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iSPIRT: Big ideas on little napkins. #iSPIRTturnstwo

You’ve heard of famous napkin sketches such as the Southwest airlines route map or Robert Metcalfe’s Ethernet diagrams. But did you know that iSPIRT also started out as a series of such sketches?

It was a late wintersun afternoon in December 2012. I was sitting in Bangalore’s Karnataka Golf Association across Sharad Sharma and Avinash Raghava. It was the day after a marathon few weeks of us “volunteers” putting together India’s largest startup event that year. I’d done my small bit building out the Program Guide, helping with the scheduling tetris and hosting a UX workshop for startups.

Now when Sharad or Avinash call, you can be sure of one thing: you’ll walk out of that conversation buzzing. The KGA meeting was one such chat. It was when I first heard about the “sketches” behind iSPIRT – an acronym for the Indian Software Product Industry Round Table. One of their big ideas was founding the entire iSPIRT as a platform anchored on volunteers’ energies and selfless service, as a platform that represented Indian startups. There in the middle of beer and coffee mugs I remember reams of paper on our table. These papers had ideas and boxes and arrows and circles. There was Industry. And government, and academia. We discussed a million questions:

is this a Think Tank? A Content Platform? An Enabler? Logistically, a Round Table? How do these pieces connect?

I offered to build on some ideas in early 2013. We made concepts and threw most of them away, in the true spirit of prototyping. After all iSPIRT was a startup too! It needed multiple experiments running!

iSPIRT_amit_pande

2013 started with much momentum for iSPIRT and Product Nation. The identities seamlessly blended into one visual identity and website. The product round tables continued to be a huge success. As iSPIRT picked up momentum, my own life took a few different turns. I left for Stanford Business School for the Sloan Fellows program and traded a corporate job and Bangalore life for a dorm room and back-to-school lifestyle in Palo Alto. I was with iSPIRT in spirit, and I saw it from 14000 KM away, taking shape as early stage startups do. The Product Roundtables. The Product Technology Ratings. InTech50. #PNCamp.

2014 of course was an even bigger year for iSPIRT. The engagement with the new government, the policy papers, and the acceleration of startup investment activity were palpable. Midway during my Stanford year, I had the opportunity to introduce iSPIRT to my GSB Professor and now friend Sharique Hasan, one of the best researchers out there in Organizational Analysis. Sharique like many others in the Valley had heard rumblings around Indian startups. When he finally met the iSPIRT team, it kick-started new initiatives within the M&A Connect program.

2015 promises to be even bigger. I hope to contribute more, volunteer more. But even as I imagine the largeness of things to come, I will never forget those sketches at KGA, that bright winter afternoon, and those ideas that seemed distant, like a dream you can almost touch.

Today when iSPIRT turns 2, I am reminded of the power of big ideas sketched on little napkins. I am reminded of that famous line:

you cannot stop an idea whose time has come.

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40th #PlayBookRT in NCR on “Break the Barriers of Selling” by Deepak Prakash

iSPIRT kicked off its first roundtable for 2015 on 17th January at the office of Eko India, Gurgaon. The PlaybookRT was led by Deepak Prakash, Former VP of Sales at Tally Solutions. He has led building the entire sales network bottoms up and was the #1 sales person at Tally. Under him, Tally evolved from direct selling to single-tier home grown network for dominance and further evolved into a two tier network to create availability supplementing with all possible marketing activities with money/without money to reach-out to every potential buyer of our product(s).

The theme of the PlayBook Roundtable was something that poses a challenge for all tech entrepreneurs – Sales. Sales is what riddles most of the IT Product company start-ups – each one to his riddle. The intriguing problem of sales combined with Deepak’s experience and expertise in this subject ensured we had a full house on cold Saturday morning.

2015-01-17 18.30.11Overview

There are roughly about 1.25 crore SMEs in India, and about 40 Lakh of them have computers and are ready for automation. This provides a huge opportunity for enterprise software providers. Most of tech entrepreneurs have built interesting products to address this large market, however sales has always been the Achilles’ heels. Deepak broadly outlined the following sales strategies to tackle this market.

Building an effective sales team

Understand the sales psyche

In order to build a successful sales team, it is imperative to understand the psyche of sales people. As tech entrepreneurs, we usually tend to apply the same yardstick for both technology folks and sales team. This approach is incorrect.

  • Engineers and techies can accept failures easily, take it up as a challenge and build upon it. If there is a defect or something is not working, they will try new approaches to solve it. But for a sales guy, who is in front of a customer alone, failure can more often than not challenge his pride and ego. It needs a lot of effort for a sales person to swallow this failure and start afresh next morning. Inorder to keep his motivation high, it is necessary that we celebrate small sales victories and communicate the role he is playing in the organization.
  • Developers and tech teams go by logic and enjoy data, analytics and whatsapp/SMS. While sales teams enjoy phone call over IM and there is more emotion in place. It is very easy for a sales person to become lost or feel small in a tech setup. Entrepreneurs need to work and ensure that both teams understand each other’s importance.

Hiring A Sales Team

In response to a question on what traits we should look for while hiring for a sales position, Deepak mentioned:

  • The person should be able to make the customer comfortable and make him speak about his problems and needs. Only if a sales person can understand the pain point of customer, can he suggest the right value proposition. Someone who talks a lot and does not let others talk is not necessarily a good sales person.
  • A good sales person will typically have his pipeline on tips of his fingertips. He should be able to spell this out at any time.
  • Someone who says I can sell anything and I don’t need to know the product is a person you want to avoid. Because as an entrepreneur you want him to focus on product demo, and confide in the fact that your product is good enough that sale will happen if the right message goes to the customer.

In response to comments that it is difficult to find sales people who are ambitious or motivated, Sumit Kapoor from Employwise mentioned that it is not entirely correct. It is for the leader to inspire their people. We are able to inspire and motivate tech people easily but not sales people.

However, before hiring a sales team, founders need to ensure that the product or startup is at a stage where someone else can do the sales for them. E.g. if the sales calls become repetitive, you know that our sales process and collateral are ready for delegation.

Sales Team Training and Measuring Success

Deepak also shared his approach of measuring the success of sales teams:

  • Do not measure the success of a sales person by the number of cheques he gets but by the number of demos he makes. As an entrepreneur, we need to believe that our product is good and so if the sales person focuses on a good demonstration, cheques will come and business will happen.
  • The target or objective for sales team should be to talk about your passion, your innovation and your pride.
  • We need to understand the dream of sales people. Rather than imposing our dream on them, if we start worrying about their dream, they will start worrying about yours.

The discussion then meandered into how to train and motivate your sales team. Everyone one chimed in with interesting thoughts and here are some of them:

  • The first sales call for a new joinee is like sending a child to school. As parents we have to hold their hands and be there at the background. In case we close sale, do not ever say that sales happened because of me. Motive the new member and make him feel that he was the one who closed the deal.
  • In technology, we attempt to solve problems that are under your control, while sales depend on other people (end user, decision maker and several stakeholders) and so we have to be patience and cut the sales team some slack.
  • The only fear that sales folks have on the road is that sale will not happen. With every rejection, they lose a bit of self esteem. They have to recover from this loss over the night and get ready for a new day and a new fight. And on top of it, we as organizations impose tools such as CRM they have to fill in. These CRMs do not talk back and understand their feeling. At Tally Deepak used to call his boys everyday at 7 pm and hear them out, giving them a chance to vent out their feelings.
  • In a tech company, usually a sales person is considered an outsider. But if the rest of the team starts seeing as a bread winner and if the sales person gets a feeling that the team depends on him, this will give him a high.
  • As entrepreneurs, we also need to understand the difference between entrepreneurs and employees. Employees live for a lifestyle while entrepreneurs live for building an organization. Employees will plan for vacation, holidays etc. and we need to appreciate this.
  • Normally we give just product training to sales teams but customers usually want to talk to someone who understands them. So domain knowledge becomes important.
  • We try to surround sales people with tools such as CRM citing terms such as productivity, efficiency etc. These terms more often than not are Greek to them and they feel you are trying to control them, while the feeling inside them is freedom. We have to explain them to them that the tool is for liberation so that they start enjoying it.

