants (not delegates).

Says Aneesh Reddy, Capillary Technologies, “It took couple of calls to talk about the challenges of product companies and the team defined three problem areas  – Product Management, Sales & Positioning & Messaging. The format was very clear in the minds of everyone – peer learning where founders come and do a deep dive, the objective was to create a cancer survivor network model for product start-ups.”

The first playbook Roundtable went on for around 260 minutes and attendees spent another 30 minutes outside the office networking.

“Round tables are a great way for teams, entrepreneurs to cross learn about the best things that worked in their scenarios and some of it can be implemented and experimented by other startups too, cross learning from startups is essential for this ecosystem to build and am glad iSPIRT round tables do exactly that.”, said Vijay Sharma of Exotel.

Since the first program on April 4, iSPIRT  has covered more than 120+ product companies (up to August 3). While the impact of the programs is slowly percolating the software product initiatives of different companies, what has proven an instantaneous hit is the format of community learning – for founders, by founders – little wonder it’s called a [Playbook] roundtable!

India as a Product Nation is in good hands – Insights from the Lean Sales Roundtable

The fate of the future of India as a product nation is in the hands of 20 somethings and 30 somethings.  Whether it is sheer luck or sheer brilliance or sheet hard work, or all three I don’t know, but what I do know is that the future of India as a product nation is in good hands.

I attended a Lean Sales Playbook for about 3 and a half hours.  I had no idea how the time flew as  Pallav Nadhani (fusioncharts.com), Varun Shoor (kayako.com), Paras Chopra (wingify.com) shared from their companies’ experiences.  The attendees got a great insight from these three founders on how to make sales and marketing efforts pay.  Every talk was littered with “what works and gets customers in the door” versus just some sales and marketing theory.

The team intensely discussed generating MQL, SQLs, role of marketing, role of sales, organization setup, hiring, compensation, etc..

The insights below are from Pallav, Varun and Paras – however, for purposes of confidentiality it does not state which company has done what specifically.  The below insights could have worked at one or multiple of these start up organization:

Leadership

  • The founder is the first sales person
  • “Founders must obsess about things that they want their teams to obsess about”.  One of the founders believes in Content Marketing and has written 180 articles himself.  Another founder is a strong believer in leading sales, and the third in building quality software himself.

Getting your first few customers

  • “Marketing is about finding channels that give volumes / returns relative to cost of the channel.”
  • What worked for initial sales was to work on “influencers”.  Identifying experts on various in-depth forums and working on them as initial customers.
  • Product is not different from “sales”.  The problem of sales comes only when the products’ value is not known – when the team doesn’t even know if the product should exist or not on this planet.  Do customers really require it?

 

Managing the Sales Funnel

  • The start-ups give a lot of focus to containing “churn”.
  • Converting site hits is monitored in a very rigorous manner by all founders.
  • Once the free trial starts, the impression formed in the first 2 minutes is critical.  Customers should not get a whole lot of options.  Its  a minimal set of 1 or 2 options so that making decisions on how to proceed is a no-brainer.
  • Its difficult for the customer to give large commitment at once – so try to get their commitment in small steps … and then get them truly engaged with the product.
  • Sales and trial requests are managed rigorously.  There are both automated and manual communications that go to potential customers.

Marketing

  • The marketing team has used among other initiatives –   SEO, Content Marketing and word of mouth.  Content Marketing has been used very effectively.  The articles have to be well written and the product has to be pitched subtly so that its value is understood and appreciated.
  • For SaaS software, the sales person is more of a “sales enabler” rather than an outright “sales” person.  Marketing and the Product do most of the work.  “Sales enablers” need to describe product features and not really sell.
  • One of the organization’s target market is the CMO organization, even though the person reached most times is an executive or a manager in that organization.  A lot of importance is given to reaching the users who will actually use the products – and not just the IT organization.
  • Drip marketing is also used effectively.  Information of a customer is collected in many ways.  E.g., you don’t ask the customer which industry they are from, but collect information on which demos they want to see and try to figure out the industry.
  • Offline conferences are more expensive.  One of these startups went for it only in their 7th year.

Building a Brand

  • Building trust and credibility with customers is crucial.  Its critical to have a website that speaks in the language of target customers (in the US and in UK).  Websites targeted at Indian customers and those targeted at US customers can be very different.  A lot of time is spent in identifying these differences and ensuring the website is culturally accurate.
  • All success stories are tracked and converted to case studies.  Potential customers are able to view success stories that are relevant to them and are from their industry.
  • Ensuring top class support, ensures that the brand continues to grow and strengthen.
  • Execution Excellence builds a brand.  Even though these are start ups, what really works for them is creation of internal Knowledge Banks.  EVERY mistake or gap a customer reports goes back into the Knowledge Bank and everyone gets trained.

Talent and Hiring

  • Ensure you are hiring good people, especially in Sales and Marketing.  When hiring at senior levels, e.g., a VP of Sales its important to know if he is working out or not right at the word start.  Taking 6 months to a year to figure out that he is “not working out” is a huge loss to a start up.
  • Get creative about hiring the talent needed.  One of these startups have used expats that have returned to India from various countries and do not want to leave their home state.    So, the recruitment team ensures that they hire Australian expats to support the Australia customers and UK expats to support the UK customers, etc.

It was enthralling to see the energy and wisdom in this young team.

Even as I left, a list of topics went up on the board.  Sales compensation was the top one and there were a few others.  Am sure the active discussion lasted for another couple of hours.

I left invigorated and excited.  Is there a way for these young, smart product companies and their founders to inspire and spawn a product culture in India?  Yes, I think there is and I for one am a believer.

iSPIRT Sales RoundTable – Startup Sales, Lead Generation, Channel Partners

First of all, huge thanks to Vizury for sponsoring great food and the premises to hold the round table. Many thanks to Aneesh, NRK Raman and Srirang for leading the session and providing valuable inputs. And of course, to all the participants for the energetic discussions and knowledge sharing.

Here are the key takeaways from my notes.  Please note that there are several nuggets of practical advice based on the experiences of the session leaders and the participants, and not just standard text book stuff. It was a great learning experience for me and I hope I can pass on some of it to you.

While we touched upon a lot of topics, we spent considerable time on startup sales, channel partners and selling to geographies outside India, and lead generation and qualification.

Read on to know more.

Startup Sales and Hiring Salespeople 

Best guys to sell during early stages of the startup are the co-founders themselves, even if they don’t have sales background.  Initially, you will stumble, but you will learn and figure out what works for you.  If founders cannot sell the product in the first 1 or 2 years, then you must seriously evaluate the viability of the business

Once you’ve made the initial sales yourselves, then you put in a structure. External sales guys need to have conviction in the product to sell it.  That will be lacking during the early stages of the company – but founders have that conviction.  Hence founders can sell better during the early stages.  One participant mentioned that for the first 3 years, he and his co-founder were selling and only later they looked at a professional sales person.

