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Enterprise Sales, Product Market Fit and Partnerships: Learning from the 23rd iSPIRT Round Table

Vivek from iCreate facilitated yet another juicy round table with lessons learnt ‘from the trenches’. While this article provides a distilled summary, it cannot do justice to in-person learning.  I strongly encourage you to attend the next iSPIRT round table.

Vivek started off by saying that there is no silver bullet.  Every product exists in its specific market conditions. Different things work for different products in different domains.  Nevertheless, there are certain fundamental themes that are commonly applicable.

The fundamental problem typically during the early days of a startup is lack of clarity of what are we solving and for whom (in other words – “Product-Market fit”).  Articulating this clearly is the first thing a startup needs to get right. 

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Spend some time answering the two questions below and ensure that all of your team is on the same page. Otherwise, it will be like the classic story of six blind men describing an elephant in completely different ways.

WHO AM I?

I am better than ____ (existing way of solving the problem)

For ________ (what problem)

Because _____ (differentiation)

As a result of ____ (your secret sauce)

Answer this for your product.  This manifests in your strategy, marketing communications etc.

WHY BUY ME?

Create a sentence with 10-15 words.  I am better than X because of Y and solving the problem of Z. 

Articulate this clearly and crisply. Otherwise, you are confused and it is also confusing to your customers.

Without clarity, you knock on a lot of doors and have lots of meetings, but with no results.  This can be very frustrating.

Domain Knowledge

It is very important that you have a very good understanding of the domain in which you are playing.  Depth of problem understanding is a must.

Do you know who the buyer really is? It is not enough to say company C is the customer. Who exactly in the company is your customer? Why should the user spend time to understand your product? Why should the user talk to you? What is his/her role? What are their motivations and fears?  What is their procurement process? Are you sure you qualify to pass those gates?

You need to have differentiation in your product with respect to your competition. It can be things like premium domain knowledge, completeness of the solution, cheaper pricing etc.  You should be clear about your USP (Unique Selling Proposition) and articulate it to your team and prospective customers.  The differentiation should be outcome-based and not based on things like technology stack.

People pay a premium for completeness. Plus it is easier to understand. And we can show the value to the user. E.g. architecturally, well designed modules are all fine, but from the customer point of view, he needs to see a complete use case coverage.

There is a popular Hindi saying “Jo dikha hain, wo bikta hain” (meaning “only what can be seen can be sold”).  It is tougher to convince with words.  Ensure you can clearly demonstrate the value of your product in action.

Pay close attention to your problem space and understand the dynamics. For example, in banking domain, the customers are married to existing platforms such as SAP, Oracle etc. So when you make technology choices, ensure that they work with the incumbent platforms.

Product Market Fit

Product market fit is critical.  Have a plan to get to product market fit as fast as possible.  Danger is you might run out of money, so get to product market fit fast.  iCreate was providing services and used these revenues to fund their product development. This way they had a longer runway to get to product market fit.

If you need to educate the value of your product, then there is a segmentation mismatch. Better to find a market place where they see the value clearly and it is more about demonstrating your value. If you have to explain why they should use your product, then product market fit is not there.

In your universe of market place, there will be big clients, small clients and medium clients with different attributes. Do not try to solve the problem for everyone. Pick your initial target segment as narrow as possible and play there. Pick a demographic where the user sees the value immediately and get them to start adopting. You can later expand to other segments when you see success. 

Qualify your market segment and leads. If they don’t have the problem, don’t spend time with them. You will see a glimmer of hope everywhere, but you are not going anywhere.   This will give you a false sense of accomplishment and is a dangerous situation to be in.

Having a vertical offering works better than a horizontal offering (i.e. applicable to everyone in the world).  Having a generic mother of all products means multiple stakeholders need to be convinced and the message also gets diluted.  It is better to choose a specific problem and completely solve it.  You can sell faster and also sell for more and get customers faster.  For example, iCreate had a generic solution which took 9-12 months to close the deal. With a single point solution, the time reduced to 3-4 months.

As a startup, you want to do several different things, but you don’t have resources.  You need to make the hard call and pick the 1 or 2 things you want to pursue.  Platform to solve N problems takes 2 or 3 times more time than solving 1 problem.  An amorphous offering is more dangerous and takes more time.