2015-01-17 15.29.56Digital vs. Feet on Street

The discussion also got into choosing between Digital and Foot on Street and whether startups should try both. Sumeet opined that it is best not to get into a situation where we do both.

  • A digital strategy takes time to build as you have to create content, online brand etc. that does not happen overnight.
  • You also need to ensure that your customers are comfortable going through the entire sales cycle digitally including making payments. If there is any trade deficit, digital may not work.
  • While building your digital content strategy, you also need to ensure whether your target SMEs are coming online to search for data. Do they have enough time or knowledge on how some of their problems will be solved.

While if you are going for feet on street, you need to remember to bring in processes that will help you scale. E.g. you have to build a sales engine through which if you run a new hire, he can go and sell your product.

Sometimes combining both digital and feet on street can mask problems in either of the approaches. E.g. if customers are not comfortable making payments online, we get our sales team to talk to them and make payments offline. This prevents us from addressing the real problem, which perhaps could be a trade deficit.

Building a Channels Strategy

The mantra of success was that they created their own channel network, this lead to a dedicated network which will take all the products Tally would have created or will create. They ensured that their channel has enough activity to do, opportunity to encash and inclusive work for their growth was charted.

Channel works well when people already know your brand. There are three major things that channels can help you with:

  • Sell your product
  • Act as fulfilment centres for your product
  • Extension of network for messaging

Your channel strategy also has to evolve in-time. When you want to create deeper reach and availability you need to recruit another set of partners, and in parallel ensure that the already present channel also gains from your expansion.

Channel strategy has changes considerably between pre MNC and post MNC. Earlier there was a lot of relationship building, but now most of the channel partners play around very low margins. Entrepreneurs need to be wary of which strategy they want to adopt here.

Bundling Your Products

Another strategy tried by several companies is to bundle the product with another product that sells more. FMCG industry has done it very successfully. A couple of things that need to be taken care when pursuing this path are:

  • The product you are bundling with should resonate with your own product. E.g. both products can complete each other
  • Are the sales people selling the original product understand your product or are able to explain to customers about your products.

Referrals

Referrals are another avenue that startups can explore, however before doing so you need to ensure that you are capable to handle all the leads that come in. Throwing a bigger net that you can manage can actually backfire for you.

Right Business Model

Several SaaS based business have a monthly model where they would call businessmen every month to pay. This may not work well with SMEs. Your customer’s business is not to buy software with you. He would rather want to concentrate on his business. Hence it may make more sense to opt for an annual model. The serious customers will anyways buy this. Exotel had a similar experience.

Reaching out to different stakeholders

Often in an B2B setup, the user, decision maker and paying authority are different. The discussion moved to what should be the order in which different stakeholders are reached out. Usually sales team members are hesitant to meet the owner as they face the possibility of heavy rejection. Also owners are not interested in features but in how the tool can either help them save money or make more. However, they do depend on feedback from the user or beneficiary. Hence the sales team should first reach out to the user or beneficiary and then the owner. Sometimes the owner also depends on inputs from a Subject Matter Expert, who could be an IT guy or engineer in his friend/family and sometimes others (e.g. CAs in case of Tally)

However, in case of channels the approach is opposite. You first reach out to the owner to get them buy your proposition. Following this you want to reach out to the sales team of the partner so that they are well educated and trained to sell or demo your product.

2015-01-17 15.30.21Monopolistic Market

Dinesh Agarwal from Busy Software shared insights on how they penetrated a market which was dominated by one large player – Tally. He banked on users and stakeholders in accounting software to identify niche features that were required by a segment but not offered by Tally. One of such feature was statuary compliance. They launched this feature at half the price and this helped them penetrate. They also carved out their channel strategy and ecosystem that helped to build a strong market base.

Going International

Deepak also touched upon some key considerations while eyeing international sales:

  • Your product will need to be adapted to the particular market you intend to tap into. It could be for example statuary compliance or local language support.
  • International markets can be expensive and hence you need to plan well
  • From a sales strategy, there will be broad similarities. E.g. international markets also have channels that work on the same motivations and contours.
  • You need to accept the fact that no one in a new market knows you or your product. So if you start from scratch.
  • The business problems and challenges are similar in different markets. They too have similar HR problems or business problems.
  • There also needs to be a culture adoption, especially the way you communicate or conduct your sales effort.
  • Before starting to build a channel in an international market, it usually makes sense that you acquire the first 10-20 customers yourself. This will help you understand the market better, ensure your product is ready and help you exploit the channel strategy much better.
  • Set clear expectations and objectives so that you know when to get out if things are not working.

Conclusion

One thing that stood clear from inputs of all participants was that there is no size that fits all. Different solutions and strategies yielded results for different teams and entrepreneurs. It is imperative not to wear someone else’s stripes. Pick up a strategy that is doable for you based on the types of person you are and situation you are in.

2015-01-17 13.36.59The high level of interest and engagement from all participants was evident as the session that planned for 3-4 hours got extended to beyond 7 hours. We finally concluded our first Roundtable for 2015 with a promise from Deepak that he will back with us in a couple of months.

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M&A Roundtable: Indian startups are breaking through

M&A activity in the Indian startup ecosystem has, for a long time, remained fairly nascent. Relatively small exits, averaging $10-15M, are commonplace in India. But things are changing, and with India being the third largest startup ecosystem in the world, Silicon Valley giants are beginning to pay more heed to the entrepreneurs and IP emerging from India.

On January 23, 2015, the iSPIRT M&A Connect Program hosted a Corp. Dev. and M&A Roundtable in Palo Alto. Attendees included corporate development, M&A and senior business unit folks from several key companies including Google, Yahoo, Twitter, Cisco, Intel, Box, LinkedIn, Intuit, etc. the event was coordinated by Sanat Rao (Partner, iSPIRT) and Roxna Irani (Associate, iSPIRT).

Neeraj Arora (VP, Corporate Development – Whatsapp) was the keynote speaker, talking about his experience with the Facebook acquisition, key learnings and challenges he faced while closing the $22B deal with the tech giant. He repeatedly highlighted the importance of trust that the Facebook team built out with the Whatsapp team over the course of multiple years before the acquisition that eventually led to an extremely seamless process. He also emphasized the element of trust that a startup must establish with a potential acquirer, because nothing is more appealing to an acquirer than a startup’s commitment to their specific relationship. (So there’s monogamy in M&A too!)

M&AConnectAfter an interactive session with Neeraj, we had a candid discussion with the Corporate Development attendees about their experiences acquiring Indian startups. The Yahoo and Twitter corp dev folks shared the key learnings from their recent M&As in India. Here are some takeaways for us in the Indian software product industry and for the next acquirers of Indian startups:

  • Visible benefits when the target is a US entity. Given legal complexities, the difference in time and effort to close a deal with a US acquirer can vary substantially based on the legal domicile of the company. Recurring piece of advice of new startups is to register as a Delaware C-Corp.
  • Acquisitions in India take time. Beyond geographic complexities, there are a couple of other reasons responsible. For one, communication can sometimes be ‘lost-in-translation’, so legal agreements with an Indian and a US counsel, with different laws and legal terminology, can often demand more fine-tuning than normal. Other times, key stakeholders may require more engagement and disclosure that demands resources. Whatever the reason, the general idea is to expect, and actively manage, longer cycles.
  • Acquirer confidence in the core leadership of a startup is crucial. Acquirers often expect a strong management team to hire equally strong employees, so they see high quality leadership as a validation of high quality team and product. This is especially true in the case of Indian startups.
  • Acquirers are looking for guidance on how to traverse the Indian ecosystem. India is a new market for a lot of overseas acquirers. A recurring request was for a “playbook” that would highlight the process and differences of doing an acquisition in India. This would include items as simple as list of top colleges in India to give acquirers context of pedigree, to employee attitude towards compensation (cash vs. equity breakdown), to examples of standardized termsheet terms and details.