Getting the first reference customer is always the toughest part. One you have a reference customer, momentum will build.

Hiring an external sales guy is not a good idea at the beginning.  Identify folks from engineering and customer facing teams who have the aptitude or inclination to do sales and ask them to lead Sales.

Culture fit is very important in a sales person. Also, check if the person has spent 4+ years in a single company – that shows that he has been delivering results.  Sales people should also be pushing back to you.  This shows that they are getting feedback from the field and are informing you about market situation.

It is a good idea to raise investor money to scale up business development.  Investors are willing to invest in this once the product has been validated and you have a few customers.

You need to experiment to figure out what works for you. For example, for a company that made trading software, an ex-trader worked great as a salesperson instead of a seasoned sales guy, because the ex-trader was able to relate to the customer.

The sales person should have hunger and also have a good history of past successes.  Consider the age of the sales person too – in some industries, an older person might work better as the customers expect to see maturity.

Like pair programming, “pair selling” is also a useful thing to try.  This helps in DNA match, culture fitness.  Some companies have paired an account manager or a product manager with the sales guy.

In complex sales where there are multiple stakeholders from the customer’s side, ensure that you sell individually to all the influencers.

You need to pay close attention to how the customer buys.  Branding and marketing engine is also very important in “creating a desire in the customer to buy”.

Channel Partners (local and global)

When creating partnerships (in the context of channel partners and resellers) globally, be careful what works and what does not in that culture.

In general, partnerships work well outside your headquarters and you can have multiple non-exclusive partnerships.  People like to do business with a local person.

Look at the credibility of the partner.  Is the partner knowledgeable and up to date in your domain?  For one company, partnerships worked well in Brazil, but did work very well in Europe.

When you set up an office in other countries, you need to be aware of the labour laws regarding how easy/difficult it is to fire non-performing employees, taxation, accommodation etc.  Going with a partner alleviates all of this to a great extent.  However, you need to have someone from your team who is responsible for managing partnerships.

Remember that the main motivation for the channel partner is money. So make sure there is enough for them so you have their mind share.  Even if that means that the channel partner makes more money than you.  Initially, you need to be very involved so the partner tastes success. For example, you need to generate leads to the partner, go along with him to complete the sale and let him make the money from your efforts, initially. This will get them excited.

Similarly, if you want to have sales offices or channel partners in other locations, encourage well performing sales folks from headquarters to move to that location, stay there for a few years to set up processes, signup channel partners, hire local people and train them.

You can start by signing an MOU first and have some targets.  Then after 6 months of so, you can sign a formal partnership agreement.

One company also pays 20% of the salary of an employee of the channel partner.  Then you can have a joint business plan with your partner to set goals, metrics tracking etc.

You should look at your customer acquisition cost and consider pay a huge chunk (say 80%) of that cost to the channel partner.

While making sure that you do not have exclusive agreement with a single partner, be sensitive that having multiple partners in the same geography can lead to partner conflicts which in turn could be bad for your business.

Also, look at companies that sell complementary products. Maybe you can partner with them too so they make money by cross selling your product.

Channel partners are not really a must. If you can make your product easy to setup and use, then you can focus more on marketing, google adwords etc (e.g. SAAS models).  Also, in these models, you need to ensure that partners have good incentives as typically the ticket sizes are smaller and they don’t have opportunities to make money from “implementations”, training etc.  One company took an approach to let the partner decide the pricing in a particular geography with the agreement that a percentage of the revenue goes to the partner.

However, if the product is not easy and you need people on the field to educate the customers, you should definitely consider channel partners.

Sales Engine is similar to Engineering Engine

One of the biggest challenges faced by Indian product companies is that the founders do not have a sales background.  Our ecosystem has evolved to a point where we can build great products, but lack the sales acumen.  There was consensus among the participants that sales is much harder than engineering. Engineering, while no doubt hard, is still manageable.  We know the inputs, outputs, risks and mitigations with a high degree of certainty.  Sales is a different beast with lots of uncertainties.

Srirang guided us to treat the sales engine also similar to the engineering engine.

The three pillars for the Sales Engine are (a) People, (b) Processes and (c) Technology.

People: Competencies, Incentives, Org Structure.  As in engineering, there can be a magnitude of difference between an average sales person and a good salesperson.  So hiring the right candidate is very important.  And you have to set up the correct incentive program and org structure to ensure motivation and excitement in the sales team.

Processes: Strategy, Execution, Metrics.  Again, as in engineering, you need to define the strategy, the execution plan (who does what) and what metrics you are going to use to measure execution. 

Technology:  Enablement, Communication, Monitoring.  Sales team needs to be enabled.  For example, ensure flawless demonstrations and training to the sales people so their selling experience is smooth and they focus on the customer.  Use the right tools (e.g. Excel, CRM, SalesForce) to track and monitor their activities.

At different stages of the company, you need different kinds of pillars – which means you need different kinds of sales people, different processes and different technologies.

Lead Generation and Qualification 

The classic sales process consists of five stages:

  1. Lead Generation.
  2. Lead Qualification
  3. Relationship building
  4. Solution design
  5. Negotiation and Closure

Depending on the kind of product, some of the later steps might not be relevant, but lead generation and lead qualification are of primary importance.

Focused lead generation is better than generic lead generation.

Some companies have used databases of leads to generate leads and have found it useful for mass email campaigns.

LinkedIn is a good source to connect with prospects (with premium account, you can send InMail too).  After connecting, you can then try to have a call/skype to show your value proposition, if there is interest.

Someone mentioned that LinkedIn Ads worked for them.  On Google adwords, there were mixed reactions.  Some say it is costly, but it helps to put the word about the product. Google adwords can generate a lot of leads, but people also noted that there was a lot of churn from these leads (in the context of SAAS based business).

If you have a horizontal product, make a vertical offering. Your campaigns have to industry specific and you should talk their language. Customers are looking for a reference customer they can relate to.  This produces better results than targeting all verticals with a horizontal positioning.

Metrics is very important in the sales engine.  You must be measuring and tracking customer acquisition costs. And track them at various stages of the sales funnel.  For example, let’s say you generate 1000 leads, out of which 600 are then qualified, 400 of them get to proposal stage, 200 get to negotiation, 150 closed and then 130 retained for renewal.  At each stage, you must count the man hours spent and put a cost for that.  This will help you improve your sales processes – particularly in the area of lead qualification as you can see what kind of leads are working and you can pursue folks who are likely to buy.