Another example that was shared was of a language translation product. They struggled to find market fit for their generic language translation services.  Then they verticalized it to retail segment where their product translated customer messages to native language and vice versa.  They were able to then go and penetrate this market segment.

As a startup, it is challenging to verticalize a horizontal offering due to resource constraints and the temptation to have a large market size, but this needs to be done.

Finding the first customer willing to use the product is a big challenge.  Be prepared for a long grind, and it can be a very frustrating experience.  Sometimes it can take a long time to get the product market fit (several months).  However, you should keep an eye on whether you are making progress or the product is not viable as a business.  You need to introspect if you are getting product-mismatch feedback.  Set clear goals and metrics. Don’t go by sentiments.  You have to be dispassionate.  Come up with some objective metric such as “The way for me to validate X is Y”.

If founders can’t sell, nobody else can sell. Look at the offering instead of finding a sales guy.

Every company needs one or two key inflection events change the trajectory completely. You also need some luck to get your first break.  Try to get top marquee client vs. a small client.  Marquee client also helps in marketing and validation and others will have lesser resistance to trying your product.

Product Merit is a must. In addition, try to show up where your customers hang out e.g. have stalls in conferences.

The next big challenge is getting the first paid customer. Then, you need to get your first referencable customer. 

You need to inculcate champions among your existing customers.  They will also tell their peers. This is critical during early days. Investors and prospective customers want to talk to existing customers.

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Creating a Sales Team

Look for partners or non-founding sales ONLY after getting product market fit and messaging right.  Till then, the founders should be the sales team. In iCreate, pre-investor stage sales team was zero.

Initial sales guys that you hire should be comfortable with the ambiguity of startups. 

Hire folks who can put ‘skin in the game’, aligning with wealth creation (e.g. ESOP) or a percentage of revenue.  Incentives also work – for example, “If you get $X revenue in Y months, you will get a car”.  Make the incentives outcome based and not effort based

In India, typically R&D budget is much more than the sales budget, but as you get traction investment in sales should increase.  One rule of thumb is to have 60:40 (engineering to sales) during growth stage. In US, mature companies have R&D costs around 15% of revenue and 50% of revenue is invested in Sales.

If the sales team is sub-optimal, firing early is better. You might make mistakes, but it is liberating when you fire a misfit as you can focus on important things better.  

Without raising money, growth can be slower.  If you raise money, growth is much faster.  Raising money for growing is a very good idea.

Partnerships (Distribution and SI)

First, have a story to sell. You put in initial effort to get initial customers in your target geographies. Then attract partners using these success stories.

We discussed two kinds of partnerships.

  1. Distributor – who just resells your product.
  2. System Integrator (SI) – who resells your product along with implementation or other services.

In every market, nuances are different e.g. private vs. public banks, different geographies etc. You need to figure out which kind of partnership is suitable to your product.

In mature markets like US or Hong Kong, you can sell direct and may not partners.  US is a great place to do business, as you get quick and clear feedback – positive or negative.  If they see value, they will buy. However, the sales cost in US is expensive.

In emerging markets, people want in person meetings and they do not say yes or no immediately. This can lead to mixed signals and longer sales cycle.

In geographies like Africa you might have to work with local partners. Your direct sales may not work. In general, East Africa and West Africa need distribution partner to set up meetings. Then your sales guy has to do the work.  Look at sector focused players e.g. computer warehouse in Nigeria, Simba in Kenya.  

Middle East and Africa are brand conscious – they don’t want to go with small startups.

In mature organizations, SI plays a major role and has a lot of influence on decisions.  Evangelize both with SI and clients. Once SI sees a win for your product, they will want to replicate that in similar contexts.

2013-11-23 15.26.17Be generous with commissions to your partners.  Once they see the money, they’ll show more seriousness.  See if your partner can make commitments to gauge their seriousness.  The commitment is not necessarily in money terms only. For example, ask if the partner is willing to send their employee for training on your product to your location.

It was observed that strategic discussions with SIs not as fruitful as tactical ones.  If there is an immediate opportunity, SI and you can have a meaningful tactical discussion.  Strategic level discussions might give you a good feeling, but not much might come out of it.

Channel partners need to see a clear way of how and how much money they can make. Find a channel partner who already has a user base of stakeholders of your interest.  To find out, look at other players in your space and which partners they are using.

Remember that your product is just an additional product for your channel partner.