M&A onnect - Roxna Irani
The iSPIRT M&A RoundTable started 2015 with a bang. The year will be a pivotal one for tech startups in India and the iSPIRT M&A Connect Program is excited to accelerate the pace of change. With all the “Virtual Mandates” received from the Silicon Valley companies, we will make carefully targeted introductions to the Business Exchange Associates. And with a higher quality of interactions, we hope to make much a larger impact to corporates and startups alike..

Exciting times ahead… stay tuned!

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Indian Regulator SEBI meets Software Product Startups.

How often has this happened? An entire team from Securities and Exchange Board of India (SEBI) with its Chairman Mr. U.K. Sinha meeting with Software Product startups in Bangalore to understand their challenges and also provide useful advice by participating in interactive sessions for more than 5 hours.

On 19th December, Mr. U.K. Sinha, Chairman of SEBI and his management team, heard the stories of 8 Indian software product startups. The idea was to understand both the Capital Markets Challenges (like raising capital from FIIs, listing for IPOs, and other book building challenges) as well new developing landscape of Consumer Market Challenges (like changing landscape of payments, pre-payments, recurring payments, etc.)

Mr. U.K. Sinha, was very forthcoming with his admission that new age companies require a completely new paradigm of evaluation and approvals. The new paradigm is needed not just for listing purposes, but also for market regulation and growth purposes. He assured full commitment from SEBI’s end to the budding entrepreneurs that SEBI is very keen, and will do everything within its capacity to help develop the markets keeping in mind INDIA’s growth needs.

More than 90 minutes of conversation and showcasing of New Software Product Startups from Bangalore took place. Mohandas Pai chaired the sessions on iSPIRT’s side. Not all elements of the sessions can be reproduced here; below are some of the key highlights.

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Home grown Startups share their Stories with SEBI

About 8 Indian Startups which started in INDIA, and which have global operations today, presented their stories not just from a valuation and growth standpoint, but from an emotional and proud-to-be an Indian startup viewpoint. To sum it up, almost every story was about Entrepreneurs who dared to dream something not only for them, but for INDIA, and today want the Indian System (Regulators, Government and Institutions) to reciprocate to their needs. They highlighted their list of issues which include the following:

  • 8 companies from various sectors (InMobi’s Manish Dugar, Ezetap’s Byas, Exotel’s Shiv Ku, HotelLogix’s Aditya, iViz’s Bikash, Paytm’s Pratyush, QuickHeal’s Rajesh and Deck.in‘s Sumanth) all presenting the journey of their startups.
  • A common hardship that resonated from most of them, was the unwarranted need of setting up subsidiaries or parent companies abroad, just to attract the right Investors and raise capital for growth.
  • Exemplary companies like InMobi, which raised initial money from Angel Investors today has a reach of about 1 billion people. Ezetap which raised initial money from AngelPrime, today has global operations, however it has its manufacturing, done entirely from Electronic city in Bangalore. Both urged that it should be made easy for Indian companies to raise money from Global Investors.
  • The existing regulations and guidelines make it very difficult for companies to get the right people (investors and advisors) on their Board.
  • Exotel, Hotelogix, Paytm and iViz, all stressed the need for modifying the SEBI/RBI guidelines on ESCROW, where Indian shareholders should have similar opportunities like Global Investors.
  • QuickHeal’s Rajesh highlighted how Kailash Katkar, a college drop-out had built one the most successful product companies out of INDIA over the past 25 years. Today QuickHeal is thinking of its IPO and needs to decide where to list.
  • Requirement for the Regulator to understand all stake-holders and their motivations, and provide for fast and timely intervention for Exits (IPO listings, etc.).
  • Need for new models to evaluate the new paradigm of Tech/Internet Product startups in INDIA.

At the end of this open session, Shekhar Kirani (iSPIRT Fellow; Accel) highlighted the fact that the Indian software product markets were entering an era of hyper growth. It is a new paradigm where not just startups, but all Institutional bodies within India, need to now collaborate and commit, for supporting each other’s need. In this context, he appreciated the interest shown by SEBI.

Policy Expert Team Interacts with SEBI

Following this open session, the visiting SEBI team met with iSPIRT’s “List in India” Policy Expert Team for an intense three hour closed door conversation about specific issues and their resolution. This iSPIRT Policy Expert Team is led by Sudhir Sethi of IDG and has Rajiv Khaitan (Khaitan & Co.), Sanjay Khan (Khaitan & Co.), R Natarajan (Helion), Rajesh Ghonasgi (Quick Heal CFO), Manish Dugar (InMobi CFO) and Harish HV (Grant Thornton) as its members. While specific details of this meeting are not available, Mohandas Pai told me that the session had been very productive.

Insights from SEBI

Mr. U.K Sinha, Chairman of SEBI, has an unbeatable track-record. In his past life, he was the chairman of UTI, and was instrumental in transforming UTI from a 1.2k crore institution to 12k crore institution. Many insights were shared by Mr. Sinha with all the participating Startup Entrepreneurs. Some of the key ones are:

  • Mr. Sinha and his team gracefully acknowledged that they were not just a Controller or Monitor of Capital issues, but they were equally keen to Develop Markets for businesses to thrive.
  • Further, Mr. Sinha highlighted the introduction of SME-ITP platform to facilitate capital raising by SMEs including start-ups which are in their early stages of growth and to provide for easier exit options for informed investors like angel investors, VCFs and PEs etc.
  • He also indicated that SEBI is exploring putting in place a framework for crowd-funding which will provide a much needed new mode of financing for start-ups and SME sector and increase flow of credit to SMEs and other users in the real economy. In this mode, SMEs and start-ups will be able to raise funds at a lower cost of capital without going through rigorous procedures.
  • It was indicated that SEBI is keen to facilitate capital raising by such companies to help them achieve their full potential.

2014-12-19 16.56.19
New Wind is Blowing

I saw a collaborative approach to problem solving that I haven’t seen before. iSPIRT’s policy approach is refreshing different from the traditional lobbying mindset that one sees in trade bodies. And SEBI is clearly open to listening and learning. It was amazing to see how SEBI as a regulator and iSPIRT as a think tank were both focused on the same national goal. I came away from the meeting with optimism and a spring in my step.

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Why “No other product like yours” is not cause for celebration. #PlaybookRT

On Saturday, December 6, 2014, founders, CEO’s and others from startups based in and around Mumbai met at the office of WebEngage. We were there for the iSPIRT PlaybookRT on Positioning and Messaging by Shankar Maruwada. Below are my notes and thoughts about the event…

Identifying and defining your customers

Shankar emphasized that the process of developing a positioning and messaging strategy starts with identifying and defining who our prospects or customers are. Finding out what they value and what their pain points are. In case of an existing customer base, one must evaluate what made a customer choose our product over other options.

It is important to remember that finding out who your customer is, is a lifetime process. And the results of such an exercise can keep changing over time.

The positioning and messaging objectives

Once customers have been identified and defined, we must start work on how we should define our product so it appeals to the customer base identified. Our positioning and messaging should be such that…

  • It gets the customer’s attention quickly
  • It is extremely easy for them to understand what your product is
  • Enables them to see without much effort, how the product would be useful to them

Using Analogies

Analogies can be a powerful method to quickly position your product in the mind of the prospect. A new idea is better understood when it is stated in the context of an already well known idea.

To take the example of some popular movies which were based on newish ideas at the time they were pitched…

  • The film “Aliens” originally was pitched as “Jaws on a Spaceship” and that image sold.
  • Similarly the 1994 movie Speed was pitched as “Die Hard on a bus”!

Some other helpful tips to help with your positioning process…

  • List out what questions you want your customers to ask? That will help you figure out how your positioning should be.
  • Don’t get trapped by words. Get the idea and thought first and then figure out how to articulate them.
  • When you say there is nobody like you, you are in trouble. No one wants to be the first person to be a fool.
  • People will position your product anyways. It is not optional. Your job is to guide them to the positioning you want.
  • To add credibility to any benefit that you choose to highlight, quantify that benefit. For e.g. Product X is so simple that employees complete their tasks in half the time
  • Your positioning statement and initial messaging should be as short as possible. Remember internal chatter in the prospect’s mind starts in about 30 seconds.
  • When there are multiple benefits, try to create a hierarchy of benefits.