The first step is to establish Qualification Criteria. Then evaluate each lead and assign score to lead based on the qualification criteria.  Based on the score, put the lead in one of three action buckets – pursue, drop or nurture (i.e. keep warm).

Also, ensure you pay attention to negative attributes to qualify leads based on your experience and judgment – e.g. if a company has greater than 2000 employees, then they might not be suitable to your business.

Don’t take up a wrong customer at startup stage. It can be a drain on your resources.

There are three main aspects of lead generation.

  1. Publish
    1. Blogs
    2. Website
    3. Industry Magazines
    4. Whitepapers
  2. Promote
    1. Speaker in conferences
    2. Advertisements
    3. SEO
  3. Connect
    1. Email
    2. Cold call
    3. Road shows
    4. Referrals
    5. Social Media

Conclusion 

The discussions “raised awareness” and provided lots of data from practitioners.

The key thing to remember is that there is no silver bullet and what worked for someone else may not work for you. Kishore Mandyam went one step further and said that what worked for them six months ago might not work for them now!  While there is no magic wand, you can look at general guidelines and best practices from the experiences of 20 odd practitioners.

If you have any more tips or best practices, please do write them in the comments section.

Tweetable Takeaways

Best guys to sell during early stages  are the co-founders, even if they don’t have sales background. Tweet This.

Getting the first reference customer is the toughest part. One you have that customer, momentum will build. Tweet This.

Channel partners should make enough money off you. It is OK for them to make more money than you. Tweet This.

Invest in channel partners so they invest in your product. Tweet This.

Sales Engine is similar to the Engineering Engine. Tweet This.

If you have a horizontal product, make vertical offerings. Industry specific campaigns work better. Tweet This.

Fellow Entrepreneur, Ask not what the Buyer can do for your company!

For about 2 hours in the RoundTable session, the intense discussion was centered around how to be ready for M&A. Buyers, who have an interest in your company will ask about your product, your markets, your customers, your revenues. As an Entrepreneur, what is your first ask in return? Usually they are any of the following. What will the buyer pay us? Is this the right time, should we wait for a better valuation? What will the buyer do with us post acquisition?

Jay Pullur, CEO, Pramati Technologies, helped us realize, that the first question should be, what will our company do for the buyer? What is the fitment of our product or solution in the buyer’s vision? You need to ask and most importantly answer this yourself. Don’t expect the buyer to answer this, if you are, then you are not ready for any deal. It was a moment of epiphany. Fellow Entrepreneur, the first step to readiness for an M&A is to ask, what your product does to the buyer’s company, not what the buyer can do for your company.

Four hours of entertaining stories by both Jay Pullur, Pramati Technologies and Sanjay Shah, Invensys Skelta, 12 companies and about 20 participants got the opportunity to interact and learn many of the wise nuggets from these industry leaders. Not all elements of the session can be reproduced here, but below are some of the key highlights and learnings.

Wise Nuggets – Its all about Knowing (see below for details)

Wise men plan ahead. The pain or the gap that your company addresses should itself be strategically planned. Positioning your entire company, like a pretty bride will ensure the suitor will come. According to Jay, technology buyers in the US do several acquisitions in a year, so for them its just another transaction, they are not emotional about it, not attached to it, its just their job. So the interests of the suitor should always take precedence, otherwise the suitor will move to the next company on the list. Sanjay added that using an iBanker to help you in the match-making process or to source the right type of buyers is also a very beneficial activity. To sum it up, like for any Sale, Seller has to make it absolutely comfortable and easy for the buyer to buy. The checklist includes, but is not limited, to the following.

    • Know or Define the right fitment (addressing the GAP in the buyer’s arsenal is most important)
    • Know your Position (be clear on the landscape and position your product very clearly)
    • Know when to exit (constantly guage the pulse or the sentiment of both the market and the buyer, macro-economic conditions can play havoc, sense the weight of an opportunity)
    • Know your Buyer’s problem – Demonstrate that you know the Customer’s Exact Problem (POC, Story boarding the Pitch and strategy all come into play)
    • Know your Product (Don’t use flowery language and adjectives- show the customer, you are only solving a pain – which is not a glamorous job to do)
    • Know your Buyer – Gauge the buyer’s impending need to buy (They will usually reciprocate with the same rigor as you)
    • Know the Competitors, their strategies, their features, their benefits and most importantly their weaknesses.
    • Know your-self (You know that you have built a rocket or a rickshaw – if you are in a rocket, you should be on-top of the short-list)
    • Know your price (indicative pricing is most important – make sure all research leads to a best possible quote)
    • Know how to close (all the criteria for success should be met, there is no alternative for preparation and effort)
    • Know your readiness (systems/processes for closure, like record-keeping, employment contracts etc)
    • Know what the deal entails (who brings the deal – may be an iBanker, upper thresholds, lower thresholds, etc)
    • Know your Organizational structure (are you are platform, are you embeddable, do you need domain expertise)
    • Know the parties and their motivations (Eng Team in California v/s CFO in London – who is the deal maker, who is the deal breaker)
    • Know the term-sheet (if not hire legal guys or ibankers who can help).

Insights and Learnings

There were many learnings, which definitely are tied to the personal experiences. Some of the key ones are

When Jay sold Qontext to Autodesk he found them to be extremely professional and did not find any price penalty, or discrimination, because of the Indian-ness of it. In fact, he was able to sell it for a very good multiple. The best valuation/revenue multiple silicon valley companies to could get. So its a myth to think that a technology product from India, might get the raw end of the deal.

When Sanjay sold Skelta to Invensys, he understood the weight of the opportunity. Even though the conversation was not intended for M&A, both parties realized that its mutually beneficial to do so within a couple of hours of conversation.

Sanjay’s additional advise, raise adequate money at a comfortable time, and continue to stay relevant via media briefings, etc all the time.

    • Other general learnings were also discussed. To note a few,
    • Learn about Earn-outs, ESOPs, Liquidation Preferences (Be real to scale)
    • Invest if you have clarity on Exit (do everything possible for the deal to come to a fruition, POC, be aggressive, call the CEO if needed)
    • Learn about Black duck tests, acqui-hires, escrows for indemnification, etc.
    • Define the outcome post M&A and get consent.

Conclusion

Overall M&A stands for all your Moves & Acts. Its all about the Story, your clarity of all the characters and props in the story, and their acts. Commercial success is most important, direct accordingly. Re-takes’s are possible, in-fact easier provided you make your first venture successful.The hilarious moment and the most catchy line came from Jay. Someone asked about honesty and truth, during the process of due-diligence, for which Jay laughingly said, “Tell the truth with such conviction, that the buyer will lie to himself”.

iSPIRT Playbook Roundtable: Positioning and Messaging – Lot of it is common sense!