Partners want to look at value addition, not just cost or feature arbitrage.  Partners compare your deal with existing big names to see if they get to benefit more by pitching your product.  

Partners need to be given all intelligence on a platter. They don’t want to spend on learning or figuring out. They don’t want you to experiment at their cost.

Some participants were worried that brands from India might have to first fight the battle of perception of being an India based company. But feedback was that it might be an issue in the beginning, but once you get traction and the product has merit, this problem is not insurmountable.

Government tenders is a complicated process.  You need to be proactive about positioning your product even before tender process. 

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Product Positioning

There are different stakeholders in a B2B context – could be the CEO, IT Manager, or VP of a business unit.  All of them are looking at different parts of the problem (one might be looking at cost savings, one might be looking at value delivered by the product and another might be looking at maintenance costs).   Create your message for each stakeholder.

For your product positioning, consider the following:

  1. For the points of your differentiation, reinforce in your messaging.
  2. For points of parity with competition, highlight them.
  3. And for points of despair, mitigate or downplay them.

From your client’s point of view (particularly in large enterprise context) “he will never get fired for hiring a well-known brand. It will be risky for him to try a startup’s product”. Reduce the risk for your client and also demonstrate differentiated value of your product.

Proof of Concept

Instead of free proof-of-concept (POC), ask for conditional order.  This shows commitment and also the buying process will start early. In B2B context, the process can be quite long.  If the POC is not successful, the order can be cancelled.  If you can get a paid POC, that is the best.   Free POC can be a waste of time if the person driving the pilot does not have buying authority.

Advisors

It is good to have an advisory committee of domain experts. This is good for validation. You can never be an expert in every area, so have advisers.  Typically, you meet them once a month or once a quarter.

There are three common models for compensating advisers:

  1. Free.  They like your passion and are willing to give you advice from their experience.  But this can be good only for some time. Otherwise, you will start feel guilty about taking their time for free.
  2. Stock options.  This is better as they will benefit when you benefit.
  3. Payment for their time. This is the standard consulting by the hour model.

Conclusion

While there is no silver bullet that works in every scenario, there are certain fundamental aspects that are common. 

Unfortunately, a lot of learning is experiential.  And it will take time. You’ll do wrong things but when you navigate, you can course correct earlier by having the knowledge from those who have tread this path before you.

Please share your thoughts in the comments section below.

Tweetable tweets

The first problem a startup must solve is product-market fit.  Everything else comes later. Tweet this.

It is very important that you have a very good understanding of the domain in which you are playing. Tweet this.

People pay a premium for completeness. Better to solve one problem completely than N problems partially.Tweet this.

Jo dikha hain, wo bikta hain (“only what can be seen can be sold”).  Tweet this.

If you need to educate the value of your product, then there is a segmentation mismatch. Better to find a market place where they see the value clearly. Tweet this.

If founders can’t sell, nobody else can sell. Look at the offering instead of finding a sales guy. Tweet this.

Tactical discussions with System Integrators are more fruitful than strategic ones. Tweet this.

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Design and its New Role in Innovation – A Round Table led by Eskild Hansen (Nov 26th, New Delhi)

DesignRoundTable with Eskild Hansen in New Delhi

Eskild Hansen will lead a discussion with prominent design thinker in the NCR on ‘Design and its New Role in Innovation.’

Eskild Hansen is one of the most talented Danish Designers on the Scandinavian landscape. Just turned 40, he has already been in leaderships positions at Cisco and Coloplast among others after having worked with other leading global design firms. At CISCO Eskild was responsible for establishing their first European Design Centre in Copenhagen and during this period helped bring a breathe of fresh air to the previously ‘boring and bulky’ Wireless Routers. He even won a Red dot in 2011 for one of his designs. You can read more about his work at www.eskildhasen.com.

Eskild is also a part of the Danish government strategic think tank that is developing and strategizing the ‘Danish Design Society.’ Invest in Denmark, a part of the Ministry of Foreign Affairs is bringing him to India on their 2nd Design Tour between 25th and 30th of November, 2013 and are offering the members of iSpirit and opportunity to engage with Eskild on common areas of interest. A new development has been the opening of a Danish Innovation Centre in New Delhi and Bangalore (www.icdk.um.dk).

Eskild is also very excited and eager to work with Indian companies for his private design consulting company.