One way to really know that you understand your customers is to see if you are able to predict their behavior. If you can successfully predict their questions or action, then you have a good job!

Curse of Knowledge

One of the most interesting things that Shankar spoke about was the Curse of Knowledge.

Wikipedia describes this as…

The curse of knowledge is a cognitive bias that leads better-informed parties to find it extremely difficult to think about problems from the perspective of lesser-informed parties. 

Anyone who has attempted a positioning and messaging exercise for their products has surely battled this. It requires us to…

  • See ourselves from the eyes of the prospect.
  • Understand how they perceive us currently. Understand what our prospect values.
  • Understand how our product must appear and what it must say so the prospect feels enough trust and sees enough value to go ahead and purchase.

The curse of knowledge is easily the biggest roadblock in this process. A better informed person is not always able to anticipate the judgement of a lesser informed person. Applying this to sales, it is said that a better informed sales person may actually be at a disadvantage as compared to a lesser informed agent pitching the same product. This is because the better informed agent may fail to ignore that knowledge which they posses but the prospect does not.

They could end up over estimating the prospect’s product knowledge or the value the prospect attaches to certain benefits or features.  A lesser informed sales agent would probably have a better idea of what the customer has understood. They would probably explore more to understand what the customer truly values.

It is important for the prospect to see our positioning and messaging as relevant to them. The curse of knowledge can fool us into believing our messaging is universally understood.

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Your working space inside another startup in Silicon Valley. #AtithiValley

A few decades back, when the technology boom in India was starting and our now ubiquitous technical talent was finding its footing, there remained a huge gulf between the India & the US in terms of exposure and application of new technologies. Which is why a lot of pioneers and early tech visionaries, wanting to be in on the action, decided to take the trip to the Valley itself.

That was a difficult time, as networks weren’t well established, access to companies and face-time with people was limited.

Now isn’t like then.

The rise of the Indian contingent in the Valley has meant that it is far more easier to travel to the US, and perhaps even start operating from there. Moreover, hungry and promising startups can travel to the Valley when they want to, absorb the culture, ask the questions they want answers for, network for funding and come back to get stuff done. This has been happening increasingly in the last few years and slowly positive results are coming out of it. Hobnobbing with product guys, resonating ideas with consumers, strategies for go-to-market, sales execution from professional who have done it many times over, accelerates the time to market.

We at iSPIRT have been thinking about this for some time now; the Valley has a lot to offer to the Indian ecosystem, and we need to use all that it has to offer.

iSPIRT is pleased to announce the Atithi Valley program, a first-of-its-kind initiative that will enable Indian startups to travel to the Valley and call another company’s space as your office for 2-3 months, using their facilities, bumping into creationists and maybe getting mentored. 10 companies have signed up for the program and we have access to around 20+ spaces in Silicon Valley, from San Francisco to San Jose.

If you are a startup and are planning to travel to the Valley in the next few months, please sign up using this form and get one of the iSPIRT Founder Product Circle donors or Fellows to recommend you. We will help you find a space in the Valley, opening up a new vista of knowledge and opportunity.

 

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Voice of Customer Digital platform for Indian SMEs – the Inquirly story #BootUpINDIA

inquirly-logoInquirly is an integrated Voice of Customer Digital platform, designed exclusively to help Indian SMEs listen to their customers, engage with them, act on specific requests, all of these, using a single integrated platform. Product Nation interviewed Anjan Choudhary, founder of Inquirly to understand about the start-up, its products and experiences working with Indian SME customers. Read on… 

Tell us about the circumstances which led to creation of Inquirly

Inquirly came into existence formally about a year ago. However, the thought process behind it started some time during 2012 – when I was working at Accenture. Inquirly was born primarily due to the culmination of my prior experience as an entrepreneur in the manufacturing sector, and later as an IT professional working in an MNC.

While at work for Accenture, in the US, I noticed that digital technologies were disrupting the economy in many different facets – bringing about new ways to perform marketing and sales activities, financial transactions etc for an enterprise. Immediately, it stuck to me that I could leverage these technological advances, and put it to use to serve the sales and marketing needs of many SMBs in developing markets. This led me to start small experiments to validate my thoughts and concepts. After a few iterations, and early customer validation, I quit my job to start Inquirly.

What is unique about your product – and how do you think it differentiates itself in the marketplace?

Inquirly is an Integrated Voice of the Customer Digital platform that enables companies to move beyond the limitations of traditional marketing, Sales, and customer service. Inquirly offers a holistic platform to listen to the customer, engage with the customer and act on real time and continuous actionable data thereby enabling businesses to get precise insights leading to proactive business decisions that result in greater efficiency, enhanced customer satisfaction & engagement and ultimately propelling continuous business growth.

For example, a restaurant owner, can monitor all online review comments from one screen with sentiment and Intent analytics, influence scores, by using this platform she can also understand the prospective customer preferences of dining, identify and target the prospective customers more effectively by offering discounts and other incentives, review whether these promotions worked effectively or not, and most importantly, get actionable feedback from customers – all of these in real time. Most of these could not have been done on a single platform earlier – and at affordable price points. This is how Inquirly differentiates itself from other point based solution providers.

Describe your experiences from the field during your first six months. What were the key learnings you obtained from these initial days of operation?

AnjanWe have had both good and bad experiences as we started to work full time on this product. The good part is that we have been continuously getting positive feedback on the features and utility of our product from our customers. Early adopters have given us constructive feedback on how things can be improved further – and we have been at it.

On the other end, one of the key things we misread during the early days was our assumption about the Indian market opportunity. During the controlled launch period, we learnt that the market penetration was not going to be at the pace we had initially assumed, and so, we had to rework on those projections a bit. We also learnt that India is not a Do It Yourself (DIY) market and so we had to start our services arm much early than we anticipated. Another important one was that recurring payments in SaaS based platform is not possible as per the Government guidelines and the market is not ready to make yearly/quarterly payments in advance.

As a result of the above experiences, we have learnt that we need to remain agile, identify the right ‘Market’/ buyer persona and target the same with perseverance, and to invest in inbound marketing while building the product.

How has internal operations at Inquirly evolved based on the above market place realities that you narrated?

Clearly, the learning we have had from the field has impacted our internal organization. On the sales front, due to our experiments in our early months, we now have a good understanding of the sweet spot for our product and also on its applicability in different domains. We now have been converging on this set, and have built up case studies and business scenarios, which is helping the sales team to close more deals.

Having a very strong, balanced development team is always one of the key assets to a start-up. We have ensured that our development team is staffed with the right mix of experienced folks and young talent – so that we are able to iterate on new features within weeks and release the updates to the market. On the financials front, we have been bootstrapped all this while, we are on target to break even by March 2015, post which, we expect to get more financial leverage to expand our business to other cities in India in the short-term. In the long-term, we do plan to go international.

Thank you for your insights! In closing, can I ask you to share three things that you deem as priority for product entrepreneurs targeting the Indian customers?

Sure. First and foremost, make sure that you converge on the target market which has the most burning need to use your product. This may take few iterations in the early days, but be at it and ensure that you have greater clarity on the sub-set of customer segment that you want to target to begin with. Second, ensure that you simplify user experience dramatically. The adoption rate of Indian customers, in my opinion, is directly dependent on how easily they can use your product. Last, perseverance is required when working with emerging market – since, given the nature of the market, and the background of customers, you need to continuously work with them to reassure the value that they will obtain, by using your product. This will mean that your sales cycle will be longer. Hence, plan for it in advance and execute accordingly. Good luck!

 

 

 

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8 Powerful Things I learned about “Positioning your Startup” at the iSPIRT #PlaybookRT

As a founder or technologist mired in the day-to-day tasks of product building, it’s easy to get drawn into thinking of your product as a collection of features. But do customers also see our products as a stack of features? Or do they see products as a sum of the solutions that they offer? How do we best translate our offerings into a simple and sticky pitch that piques our customers’ curiosity and gets them to purchase/sign-up?