If your grandmother does not understand your message, then you might as well not communicate is the crux of what was discussed during this Roundtable facilitated by Shankar Maruwada and Nandita Sinha.

This roundtable discussed the ‘What’ of the positioning and messaging and not the ‘how’ of the positioning. There was very little theory except perhaps setting the context and the entire session was practical.

To illustrate the significance of positioning and messaging, one of the participating companies gave an elevator pitch thinking the rest of us are his prospective customers. Then people spoke about what stuck in their minds about the pitch. It varied from ‘I lost him’ to ‘I was thinking of a completely different business model’. The person who gave the pitch looked at all the responses to understand if there were any surprises and what needs to be the part of their messaging.

Discussion on the first pitch led to the understanding of the following:

  1. The curse of knowledge forms a part of all the messaging – what is easily understandable for us is not understandable for the market.
  2. Often times, people start to have internal chatters – they start to think even before the pitch is complete and the attention span is just about 30 seconds.
  3. Most messaging is at a conceptual level and addresses the left-brain of their audience, which does not persuade people to make decisions. Try addressing to their emotions, their right brain and the easiest way is to do these through stories.

Using the first pitch as an example, Shankar explained what goes into creating a tight message and it was

  • Identify the customer segment. You can have one overall messaging of your offering and can have multiple messages for multiple segments
  • Setup is the context of your offering. It can be some challenges that your customer segment faces or the industry faces. There can be multiple setups to your messaging
  • Explain the benefits of your solution. How your offering is unique to the customers need will be the persuasive part of your pitch. Setup combined with benefits is what would make the message that you communicate
  • Features and supporting credibility will have to come after this phase of setup and benefits

After this, one more exercise was carried out where all the participating companies were asked to write down 3 setups and 3 benefits while avoiding features. All the pitches were discussed at length and I am sure all those who attended the Roundtable went back a lot wiser about messaging.

Shankar emphasized on a very important fact that you may not crack your messaging in one sitting and it has to be an iterative process. He also asked people not to think in words and instead begin with stories, then move on to thoughts and then switch to words. This is the best way in which you will get to do your messaging right.

This Roundtable was attended by 9 companies with 12 participants and 2 facilitators. This roundtable kicked off to a hilarious start, during the introductions most people in the room claimed that their Saturday night favorite drink was either butter milk, tea or coffee.

I am looking forward to more such sessions.

Don’t try to solve every customer problem by a line of code.

My First playbook roundtable. iSPIRT’s first initiative at Hyderabad, was a 4 hour insightful RoundTable that was  organised by the ProductNation free of cost for the attendees, which most Hyderabadi entrepreneurs gave a miss and are sure to be regretting the missed opportunity and the learning possibility that it offered.

Sridhar Ranganathan, ex-VP of InMobi, a Product Guru and Aneesh Reddy, the CEO of Capillary Technologies, which is in the business of providing mobile-based customer acquisition, tracking, and loyalty business, were the key speakers for the day .The first half of the session was mostly participants- driven where each of us were asked to share our day-to-day stories at work along with our expectations from the workshop.

Below were the most common challenges that emerged from our discussions:

  1. How to validate the need for a product?
  2. How to prioritize from the features wish list?
  3. What is the exact role of a Product Manager to drive successful product deliveries?

Validating the product need

Sridhar began the afternoon session by saying that, “The best way to validate the need for a product was constantly interacting with the customers and understanding their requirements.” He said there are 2 primary things for a product startup to be successful in the long run. One is Speed- wherein it is important for start-ups to be iterating faster as its always better to Fail Fast and recover quickly.

The second is to be data-driven wherein start-ups should be religiously looking and researching in terms of numbers both externally and internally .He recalled a popular quote, “Data is God and code is only a messenger”, which was truly an eye-opener as it made me realize the importance of constantly looking at data and then using that to validate the need of the product.

Aneesh shared a few of his real-life examples on how during their initial days at Capillary Technologies, they had spent over 6 months talking to every store owner be it big or small, to understand their needs and how they literally changed their product idea thrice before conceiving the final version. He also said that listening to customers played a prominent role in shaping the product rather than merely selling. He also spoke of how Capillary mainly stuck to one mantra i.e.- “Locking down on the cheque with the customer even before building a feature for them,” which not only drives a sense of stickiness and commitment with the customer but  also ensures the right customer need is addressed.

Priortizing from the Features Wish list

This is by far the most common challenge faced by all of us today, which Sridhar strongly advocated by highlighting the need for PMs to start questioning  every feature-benefit ratio in order to prevent any feature overload. He also stressed on the need for every PM to evaluate if every feature was designed for the ease of the end user. He added that it is important to add features in a disciplined manner and remove the excessive features ruthlessly. Bottom-line being – “Don’t try to solve every customer problem by a line of code.”

Aneesh also shared on how Capillary builds prototypes and demonstrates them to customers to ensure if the customer’s wish list has been fulfilled or not and that this has helped Capillary to keep the fine balance between what their customers are looking for and how the future of the product would shape up.

Role of a Product Manager (PM)

Sridhar began asking each of us to define what we considered the role of a PM to be and after everyone was done presenting their respective  viewpoints, he mentioned the below as some of the qualities he would expect a PM to possess:

  1. Empathy towards customers – the willingness to engage, understand and appreciate customer needs.
  2. Confidence to have a point of view
  3. Ready to build a product for the future
  4. Culture of experimentation and being data-driven

Personally what I considered the best piece of advice for PMs is, “to be responsible for the Outcome and not the Output”. This actually accelerates the need for PMs to question every effort for a feature request and evaluate what would be its ability to generate revenue.

Overall, it was an immensely insightful session. I would also like to thank Sridhar for taking time out from his busy schedule to enlighten us. Huge thanks to Aneesh for being extremely patient and for responding to all our queries.

I highly appreciate the efforts of Avinash to create such a splendid product management session wherein we not only get a chance to meet/network with product gurus but also help us rethink our working strategies. Last but not the least, I would also like to thank Pramati Technologies for being an excellent host for this Roundtable.

Eagerly looking forward to the follow-up session soon!