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Everything is an experiment

A few days back, Sameer, Avinash and I chatted about my learnings from doing the Product Nation Playbook Roundtables as part of iSPIRT. If you’re curious what they are, here’s how iSPIRT describes this program.

We convert conversations into playbooks for product entrepreneurs. Product companies need a different mindset than IT services businesses. They need to anticipate customer needs rather than just react to them. They need to brand themselves in very different ways and create IP that will disrupt the marketplace. They need deep technologists rather than fungible engineers. And so on. pn.ispirt.in will be the platform for enabling crucial conversations around these issues amongst practitioners. It will use an evidence based methodology to shine light on successful playbooks.

From iSpirt website.

I believe building products is a continuous and highly impactful experiment that one can do. More so in today’s digital day and age. Here’s a short video put together by Sameer that captures my thoughts.

Sridhar Ranganathan(CrediBase) sharing his views on “Building a Product is Experiment” from ProductNation on Vimeo.

The key aspect of every experiment is that there’s definitely an OUTCOME! Whether that is good or bad, is something left to the hypothesis one frames, before the experiment.

Meanwhile, a bunch of folks who’re very interested in seeing the product ecosystem evolve in India, have come together to create #PNCamp, a 2-Day Boot Camp for product entrepreneurs. You can learn more about it here, and if you’re a product entrepreneur, I’ll strongly recommend getting an invite for this – you’ll learn a bunch from it. Even this is an experiment, to learn from how to evolve the ecosystem. Do you agree with me? Share your thoughts in the comments section.

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22nd #PlaybookRT – Solving a customer’s problem in a way your competitor is not doing, is the most memorable thing for your customer or partner.

The Pune Round Table on Lean Sales (26 Oct 2013) could not have had product leaders with personalities as different as Kailash Katkar @QuickHeal and Pallav Nadhani @FusionCharts. In this difference lay the magic. The magic at this Round Table was in full force. Thank you Kailash for hosting us all.

Round Tables are not about story telling. It’s about getting to know specific challenges of the group and correlating that with real experiences of other folks, especially the leaders who have experienced similar problems first hand. However, this Round Table would not be complete without some inspiration from the growth trajectory of Quickheal and Fusioncharts.

Entrepreneurial Discoveries:

Kailash Katkar, QuickHeal:

Kailash started off as a calculator repair engineer, and later was the only one in Pune who could fix broken ledger posting machines. The seeds of Quickheal were sown when they gave away virus prevention software for free. For him, the approach of always being close to the customer’s problem led to one solution (product) after another. Kailash was never a sales guy and when traditional channels refused to carry his ‘Indian’ product, he offered it to computer repair shops and the rest of his distribution story is history.

He realized that even an STD call to Pune was a large enough friction for channel partners to call them at Pune. Meeting with customers and partners helped establish local sales offices, a centralized helpdesk call center, even local feet on the street for support and much more.

Lesson#1: he always pushed his product as a service (we will clean it for you) and demonstrated value, rather than trying to push a box.

Lesson #2: always remained close to the customer, designed service organization around what customers wanted. Today, commands a price edge over security products from MNCs, and now selling in 50 countries.

Lesson #3: solving a customer’s problem in a way your competitor is not doing, is the most memorable thing for your customer or partner

Pallav Nadhani, Fusion Charts:

Pallav’s journey as told was equally mesmerizing. You had to see how starkly different his approach was from that of Kailash. He went for low touch sales, mass marketing, and the direct online route. This worked because his target was an educated customer and they used content marketing to the hilt.

Fusioncharts moved from a developer focus to a corporate IT department focus. This is the typical customer discovery process that any young startup goes through. Theirs is a classic tale of using LinkedIn, online forums, data visualization experts etc to talk about them and promote the brand.

So fierecely were they branding driven that they even changed the name of the product when doing a new major version. The Obama administration and many such examples did not just help them, they used it to their advantage, and relentlessly.

Fusioncharts started giving away source code to build trust, and even contributed to open source. Yet they never played the ‘cheaper product’ game and even commanded price premiums. Of course, to do this you have to position the value of things like source code, support etc and do the ugly duckling design. More importantly, you need to keep experimenting with price to find the sweet spot.

Kailash & PallavLesson #1: Pricing is a competitive weapon. Higher price is not a disadvantage and don’t let sales people tell you that. (Compare with QuickHeal, today sells some versions at a higher price than MNC products).