To find a thinking toolkit to these type of questions, I attended the iSPIRT Round Table on Startup Positioning at the WebEngage  office in Mumbai this Saturday along with the founders and product leaders of 14 other unique startups.

2014-12-06 16.57.35Over six intellectually stimulating hours, all of us had our product pitches brutally critiqued by everybody else under the guiding presence of Shankar Maruwada, an ex-P&G marketing wiz and the man who got millions of Indians to sign-up for the Aadhar card.

Here are the Top 8 things I took away from the #PlaybookRT.

  1. First, make sure you are positioning to the right customer—A startup can have multiple “customers”. The customer who will purchase and implement your product may not be the same as the one who will use it. Which one of them do you pitch to? Example—should RippleHire (an employee referral hiring tool that uses gamification) position itself to a company’s Chief Recruitment Officer who will deploy the product in his company, or to the company’s employees who will be the actual end users critical to the product’s actual usage?
  2. Then, know your customers well—What 3-4 specific things do you know about your customer, which you can use to create a pitch? This resonated very well with me. Having interviewed a bunch of Instamojo’s customers in the past few days and quizzed them about the outcomes they were trying to achieve by using Instamojo, I had learned that “non tech-savviness” was a common characteristic among most of them. This insight suggested to me that Instamojo’s positioning should embed the fact that it requires “Zero IT Knowledge”.
  3. Find out the customer benefits that your product delivers and communicate them—Beware of confusing features with customer benefits! Features define the tasks that a product completes. Benefits capture the outcomes that customers achieve as a result of using the features.
  4. If your product provides multiple benefits, prioritise them in decreasing order of importance and then communicate just the one or two most essential ones in your positioning. Communicating too many benefits at the same time could make for a confusing message and take the focus away from your product’s superpowers.
  5. Beware of the “Curse of Knowledge”—As product leaders, we are prone to become so close to the body of knowledge surrounding the product and internalise so many assumptions that we forget what it is like being the user. Positioning the product correctly requires us to place ourselves outside the realm of features, technologies, implementations and industry terminology and speak in the language of customer’s problems and our solutions to them. Example—product leaders of Enterprise Resource Planning (ERP) software may forget that many in their target customer base may not even know what ERP stands for, though the same customers may still be facing the problems that ERP software aims to solve.
  6. Use the power of analogies—Often, a complex concept can be explained simply using the construct “We are the X of Y”. Example—“Foodpanda is the Uber of Food Delivery.” or “Wishberry is the Kickstarter of India”. While such a construct may not always fully convey the idea, it catches you the customer’s attention enough for you to then elaborate further on how your product’s benefits make the analogy valid.
  7. Use the power of stories—A powerful customer story can illustrate your product’s benefits and allow the target of your positioning to visualise herself in the story. Example— Apartmentadda helped an amnesiac senior citizen find his way home. His apartment complex’s security guard pinged all its residents on SMS about the lost gentleman using ApartmentAdda. Among those who received the SMS was the old man’s son, who promptly arranged for his pickup.”
  8. Use numbers for a strong impact—What numbers can you say about your product that will help your prospective customers visualise its impact on their lives? Numbers can be about the number of customers whose lives you have changed, the number of steps (hopefully very few) it takes to get started with your product, the number of transactions your product did in the last X hours, the number of hours of customer work your product will end up saving, etc.

Guest Post by Apoorv Pandit, Sr. Product Manager, Instamojo

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Tax challenges being faced by the(SPI)Software Product Industry and Budget Recommendations made by iSPIRT.

With the budget closing in on the industry there are hectic conversations to represent the Software Product Industry in the right manner in the Ministry of Finance. The tax issues both on the Indirect Tax and Direct Tax have been plaguing the Industry for a long time and this hangout addresses the things which need to be done very well. The Indepth Knowledge of  Bharat Goenka (Tally Solutions) and the  moderation done by Sumeet Kapur(Employwise) leads to an in-depth conversation on the Tax issues.

Bharat divides the two issues into, First, the Direct Tax about TDS the why and when it should be applied along with Industry perspective, the second issue was Indirect Tax – the confusion around excise and service tax relating to products and its definition and applicability of VAT .

It becomes important to introduce the Constitutional Framework under Indirect taxes which broadly talks about Manufacturing and Services being taxed by the centre and anything that is traded is taxed by state.

Confusion arises around “Service” and “Right to Service”. Whereas “service” is not tradable a “Right to Service” when sold is a tradable e.g. a Mobile phone service being provided by a Telco is a service where as when a vendor sells a recharge coupon he is selling “Right to Service” that actually will be provided by the said Telco.

Hence, under this concept of “Right to Service” tends to be tradable until the service is rendered and not after it is consumed, because the title to right to service is nor more existing after consumption. Service is therefore treated as tradable commodity thus qualifying for VAT in states and the Center charging service tax, this leads to invoicing for both VAT and Service tax on a software product.

What is needed is clarity on the issue of tradability of service as “goods” and “service delivery” as “service”.

GST will bring in changes but the taxes will be shared between states and center. GST it self may not fully solve the problem of duality of tax on software products. The problem of duality on VAT and service shall be sorted out only when there is clarity on “Right to Service” as a tradable commodity and “service” is achieved.

We as an Industry need to help Government formulate a distinction between “Service” and “Right to Service” as a tradable, so as to do away the duplicity of VAT and Service Tax so that service tax is charged only on part of service and VAT only on tradable value added portion if and when a service is traded further by channel partners of the service provider.

Direct Taxes (TDS)

Sumeet introduced an issue on TDS. Primarily a TDS made by payers to software company leaves less cash on the money collected. This is mainly for software product which sold leaves the product company with 10% less cash on the money collected.

Bharat mentioned that Software despite being a tradable product is the only product that is subject to TDS. This creates a bigger problem for the young companies and growing industry as early years do not allow you the sufficiency of profits.

We need to bring in front of Industry that no trading activity should attract TDS. Also that by doing away TDS the Government is allowing the profitability and business growth thereby allowing more business to happen and widening the tax base eventually.

Sumeet was of the view that, if software product companies are being subject to a TDS there should be Tax credits available on service tax so that the cash availability to businesses can be balanced.

Bharat added yes we can represent to the Government on this that either give me an input credit or refund TDS on day I file my return. Sumeet added that refund must be done even if there is a scrutiny.

Pramod from Nucleus Software added that in an event the question of Duplicity of VAT and service tax was raised to the Revenue Secretary, who showed his inability to do away with duplicity on tax as VAT is a state subject.

Conclusion

Many of the changes in law have come in past few decades and there was a lack in taking the cause to Government or lack of sufficient clarity in helping Government to clearly define distinction between Goods and Services and to separate out Right to Service being traded verses Services.

Bharat Concluded by saying, in the present efforts done to represent to government, we are looking at adequacy of clarity and this clarity is much needed even if the GST is coming to solve the issues and problem in this regard.

The detailed budget recommendations can be seen here.

With Inputs from Sudhir Singh, ExcelICT

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Nuts and Bolts of Marketing & selling SaaS products to US customers from India for First Timers

In innumerable brainstorming and “gyan” sessions with friends, mentors and experts, one of the most stressed focus area is getting product market fit as soon as possible and then follow it up with scaling sales.  I think most early to mid stage entrepreneurs are instinctively aware of this but struggling with “Hows”.  So when I saw this playbook promising precisely to explain how, I grabbed a spot. I wasn’t disappointed. Suresh Sambandam is very down to earth and spoke earnestly and in detail about different steps he took while selling the OrangeScape’s product KiSSFLOW. Attendees who themselves run early to mid-stage companies and Kishore Mandyam of Impel CRM chipped in with their stories and inputs. Here is the detailed enough capture of the same.

The relevancy of this session is greatest to Early and Mid-stage entrepreneurs going from $0-5K MRR to $50K MRR selling to US MSB. This session is NOT meant for discovery or product market fit but I have inserted the discussion at the end.