Post Contributed by Thulasi, Associate Product Manager at Versant Online Solutions Pvt Ltd and can be reached at thulasi(at)moozup.com

Product RoundTable Bangalore @ Vizury Office

We had some very good hosts @ Vizury office and also joined by their product folks Shiju and Subra for the Product Round table that was organized last Friday. The other awesome people who were part of the event were Siddharth Ramesh (Exotel), Jose (Weavedin), Vinay Simha (Dfy Graviti), Sridhar (ex-Inmobi), Avinash Raghava (Product Nation), Nari Kannan (The man with experience of over 7 startups and currently working on a project for Barack Obama), Anjali (Capillary), Chandra (i7networks), Santosh Panda (Explara), Venkatesh (Insieve), Pandith (Impelsys).

The discussions revolved around 3 things in Product:
1. How to track growth & health of a product or Product Metrics
2. Product v/s Sales (When to listen to customer and sales person and building the feature)
3. Product Marketing

and 2 small sessions of Santosh explaining his re-branding story from Ayojak to Explara and Venkatesh about how they balance in a unique way not building before selling and working on product demo’s without having to build the features.

Sridhar led the moderation of the session and showed his secret sauce of a graph designed for Product decisions:

The graph helps Product folks take decisions based on a problem, and how ideally first level and second level product problems when probed can be solved by Education & Processes. This sort of product thinking gives more bandwidth to technology & product managers to focus on building the tech as well, apart from features as a solution to everything. It helps keep your product from being stretched into a services play.

Nari Kannan & Sridhar again spoke about how the health of a product and its metrics can be linked to the business metrics by the GEM (Growth, Engagement, Monetization) theory.

A lot of discussions around how sales folks like to ask fore more features, and how to decide what to build and what not to, but the graph helped a lot.

A snippet on the learning from Santosh’s Ayojak to Explara journey was that he communicated the brand change much in advance internally and decided to leave aside feature requests etc. and kept focussed on the UI/UX and internal communication of the change. It helped everyone realize that multiple massive changes should not be attempted together.

Venkatesh also spoke about how they develop new feature requests in a staging environment, and release it just for the customer in a prototype without pushing the code into the product, and ask him/her if they will pay for this and is this what they want. It is an interesting way to get a yes from the customer before getting your tech team working on something which might or might not sell.

All in all, everyone had some great learning’s, a few beers and cookies along with chai and coffee thanks to the Vizury team, and we hope to get some more Product Roundtable’s running consistently and involving more of the product companies to have cross learning’s via sharing best practices.

SMBs and Indian Software Product Industry: Intertwined Fortunes

A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty. ― Winston Churchill

Small and Medium Sized Businesses (SMBs), the growth engine of India, are on the threshold of a tremendous opportunity. Globalization of trade and the rapid proliferation of computing and communication technologies are affording them a platform to expand their reach to national and global markets and compete head-to-head with global players. But on the flip side, those SMBs that do not recognize and capitalize on this wave quickly are likely to be swept away by the stiff global competition. If SMBs are to successfully counter global competition in their own backyard and elsewhere, they need to adopt software technology on a large scale, enabling them to run their businesses efficiently and effectively. But, few SMBs have the financial muscle or the technical know-how necessary to implement customized software solutions. Therefore, the majority of 13 million SMBs would count on standard business application software that requires minimum upfront investment and ongoing maintenance, to fuel their growth. Such software is distinct from the software deployed in large corporations and I refer to this as ‘Small Business Application Software (SBAS)’ to distinguish it from large enterprise application software.

Business application software (SBAS) such as accounting software, ERP, CRM etc., offers multiple benefits to SMBs –

  • As shown by research, SBAS significantly enhances the internal productivity of SMBs as well as their ability to manage relationships with vendors and customers, leading to superior firm performance.
  • It forces SMBs to adopt standard processes and best practices, moving them rapidly up the quality and value curve.
  • Most important of all, by streamlining day-to-day operations, it not only frees up the entrepreneur’s time for strategic planning but also assists her with the tools needed to make informed strategic decisions.

 

The question now arises – How can Indian SMBs get the right fuel for their growth? This is where a vibrant Indian software product industry plays a critical role. Indian SMBs cannot realize productivity and performance gains from software that is designed for developed markets. This is because the business environment in India (and other emerging markets) is substantially different from that of developed markets. It is volatile, with frequent regulatory changes, and rife with institutional and infrastructural challenges. For instance, there were 340 updates to Indian tax laws last year. That’s more than one tax law update every business day! Therefore, SMBs need software products that can buffer them from such volatility and help overcome the challenges associated with operating in this unique and dynamic environment. This is possible only when products are designed specifically for the Indian SMBs – and this is best done by a strong indigenous software product industry.

Indian software product companies are better positioned than foreign firms to support the Indian SMB market. This is because,

  • They have lower cost structures which allow them to meet the stringent price-performance expectation of Indian SMBs.
  • Further, because of their familiarity with the operating environment, they can build effective channels to drive software awareness and adoption among Indian SMBs- remember that Indian SMBs are more like enterprise customers than individual buyers in that they expect suppliers to sell to them.

 

In summary, there is a symbiotic relationship between SMB growth and a robust software product industry in India. SMBs need the software product industry to power the next phase of their growth and make them globally competitive. At the same time, the Indian software product industry, having missed out on the individual productivity and communication software wave, can leverage the large SMB market in India to establish itself as a global leader in the SBAS space. In other words, software product industry is the fuel for the SMB engine and the SMB engine can drive the Indian software product industry towards SBAS leadership. By moving in lockstep and moving quickly, India can create a competitive SMB sector and a vibrant software product industry.

Learning and growing together at the iSPIRT #Playbook Roundtable

iSPIRT Playbook Roundtable in Delhi Flickr Stream

The Product Management Playbook roundtable repeated last week with an intent to check progress. The mentors – Amit Ranjan & Amit Somani were keen to know the problems product managers faced while they executed on ideas discussed in the previous episode.

We could guess this would be one power packed session, especially from the conversations that ensued over lunch. There were active discussions, funny anecdotes and heartfelt laughter which filled the Eko cafeteria. New bonds were built and older ones renewed as we savored the delicious dishes.

The RoundTable was started with Vikram Bahl of Yavvy.com presenting his product management approach. Presenting a meticulously planned mind-map, his presentation discussed the challenges, the solutions and their outcomes. Elements from the previous round-table were clearly visible. “All of our metrics have now been divided into 1/1/1 (1 day/1 week/1 month)”, he told picking up on the 1/1/1 metric philosophy suggested by Amit Somani of MakeMyTrip in the previous round-table. He also mentioned that the “email-suggestion” and “leveraging-existing-paradigm” suggestions by Amit Ranjan (of Slideshare) had done them loads of good and the results were very encouraging. “This time, I got advice on stuff that goes beyond traditional product management, it was more around positioning and marketing”, said Vikram as he reflected upon the discussions.

Next, Bishal Lachhiramka of Drishti soft spoke about his own product management approach. Touching upon organisational structure, product manager roles and global benchmarks, this was another amazing discussion. Participants shared their own experiences and what has worked for them and what hasn’t.

Tarun Matta of IIMJobs also got some amazing feedback on some of the things they intent to do. Picking up on the experience in the room, he picked up on strategy and executive advice on what could propel IIMjobs onto the next orbit of growth.

We also had Shantanu Mathur introducing ‘Smartwards’ and Mayank Dhingra of Paytm bouncing off ideas on how to build product-management metrics for online products. Even though, this was their first round-table, they found themselves brought upto speed by the mentors.

The final few minutes of the day were spent discussing “how to divide and structure roles and responsibilities of different program managers”. Avinash Agarwal and Abhishek Sinha of Eko, presented a delightful case-study which helped sum up the discussion.

As Nakul Saxena of iSPIRT summed up, “I just see so many product managers negotiating the learning curve together. That is the surest way to move quicker and grow faster. In contrast to any other conference or discussions, the round-table presents every product-team with a close-knit group to discuss personal challenges and personal experiences. ”  

Doesn’t that sum up what these round-tables are all about. Participate in the next one to find out!
With inputs from Vikram Bahl of Yavvy.com

Action Plan for increasing M&A opportunities for Indian product startups

Indian product companies punch below their weight. Despite huge innovation and rising entrepreneurship, most Indian product companies are invisible on the global map. The reasons are many, but a big one is the lack of meaningful exits for companies that actually create value in their product markets. This paper focuses on a plan to address this gap.

The iSPIRT position paper of March 2013 identified several issues that need to be addressed to improve M&A activity in the US-India corridor. While discussions with the Product Nation community members strengthened the propositions made, we needed to get a buyer’s perspective before formulating an action plan. This led to an Executive Brainstorming Session with several prolific technology leaders and acquirers from Silicon Valley.

The brainstorming session at Palo Alto, CA on May 21, 2013 had broad participation from across the tech industry and was attended by M&A professionals and senior executives from Autodesk, Cadence, IBM, Intel, NTT Docomo, Facebook, Paypal/Ebay, VMware, and Walmart Labs. The iSPIRT team also had a private meeting with the head of M&A at Oracle. Representatives from Cisco and BMC could not be present due to last-minute issues.

On May 22, the iSPIRT team met with the CEOs of about 20 Indian startups, most with some presence in Silicon Valley to gain better access to their markets and customers. This meeting further stressed the need for improving M&A exits for startups, particularly for those that lack strong US VC backing. There was unanimous agreement within this CEO group that improving company readiness, visibility and access to potential acquirers would go a long way in planning successful exits. Inputs from this meeting have been included below.

iSPIRT M&A Connect Action Plan 2013 Version 2

6th iSPIRT Playbook RoundTable: Challenges in building a global software product company from India

In the continuing series of Round Tables product veterans Samir Palnitkar, ShopSocially and Jatin Parekh, AirTight Networks took the participants through a journey of discovery about why they want to go global and taking a critical look at the challenges they must overcome.

It takes a guy like Samir to lay the foundation for such a Round Table, having stoked the discussion with his experience and adding fuel by way of eliciting ideas and experiences of others. There’s no quick formula but the session did throw up some easy mantras to achieve those Global ambitions…

Some interesting takeaways from this session :

TEAM:

–       Hiring for overseas is always a challenge and you can’t be careful enough

–       Get a co-founder with a sufficiently high stake in the game, and one who is ready to adapt to the call of the hour.

–       If you know the person from earlier, nothing like it

–       Stay away from expensive consultants and retainers. Find someone who will take less cash (and therefore has had a prior successful exit / financially secure)

–       Write down the issues, objectives, compensation, way things are done, who does what, 5 year vision, etc. These discussions need to happen 

Experiences of those present:

–       One of the RT participant founders even camped in the US for 3 months to find the right guy, interviewing over 15 persons identified through various contacts. They evaluated trust, skill and cultural fit before deciding.

–       Most people do not want to be the lone member of startup in the US because all decision making would happen in India. One of them had a member already selling remotely so were thinking of moving that person to US.

–       If there are 3-4 co founders, there is enough mental bandwidth to get one person to US for 6 months to set things up.

–       Get partners to sell for you, they front end and sift thru the leads. May be encourage one of the partners to join you, as did one entrepreneur who had a good partner in E&Y front ending and finally robbed E&Y to get his co-founder !

–       In a nutshell, don’t compromise on this first hire. 

PREPARED TO TAKE THE FLIGHT ?

–       Start selling globally only if you can fund the sales cost for at least a year

–       It’s ok to do some services revenue to generate some cash. But this is also the biggest pitfall, if you end up doing too much customization that cripples you later. 

Key considerations:

–       You have to learn how to sell if you don’t already. Thumb rule is – if you can’t sell your product, nobody can.

–       You should have a sufficient funnel and regular flow of enquiry / conversion / sales and cash flows. Ok that’s a lot to ask but then that’s what it needs !

–       Prepare the Sales play book. A new person cannot invent the playbook to sell in US for you. 

PRODUCT MANAGEMENT

–       Do you want to keep Product Management close to the customer or close to the R&D team?

–       Typical challenges in this are the ability to be aligned. Clear internal communication is crucial in motivating the team for the higher purpose

–       Delivery teams are usually in India, however you need to deal with the challenges of motivating team from a distance and account for cultural differences

The practical Product Manager:

–       Understanding the higher purpose and communicating it again and again is very important. If engineers are in the same office as sales guys then its easy, motivation happens. But if teams are physically separated then you have to build the channel to keep that communication going.

–       Communicate back to sales what problems engineering is facing.

–       Product Manager must have a regular travel plan and must meet customers if working at a distance from the market. This is crucial to get the alignment early on.

–       The PM cannot be note taker, taking customer requirements and giving it back verbatim to engineering to build. He must understand, negotiate and make intelligent distinction between features and requirements.

–       Priorities should be clearly published in writing.

–       Engineers should have the freedom to think and push back on features, but within boundaries. That’s when they can understand the purpose vs just coding.

–       Engineers must have first hand communication with customers, go for customer meetings, handle support calls etc.

–       When hiring engineers, set the expectation upfront that you have to do everything, and even learn outside your core competence. A Startup cannot afford to have people rigid within their own area. 

MARKETING

–       The biggest conundrum is in expectation mismatch, US teams being very “look” orinted and India teams being “fact” oriented

–       Interpretation of specs is usually different for each team, and quality of collateral needs to be extremely high to appeal to a US audience

–       The simple approach is to keep everything that requires a “handshake”, in the US and to teach India teams to be perfectionists.