The blog is organised as below Product Market Fit / Pricing as step 0; Followed by Inbound Sales and Marketing and then finally Outbound Sales and discussion on tools.

2014-11-15 16.37.05Product Market Fit

The absolute first step (may be zeroth step) in Sales process is getting the product market fit. You know you have a Product Market Fit with a B2B Mid-Market SaaS product when unknown folks start buying (Inbound sales is picking up traction). Unfortunately in cases that were presented at the session, the discovery process of the product happened organically based on another product that they were building.

However the generic solution for early stage product discovery goes like this.

  • Create a landing page with a “notify when ready”.

  • Create a SEO/Adword campaign for getting early adopters. You need to be very clear about the product category and fine tune your Adwords to exactly match what product aspires to solve. There are usually two approaches to any product i.e Disruptive Innovator or Faster Better Cheaper. So Adwords need to be in line with these

  • Once people signup engage with them and partner with them to fine tune the product.

To put succinctly Bring-> Engage->Convert->Succeed; As you can clearly see from this model, “Marketing Comes Before Product” or as Suresh puts it bring the horse to the water.

Pricing and “Freemium v/s Free Trial”

So which model suits best for a SaaS product? Is there one preferable over another? Very subjective topic but the thumb rule seems to be for SMB / Mid-market SaaS Free Trial is a best method to go.

Models aside, what matters most to the conversion is the post-signup engagement and the price factor. Faster conversions are dependent on many factors but one of the key factors is pricing. If pricing is within the decision-making authority of the midlevel managers, it is easier to convert. The discretionary spending seems to be around about USD 5K. Keeping the price low per user and making minimum unit purchase of say 10 users per bundle works quite great.

Inbound Sales

WebSite – Suresh firmly believes that Website is a core asset for a B2B SaaS company and hence should not be outsourced. He advises to have a minimum team of Web Developer, Creative Designer and Automation Engineer.  This would help perpetual A/B testing in short cycles..

Couple of nifty tricks to make the whole experience frictionless is to have a one click signup. Visitor should be able to experience the main software within few seconds. The other participating companies in the round table have used various  techniques to authenticate emails like SMTP Ping, email pattern matching, etc.

It is also important to closely monitor the users interaction with the website, capture it and feed it back to the Engineers to close the gap and arguments between Sales/Marketing and Engineering. One of the recommended tools in this category is FullStory.

RajanSEO

Lot of interesting debates on this; discussion ranged from how get the right keywords for searches and what optimization works and how to track the metrics. Suresh again firmly believes in having a dedicated SEO guy and focus on defined key words. They manage about 28 keywords and track them very meticulously. Some thumb rules and objectives again are

  • Do it Slowly but Steady
  • Don’t alert Google
  • Build Backlinks (Naked and Anchor)
  • Improve Google Crawl Frequency

Adwords:

It is preferable to have one dedicated person with number crunching and finance background. This will help track the cost per signup for search ads

Content Generation:

While it is important to have this come from founders, it is very hard to find time for the founders. One technique employed by KiSSFLOW is to hire fresher from visual communication background who has a grammar nazi attitude and give a very specific target like 2 +2+2+1 per week (2 blogs published 2 interviews done, 2 assured interviews for next week and 1 research post). He also uses 10-80-10 formula for the content itself where beginning 10 and ending 10 percent are reviewed in detail by founders.  One of the other key points stressed was to have self ads in each of the content which leads to signup.

Outbound Sales

Contact DB

Obviously the most critical first step here is having a database of all the companies and the decision makers that you want to reach out. Linkedin Premium works best. This is how Suresh does it. He uses Linkedin DB to create a list of all target companies and then assigns the task of creating the contact details to an online consultant who was discovered on Elance. It usually works out to INR6-INR10 per contact. There are other dbs one can purchase directly from companies such as Data.com, Discover, rainking and slew of others.

Once contacts are obtained it is very important to use direct emails as opposed to using mailchimp, constantcontact, etc as most of them will not land in inbox. It also helps to be as personalized as possible.

Sales DNA

It is absolutely essential for the founder to set the tone of sales.  For US be ready to pull night shifts continuously.  Although it is the founders calling, it is good idea to assume the persona that appeals to US clients say Bob and position one as a sales manager. It is also important to make the sales hire to listen to the call handling to build on this.

Channels

Not all channels are suitable for SaaS and one needs to do some trial and error to figure out the best channels. The channels include Events, Road Shows, Reselling Partners and Referral/Affiliate partners, may work well but Orangescape has ignored them.

Metrics, Tracking, Tools

Meticulous tracking is critical and many tools are available to manage and measure the process. Some that are being used by the roundtable companies are listed below.

Metrics to track

Metrics to Track

Suresh SambandamTools

These are the various tools used by the KiSSFLOW team and other participant companies who attended the roundtable

tools

Conclusion

Very hard to summarize such a detailed session, but one parting thought stands out. Attention to details followed by automation and customization seems to be the way to go.

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Product Management Roundtable For Startups by iSPIRT In Pune. #PlaybookRT

After all the missed opportunities of being at a PlaybookRT by iSPIRT, I finally made it to Pune last weekend for the roundtable on Product Management. Amit Somani and Rahul Kulkarni conducted the session. While I can’t do justice to all that was discussed at the session, I am translating my notes from the Roundtable into this blog post. After sharing some of our product dev insights in my last post Learnings From Building A Consumer Facing Web Product, this was a good opportunity to become a sponge and soak in all that I could manage. 

As a startup founder who hasn’t previously worked in a product company, starting a product business is tough. And being a CEO with no technology background, doesn’t help the mix either. The challenges for building an internet product for me may be more than the average amongst the ones attending this Roundtable, but product management is still a tough beast. Understanding consumer needs, building a product around it, figuring the right metrics for your business, measuring it and iterating is puzzling for anyone, specially given the fact that we are always chasing a moving target.

2014-11-08 14.15.57To give you a taste of how things play out in the real world:

When we started PriceBaba back in 2012, mobile apps were a good to have, desktop traffic was bulk of Internet usage and little did i know that India is on the verge of such massive investments in online shopping. Over 2 years later, the story is very different. Mobile is huge (both web and apps), online shopping is real and consumer Internet in India and the investment landscape which was looking slow between 2012-2014 has picked up crazy momentum.

For a startup that is bootstrapped, at an accelerator or even seed funded stage, getting the product market fit, raising funds to survive, hiring good techies and dealing with an uncertain market which is changing fast is a daunting task. If you add to that the learning curve involved to make things successful, you would know why I appreciate this Product Management PlaybookRT by iSPIRT so much.

The Product Management #PlaybookRT

Amit and Rahul kicked off the session by helping us define our product vision (and separating it from the company vision and mission). We were asked to make a 30 sec pitch by each of us on our product vision along with two things that we would never do. Both Amit and Rahul played devils advocate and helped us think through what we are doing. Learning: A quick dipstick to check if your product vision is well defined, ask employee no 20! If they can define it well in your (founders) absence, then you have set your product culture right.

Stack rank your requirements. What is the single most important thing you? Rahul suggested us that things can’t move forward till we stack rank our priorities. We must know what is the most important thing that we do. A somewhat heated discussion was on how important the user interface of a product is for being successful. Should we fret about having the best UX out there or build a product that is very compelling, offers a better price than competition and delivers what is promises reliably? To cut short on what could be a day long debate, here are two independent bits I picked up from our facilitators. i) If you are offering something that no one else can, your consumer will also use a command prompt to get it. ii) Your Apps UX is much more important than what it was a few years back and it is getting more and more important by the day. But that may not be the lone factor in getting a winner out there. That said, don’t purposely try to build a bad UX 😉

The user experience is not just defined by what the user does on your mobile or web interface. It is every touchpoint that the consumer has with your brand / service. It is the whole packaging of what a user goes through. For a e-commerce site it would go down to the professionalism and courtesy of their delivery boys. Similarly, when taking a view of product, the challenge isn’t always about getting that killer UX designer to work on your mobile app. It is really defining what your product does and how.