–       If you need to get copywriting, don’t even think of getting it done in India. The lingo, the flow has to be completely American – leave that to an American.

–       Use a professional UX design shop if you need to

–       Use professional agencies for PR, like PRWEB, etc. 

SALES

–       Necessarily should be close to the customer. If the product requires a handshake, then you definitely need a US team member.

–       At the very least you need someone to stay up at night and receive calls

–       Prospecting via Linkedin, using polls and doing cold calling from India are usually successful approaches 

Sales and Marketing in the US is a big discussion in itself. A lot was left to be discussed, perhaps deserving an entire session devoted to selling in the US market. Another day, another Round Table then. 

ProductNation is the Go-To destination for many a successful software product. There are several amongst us who have tasted success in the global market. Do share your experience right here.

Fifth iSPIRT Playbook Roundtable: Product Manager, the Skill in Demand

It is a cliché to say product management is both art and science. The product manager’s function encompasses a range of tasks, only limited by the company’s vision. Deep Nishar, Senior VP, Products and User Experience, at LinkedIn, told the audience at Nasscom Product Conclave 2012 that, “product managers should have brain of an engineer, heart of a designer and speech of a diplomat.” The product manager with such an expanse of skill set is hard to find in India. With the intention of bringing experiential learning and to ignite conversations among product entrepreneurs so that they learn from each other, iSPIRT, the think-tank for startups, is organizing Playbook Roundtables that facilitate transferring of key knowledge through an open discussion. In the fifth Playbook Roundtable organized at Chennai by iSPIRT, Sridhar Ranganathan, who has rich experience as a product manager, shared anecdotes quoting from positions he held at Zoho, Yahoo, and InMobi to define who a product manager is.

Sridhar’s naval architecture career did not last long. A chance meeting with Sekar Vembu, founder of Vembu Technologies, landed him a job at AdventNet (all three Vembu brothers, Sridhar, Sekar, and Kumar were part of AdventNet then). He was placed to manage a team that was working on a product. Not a geek, he took three months to understand Java Script. A management shake-up at AdventNet properly designated him as product manager. Then began his tryst with product management. At Zoho, the discipline of product conception, execution, and delivery was practiced with a high level of checks and balances. With a small team and margin for error almost non-existent, Sridhar learned to work with constraints to deliver software products. Moving on, he headed the team working on Maps at Yahoo. This proved to be challenging as managerial oversight was nonexistent but any senior level meetings thrashed any feeling of achievement. Sridhar by now had crafted the art of product management and he had an excellent team to work with. Then at InMobi, his challenge was scale. He was able to successfully navigate through the phase where InMobi’s ad impressions went up from 50 million per month to 2 billion per month.

The product culture

There were 15 participants from OrangeScape (Suresh Sambandam and team), Fresh Desk (Smrithi, product manager), Kallos (George Vettah), LPCube (Lakshman Pillai), Array Shield (Vasanthan Kumar), ContractIQ (Ashwin), Twenty19.com (Karthikeyan Vijayakumar), RailsFactory (Mahendran), Fix Nix (Shanmugavel and team), Social Beat (Suneil Chawla), and Humble Paper (Vivek Durai), represented by its mostly founders. Suresh was keen to know how with a small product team (Zoho instituted a culture of a seven-member team to work on a product), Zoho was able to recruit college drop-outs and train them to work on products. Sridhar said if the company is big enough and has a strong culture (such as escalation of wrong codes, build times, and customer complaints to the highest level if not done within a set time frame), such experiments are possible. In Google, you know the person who is going to work because of the recruitment process but at Zoho, you have to groom the person.

Sridhar strongly emphasized that data plays a big role in product management and went on to say that “if you build technology products, your core data model and technology stack determines your business model.” He listed various challenges faced by organizations such as SalesForce to remove duplication of data. For example, to change a primary key, Zoho needed 14 months. George Vettah added that Ramco had to reengineer its offering after SAP effectively took away its market share. Sridhar gave away one more of his product philosophies: “If there is a constraint in the product, and if you have the market, you could only pray that the market does not go away till you reengineer the product.”

Education to Product: the product continuum

Through a graph, he illustrated the various stages of the product continuum: Taking problem complexity on one axis and scale or impact on the other, he said, for low problem complexity and low scale, education (of the customer to tell them why your product) is needed. At the next level, process needs to be defined (to quote an example, the process of how to apply for a passport online), Still further, at the higher complexity and more users, you need to define the procedure (how to fill in the form of the passport application), and still at a higher level, you need to provide a solution to the problem. But for a very complex problem with the highest impact (nonlinear), you need a product. So by understanding the need and the impact, you can execute your product strategy.

The product manager

He said that the fundamental role of the product manager is to identify the product that has the maximum probability of success. “The success metrics of a product determines the product manager’s action,” he added. This was followed by an interesting discussion on how the founder passes the baton to the next product manager as the company scales up. Kaushik from OrangeScape provided a fine example. The product manager has to work on three aspects: hygiene, spoiler, differentiator. A hygiene part of the product is not impactful but without it the product wouldn’t work. The spoiler is beating the features of the competition, and differentiator is the difference that your product makes. Further, at the first level, the product manager has to find users for the product, at the next the user level should be scaled, say from 2000 users to a million users, and further at the next level, if there is a drop in user level due to competition, the project manger has to devise ways to retain the user level. These three different stages require product mangers of different skill sets.

Finding the right product manager

Finding the right product manager is a challenge. Sridhar said the right product manager is identified by his ability to align with the vision of your organization and should have the potential to grow with the organization. For him, the hiring decisions are not done in a day. Sometimes it stretches to two months as he engages in long conversations with the potential candidate. Then an interesting discussion on organization structure where most of the times the product manger is asked to “influence without authority” was discussed. “The product manager has to be temperamentally strong,” stressed Sridhar. In many organizations, the developers and engineers are not direct reports of the product manager. Engineering team is headed by a senior engineering head. But your input on the engineer decides his grading. So at most positions, product managers have to work with teams that don’t directly report to them. By telling the team the importance of the product and by selling the vision (by exercising influence without authority), you need to get the work done. Smrithi, from FreshDesk, said influence without authority was one of the attributes looked for in a product manager in her earlier employment. George Vettah added that research has shown that for product managers did not possess strong right brain thinking (creative) or left brain thinking (analytical), but somewhere that balanced both.