Each of us got enough time to define our key metrics and find ways of measuring them. With my experience I can surely tell you that it is indeed true that which ever metric you track on a day to day basis, improves quite magically 🙂

Tips on collecting feedback & effective product management: 

  • Take feedback from your extreme users. Either the ones who are very naive and would ask very basic questions. Or from the extreme users who would want every pro feature out there
  • Group users by commonality. Set goals for users who perform well. So track a users life journey within your app, figure key milestones and set them as goals. Optimize for these goals. So if you know that a user who completes Level 1 of your game, is most likely to play till Level 4, try to optimize such that you acquire users who will complete Level 1

Apart from the evergreen Google Analytics which is great for averages, tools like Mixpanel, Kissmetrics and Wizrocket are great for digging into specifics. You may want to give them a spin. You may also want to check Dave McClures talk on Startup Metrics for Pirates. 

playbookRT

Hiring. The Big Deal. 

So the tired entrepreneur in you is thinking already, when can I hire someone to take some of my money and all my product problems? Well, well not so soon! Product Managers come in various flavours and to begin with, YOU are the PM. Hiring a lead product manager is tough and transition is not easy. You need folks who are curious, bring product insight, are analytics, can be strategic and can work with really smart engineers. This is an individual that blends great communication skill and simplicity. So where do you find such a mahapurush?

Amit suggested a good strategy of hiring young grads and train them to become good PMs in a year. They will love the opportunity at the start of their career and won’t burn a big hole in your pocket. That said, a dedicated product lead will take over the duties from the founder(s). This would ideally happen at a later stage for most of us attending the Roundtable. The three flavors of Product Managers are:

i) A Project Manager who will get your task list executed

ii) A product manager who will get the job done but won’t give a new direction to the part they are leading – the CEO holds the strings. Also example of Windows OS where changing one aspect as per will of a Product Manager won’t fly, it would need the to go hand in hand with the whole OS

iii) The Business Owner – Give this product manager your metrics and let him/her chase it down for you with full ownership

^cheat sheet: Google for questions asked to Product Managers at Google / Amazon / FB 🙂 

2014-11-08 14.22.30Best Practices For Product Development: 

i) The Amazon Approach – Write a press release before starting the product development. Also read this by Ian McAllister of Amazon:

ii) Before you launch the product, predict the no of users your new product / feature would have for the next week & month. Define the usage metrics

iii) Have extreme clarity in goals, let people make mistakes but own the job

iv) Questions to ask yourself – Is this world class? Can an engineer look this up and build it in 2 days? Why are you uniquely positioned to do that?

Also appreciate if someone else has users and learn as to why they have users for what they have built. You can learn a lot from that. Eg: Google & Apple learnt about good features that would eventually go into their OS by looking at some trivial but popular apps on their App Stores.

Books recommended by Amit and Rahul: 

  • The innovator’s dilemma by Clayton M. Christensen
  • Start with why by Simon Sinek (also the TED talk by Simon)
  • Profit from the Core: Growth Strategy in an Era of Turbulence by Chris Zook
  • Only the Paranoid Survive: How to Identify and Exploit the Crisis Points that Challenge Every Business by Andrew Grove

2014-11-08 16.26.16

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iSPIRT now Tracking the Size and Growth of the Indian B2B Software Products Industry through iSPIxB2B Index(Oct ’14 Edition)

iSPIX-b2bWe believe the discussion about India’s technology industry – whether in government circles, the media or in Silicon Valley – overlooks India’s B2B software product companies which sell globally as well as into India. Instead, there is a lot of discussion about IT Services companies and E-commerce players.

We would like to shine a spotlight on these Indian B2B software products companies through the India Software Products Industry Index – B2B (iSPIxB2B), which we are launching today. The index tracks the thirty most valuable B2B software product companies headquartered in India and companies headquartered elsewhere in the world where cofounders are in India right from the creation of the company onwards.

The data suggests that the B2B software product industry has been growing nicely outside of the spotlight – the enterprise value of the top 30 companies is $6.2 billion (₹37,500 crores) which is higher than we would have imagined before starting out on this effort.  The top 30 companies employ over 18,000 people.

iSPIx-B2BAnd the top thirty companies in alphabetical order are:

We have descriptions of the top thirty companies, aggregate statistics and methodology for computing the index in the report itself. We’ve pulled out a couple of the findings here:

–     For those companies started pre-2006 (50% of the list), they were generally bootstrapped to scale and then about 40% of these companies raised growth capital. These companies are mainly domiciled in India and many are verticalized, selling into banking, financial services, retail and travel.

–     For those companies started post-2006 (50% of the list), about 73% have got early-stage venture capital into them now – the majority by far are not bootstrapped. 50% are domiciled in the US or Singapore and many more are horizontally focused in areas such as CRM, collaboration and ad-tech.

We will publish an updated iSPIxB2B index every six months – please do send us names of companies you think should make this list and we will make sure to contact them. In the meantime, please share this document with your colleagues in the software industry and participate in the discussion around these findings in the comments section here.

Thanks to all the volunteers at iSPIRT who worked on this project as well as Professor Sharique Hasan of Stanford Graduate School of Busines, Stanford Univerity; Professor Rishi Krishnan of IIM-Indore; and Klaas Oskam of Signal Hill for providing input and guidance.

We will publish an updated iSPIxB2B index every six months – please do send us (at ispix(at)ispirt.in) names of companies you think should make this list and we will make sure to contact them.

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How to Structure Sales and Marketing in a SaaS Business

PlaybookRTThe discussions continued post-lunch in the Playbook Roundtable led by Girish Mathrubootham, CEO and founder of Freshdesk, organized at the Freshdesk office in Chennai. During the extended session, Girish outlined the sales and marketing structure in a SaaS business. While this may be only taken as a pointer to setting up the sales and marketing teams, each business owner needs to focus on the appropriate strategy that brings him the maximum number of customers. As explained in the last report on this roundtable, firming up the business model after iterations and adaptations is very important before a SaaS business would scale. Remember the product is the key. And when the celebrated investor Andreessen Horowitz featured in his blog Mark Cranney’s “If SaaS Products Sell Themselves, Why Do We Need Sales?” it kicked a lot of debate on why Cranney is right. Some strategies outlined by Girish might be of great help in not only positioning your product but also making sure that customers continue to use it after they buy it. The Q&A format continues.

How do you structure the sales function?

The sales function has two components: inbound sales and outbound sales. For inbound sales, the ability to identify good people to fill the position is absolutely essential. If they have capabilities of researching on the customer and can write personalized mails, that works better than lifeless common mailers. Further, the response rates increase in case of personalized mails although it might not convert into sales immediately. The inbound sales guys should be able to identify themselves with the customers and a “We” pitch infuses confidence into the customer’s mind. In all, inbound sales people should be able to make the customer feel special about interacting with the product and the organization behind it.

Outbound sales is a pure arithmetic in one sense. Read Predictable Revenue by Arnold Ross. If you invest x amount of money, you harvest an amount y (usually as multiples of x) as revenue. To be able to achieve this, you need to have a structure sales organization inside the team. It could be divided into market research team (which identifies potential target sectors and customers), sales development team (which continuously interacts with the customers to understand their requirements and explains to them how your product can address their needs), and an account executive team (which specifically oversees one or more specific customer accounts). This should be supported by the pre-sales team.

People are key to all the roles mentioned. It’s important for the CEO or the senior management to identify who is good at what and then placing them at the position they can perform best. If someone is capable of creating a good rapport with the customer, move that person to pre-sales. Some people show an inclination to solve problems. Put them in the support team.

A small hint about shifts. Keep the people in the same routine, which means keep them in the same shift they come in. Some people like night shift and if they want the night shift, keep them there. Rotating shifts might need to unnecessary resetting of biological clocks of the shift people that might show up as poor performance. Be wary of this.

Should you hire a salesperson in the US?

This question continues to create varied views in the minds of SaaS entrepreneurs who find the US market attractive for their product. The right answer is it depends.

If you are able to close the deal through online and telephone interactions, it’s good and some big deals might also happen. But it’s not a scalable model. A salesperson in the proximity of the customer at times becomes necessary to go after big-ticket size deals and close them. Customers feel confident about having a support person near them. It also involves cultural and mind-set issues and the customers become comfortable with the organization present in the same country as them. It would be better if you would hire a person after you are sure that big ticket size deals would happen. The salesperson should be capable of going after big deals and closing them. One note of caution: Make sure your sales person is working full-time for you and not moonlighting. What is the final word? Again, it depends. The best option is to hire a full-time sales person in the US for closing big-ticket deals. Beware of the cost of the sales guy and the difficulty of getting sales out of them. There have been bad experiences for some. Maybe learning about that helps and also get tips on how to hire the sales guy in the US. There is no one strategy that works and it’s largely your own learning curve. But some pointers from people who already have a sales team or a sales organization in the US helps.

Identifying the right sales people

Sales people are either hunters or farmers. Hunter sales people hunt for new customers and go after new domains aggressively. Farmers have the ability to nurture the existing customers. It’s important to identify a person’s skill and decide where they fit in the sales organization. Read Jason Lemkin’s interview on SaaStr.com.

Retargeting customers can be done through Google mail. Don’t overdo mass mailers. You run the risk of Google labelling you a spammer. Write personalized mails.

Remember, a closure of sales that results in a recurring revenue (for example, through subscriptions) converts into a higher revenue over a period of time, without the need to add new customers for an increase in the revenue.

What is the role of marketing in a SaaS business?

The marketing team should generate qualified leads, which the sales function also should do. Both of this converts to good sales.

Once you identify your target, make sure you gather a valid e-mail address and a valid phone number. There are ways to do it. Learn them.

Social media helps a great deal in lead generation. Customer acquisition happens. If you are looking at competitor social media feeds, you at times spot an unhappy customer, who wants a specific feature or has a need, which your product fulfills. Instant connectivity on Twitter facilitates this connect. Trap them and convert them into your customer.

A step-wise filter for tracking leads works wonders. Right from a prospective customer approaching your product through your website, keep track of the customer to see what is he interested in the product. If he shows more than a mere curiosity interest, track him to see the various levels at which he interacts with the product. Sometimes, customer might return after sometime. Help the customer in whatever ways possible to convert him into a buyer of your product.

How free should be the free trial?

Various strategies work. The free-trial period varies between 6 and 11 days. Look for an optimum number. Any amount of free trials is not going to hurt your business. Think of a longer horizon of the free trial. Say 30 days. This is a feel-good or hygienic factor that keeps the goodwill of your business with the customer. Provide support during free trial and try to educate the customer in what he doesn’t know. You will earn respect and convert a doubter into a customer.

Be disciplined to knock off “parasitic” customers. Keep track of customers on free trial nearing their free trial period. If your plan is to close their account, send a polite mail announcing that their account will be inactive after x amount of days. Make it as if it’s your company’s policy to delete accounts that are dormant for a period of time. Sometimes surprises spring up. The customer might sign up. Periodically getting rid of customers who don’t bring any value to your business is a good idea.

The sales strategy and expanding into new geographies

If you want to expand into a new geography, do your homework thoroughly. Study the terrain in depth before setting your foot in. You must know where you are getting in and what segments you are targeting. Understanding the culture and business practices in that geography works immensely. For example, Australians want you to call them, whereas the English wouldn’t encourage that.

Acquiring a big customer at the beginning is thrilling. But weigh your options clearly before signing on the dotted line. If your sales and support would not be able to cater to the needs of the large enterprise customer, you are better off saying “no” rather than change your business model and focus your energies on one customer. You may not be able to scale instantly on demand. Never significantly or drastically alter your business model for one customer or for one big breakthrough. It would eventually hurt.

Seal the lower end. But the lower end is always going to be cannabalized. Beware of competition and remember you can’t be cheaper than free.

Onboarding the customer

Normally, there is a problem of customers falling off after, say, a couple of months. So it is better to have a customer onboarding team to track sign-up. Live tutorials can handhold the customer for the initial period of using the product. Videos are helpful for non-tech customers.

Don’t disturb the core tech team for small technical glitches. Customer Action Response Team (CART), which fixes small bugs, is a great strategy. Focus on fulfilling customer expectations. Remember, when you solve a customer problem, you earn a happy customer.

To take a cue from Jeff Bezos, hire people who are not able to say “no” in customer development and hire people who say “no” in business development. Empathy is a great trait. Empathize with the customer and their problems and see how best you can solve them.

It’s always best to “farm” the first top 100 customers or key customers who bring 80% of your business. Remember, 20% of the customers bring 80% of your revenue. Focus on them.

With everyone in the room taking away valuable lessons with them, the roundtable wound up on a happy note.

 

 

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Launching RSPCT(quarterly event brought to you by iSPIRT & Jaaga) for the next generation of software developers

We are looking for Bangalore based founders and senior developers interested in getting to know the next generation of software developers coming up in the Bangalore tech scene now. RSPCT is a quarterly event brought to you by iSPIRT & Jaaga. We ask people to come to the events regularly (every 3 months) so you can get to know the individuals over time. We will be recognizing upcoming software developers by the public artifacts of good code they generate on the internet. These include certificates and badges from online computer science courses like CodeAcademy and EdX. We also recognize people’s rankings in online code competitions like HackerRank and CodeWars. Lastly we recognize open source contributions people make.

RSPCT

We invite you to speak briefly about your startup and why you would be good people to work with. More importantly we invite you to talk with young people at the event. Share your experience and suggestions with them. By establishing an ongoing connection advancing young developers it will be easier to recognize when it would be good to work together.

The future of the Bangalore tech scene is with the young people who are just learning to write software now. This is an opportunity for the more senior members of this scene to engage with them.

Apply to come as a Startup Founder / Senior Developer

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Global Lean Sales: The power for Demos

Playbook RoundtableOn Oct 18th iSPIRT organized a #PlaybookRT in Mumbai and the topic of discussion was Global Lean Sales. Pallav Nadhani founder of FusionCharts came down for the RT and shared a lot of useful information about how they do things at Fusion Charts. Most of the information from the RT has been covered in Rushab Mehta’s excellent blog post about the RT. I am just adding to that post…

Pallav showed us the demos that Fusion Charts built for their products and I wanted to share a few thoughts about what I learnt from that…

When selling online using a low touch sales model, the web site must replace the sales person at least in the initial phase of the sales cycle. And that is a very difficult job to pull of.

You need to anticipate every piece of information that the prospect may be interested in and make that easy to find. Your web site must then convince the prospect that your product is the right solution to the problem they are seeking to solve. Or convince the prospect that your product will enhance their business and give them a competitive edge.

But the web site must still be simple and clutter free. Putting pages of text explaining everything is of little help because the prospect will rarely spend so much time reading. So what do you do?

Almost everyone today will put up a product tour/demo to try and solve the problem. But a one size fits all demo has its limitation. Not everyone can see a general purpose demo and connect the features to their business requirements, without help from a sales person.  What can work much better are industry specific demos so prospects see how your product can be used in their industry (or a closely related industry).

Seeing the product in the context of one’s usage scenario can make it much easier to understand. Also instead of throwing all functionality at the prospect, only specific features can be showed in a usage specific demo.

FusionCharts does an amazing job of this. Their products enable data visualization and on their web site they have built a comprehensive section with dashboards to showcase the different capabilities of their products.  This includes a Gym Dashboard which demonstrates how membership based businesses can analyze their membership via cohort analysis and a really cool Music Player which showcases the performance of their product.

Looking at these dashboards it is clear that a lot of thinking and effort has gone in to them. It is surely not a trivial exercise and would require a dedicated person/team to pull off. But I think the effort would pay dividends in prospects understanding the product and encouraging low touch sales.

It has inspired us to try and do the same for our product SOHODOX.

Contributed by Shiraz Ahmed, Founder and CEO – ITAZ Technologies