Building the product, managing the team

The ideal way to enforce build discipline is to have a release ready after every build. This is practically impossible but if achieved, gives the product management team an edge on product release. This also makes sure that the product isn’t broken. Several R&D prototyping needs to be done before the product is handed over for completion to the engineering team. Once the product is fixed and passed to engineering team, it’s difficult to tweak again. So spend as much time in R&D rather than “release early, release often.” Sridhar said managing multiple products only requires you to have user interface and data operability aligned.

The product manager has to find the right time to pivot. Sridhar asked the participants to read Lean Startups by Eric Ries. The author has dwelt at length on pivoting. Failures are part of product management but how the product manager negotiates such down moments counts. The product manager has to be mentally strong. For any of the product manager initiatives, winning the trust of the stakeholders is key, stressed Sridhar. He added that the satisfaction of seeing the product completed after your visual thinking on it is immense. He said that the product manager’s role is cerebral as it involves a lot of thinking.

There were intense discussions when each of the issues was discussed among the participants. Vivek Durai, who is now solely developing a product, said his priority listing has changed and his to-do list has a lot of elements to add up to. Kaushik said his respect for his previous product managers had risen after this discussion. Suresh felt some more improvements can be made to the discussion format. Suneil felt that the discussions were insightful and opened his world to product management. Karthikeyan Vijayakumar said he would implement a lot of stuff from the discussions.

M&A is critical for the Product Startup ecosystem in India

Small $20-30m M&A transactions are the lifeblood of Silicon Valley. Over 400 such transactions happened last year. Israeli companies accounted for over 20% of these transactions. India had only a couple of transactions to speak of. This has to change of Indian has to become a Product Nation. 

iSPIRT is focusing on this issue through its soon-to-be-announced M&A Connect Program. The M&A Connect Program team – led by Jay Pullur and Sanjay Shah – was in Silicon Valley last week for listening meetings with various stakeholders. As a part of this exercise they hosted a long brainstorming session with more than a dozen M&A heads of serial acquirers ranging from Facebook to Vmware.

One other listening meeting was with about 20 Indian product entrepreneurs camped in the Valley. I was privileged to attend this meeting. It was a delightful 3.5 hours discussion. There were three set of issues that were discussed. One set of issues related to improving discovery of Indian startups. It turns out that addressing this is not as simple as doing a SV delegation or getting TechCrunch coverage. More than that is needed. The second set of issues related to the regulatory friction of doing small M&A deals in India. The third set of issues were about improving the readiness and preparedness of product entrepreneurs.

There was active participation by all the attendees. These included:

  • Indus Kaitan,Bitzer Mobile
  • Suresh Sambandam,OrangeScape
  • Manjunath M Gowda, i7 Networks
  • Asif Ali, Reduce Data
  • Vamshi Mokshagund, Credii
  • Rohit Nadhani, Cloud Magic
  • Madhur Khandelwal, ShoppingWish –
  • Kumar Rangarajan & Satyam Kundula, LittleEye Labs
  • Deobrat Singh, Gazemetrix
  • Rajan Arora, SchoolAdmissions
  • Bharath Mundiapudi, Orzota
  • Annkur P Agarwal, PriceBaba
  • Srikanth N, Arktan
  • Jay Pullur and Vijay Sundaram, Pramati (they hosted the meeting) 

 

I was most impressed by the dedication and passion of the iSPIRT team driving this effort. Their selfless commitment to making a difference was heartwarming. I could sense that most of us attendees felt the same way. The self-help community that iSPIRT is creating is truly inclusive and impactful. 

If you are product startup interested in exploring a possible M&A exit in the future do watch for more details about the M&A Connect Program. Try and become part of this. Given what I heard in the meeting, I’m sure that this new Program be game changing for the ecosystem.  

It’s time to open the gates wider

There is a growing nervousness among foreign investors putting their money in India. The Global Entrepreneurship and Development Index 2012 revealed that India, Asia’s third-largest economy, ranked 74th out of 79 countries, making it an unviable country to start a business. There is a growing nervousness among foreign investors putting their money in India.

Fewer than 150 start-ups are promoted by venture capital or angel investors annually in India compared to over 60,000 angel investments in the US. In 2011, Indian angels, constrained by regulations that make both investing and exits cumbersome, invested only about Rs.100 crore in around 50 deals compared with Rs.2,000 crore angels invested in Canada.

These figures don’t surprise Indian product software start-ups. India has produced few of the world’s leading software products, has 3,400 software product start-ups, and adds 400 every year. But it needs the right environment and incentives to build a world-leading industry.

For several decades, the Indian ownership laws and the investment and business environment have not allowed a conducive setting for the brightest of minds, many of whom have migrated to California. The new Indian entrepreneurs spend significant time on product development to build patentable products with a global market. However, as soon as the product gains traction, venture investors and professionals advise entrepreneurs to move the holding structure, if not the entire business, outside India. The main reasons are as follows:

Financing:

In today’s world talent and ideas are mobile. Singapore, Hong Kong, Chile and the UK are offering attractive financing (debt and equity) to Indian companies to relocate their business. They are also offering tax benefits. This is starting to result in real migration of promising companies out of India.

Maze of rules:

In India, we have foreign direct investment, VCI (venture capital investment), foreign institutional investors, Reserve Bank of India, fair valuations and draconian consequences for inadvertent slip-ups, while in most major economies there are no restrictions.

Taxation:

Capital gains (20%) as well as dividends (dividend distribution tax of 12.5%) even for foreign investors. In most major economies, foreign investors are not taxed on their capital gains and dividend income on their investments and owned businesses. India’s tax policy does not help a product business to attract the right kind of investors and acquirers, and is a hurdle for those interested in foreign acquisition in a stock deal as Indian paper is not an attractive currency. In the UK, for example, investors can write off any investment losses against income, and this significantly reduces their cost of failures.

Open economy:

India does not treat foreign investors on par with local investors, unlike the US, the UK, Europe, Singapore and Hong Kong, which have no restriction on ownership and company structures, and for the most part, regulatory filings (except some strategic and security related issues).

India needs to build an attractive regime to retain the software products business and its intellectual property, which is highly mobile. Incentives and special regimes for businesses that create IP and file for patents will give the industry a big boost. Among the solutions are the liberalized ownership rules with exemptions from regulatory filings and specific regimes (FDI/VCI/FII, etc.), specific exemptions from capital gains and dividend taxes for investors and tax exemption on foreign income of Indian software product companies. Why not go even further and build a fully liberalized virtual special economic zone for ownership and operation of software product companies, with India signing an iron-clad double-taxation avoidance agreement the virtual SEZ.

India needs to proactively grab opportunities, or risk driving the whole industry abroad. We have the potential to create multi-billion dollar global product companies every year, and the benefits could run into trillions of dollars over a decade or two.

This article first appeared in the LiveMint