Lesson #2: Consciously went after higher value customers (corporate IT) who could be relied upon for assured recurring revenue.

Lesson #3: If you price well you can share decent margins and build a good product. Use different prices for different markets if the situation demands, and always try to sell a customer the highest possible version they may need. There’s always scope to reduce the price paid by offering lesser.

Common threads:

Sell to retail or Enterprise:

  • Start selling to retail customers, gain credibility and then move to Enterprise.
  • Enterprise customers would have less churn and provide opportunities to cross-sell other products as well as to other teams in the same enterprise.
  • Many retail customers / channels eventually move to enterprise so you can sow the seeds for larger deals even when you work the retail market.
  • Create several SKUs, the idea being to let the customer find the price level / functionality level that works for them (I’m not paying extra for something I don’t need).
  • Create sales teams for each type of customer (Fusioncharts – for selling to Enterprise, selling to Developer. Similarly at Quickheal, separate teams sell to Enterprise, Retail and Online). This helps the team align to the sales process for that market and talk the language effectively. Quickheal has separate teams for renewals.
  • Created a sales bible (Fusioncharts) which was the rule book for all sales folks. This helped in establishing a credible sales process and limiting discounts to the extent allowed by company policy.

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Branding and PR:

  • Always do your own PR. Keep it so simple that the common person (your mother?) can understand.
  • Your PR should either inspire people or make them angry (agitatated?). It’s no use otherwise.
  • Build relationships with the press, constantly pitch to them and help them with information in general. Ask them what they’re working on and if you can help. They’ll be happy to get any help and will remember when you need them.

 

Sales and Marketing:

  • Use automation tool for customer communication (Infusionsoft / Marketo / Salesforce)
  • Smaller channel partners are preferred (Quickheal) as they have personal relationships and quick on payments. Large partners usually try to dictate terms and tardy on payments. Fusioncharts has used a similar strategy of tying up with smaller channel partners in overseas countries.
  • Maintaining relationships with channel partners is extremely important as they carry a high emotional quotient. Wish them on the festivals which are important in their country. Talk to them, meet them.
  • If necessary, tweak your product or do something special for that market. This generates huge buy-in from the channel partner as they see your commitment.

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Among other things, the specific issues got discussed around:

  • Closure strategies
  • Market awareness
  • New geographies
  • Building / ramping sales team
  • India as a market
  • Funnel management
  • DIY or DIFM
  • Customer Engagement
  • Influencer marketing
  • Building your Service Organisation
  • Leveraging customers
  • Positioning

 

Each of the above is probably a session in itself and the experience sharing was the easiest way to get insights into how these are situations and not problems.

Both Fusioncharts and Quickheal are hugely successful in their own areas, even though each have completely different markets and selling strategies. The amazing part was when :

–       Pallav remarked that he’s learnt a lot from Kailash’s method of being in touch with customers every single day and being out there in front of them.

–       Kailash appreciated the way Fusioncharts has leveraged content marketing and driving a successful marketing team through his vision

The other folks around this round table were Avinash Sethi (Sapience), Ulhas Ambergaonkar (Mauris), Vishwas Mahajan (TiE Pune), Anup Taparia (TouchMagix), Satish Kamat (JBT), Sandeep Todi {me} (Emportant HR) Varoon Rajani (Blazeclan), Dilip Ittyera (Aikon Labs), Sagar Apte (CarIQ), Aditya Bhelande (Yukta), Sagar Bedmutha (Optinno), Girish (Shunya), Arnab Chaurhuri (Xcess), Avinash Raghava (iSPIRT Product Nation), Sarang Lakare (IntouchApp), Ranjeet Nair (Germin8), Pallav (Fusioncharts), Kailash Katkar (Quickheal)

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21st #PlaybookRT – 13 Sales Mantras for Product Selling in India – Part 1

Last weekend, we had a playbook roundtable on sales(mainly B2B) at the Ozonetel systems office in Hyderabad. Aneesh Reddy from Capillary led the RoundTable. The focus of the roundtable was on sales in product companies. This included early stage sales as well as issues faced during scaling sales. A lot of points were covered and the participants were involved in very lively discussions with almost everyone learning something new from the others experience. So without further ado, the following were the main learnings from the roundtable:

Ozonetel office
1. Sales solves everything. The panacea for all the problems of a startup is sales. Somtimes even a PPT is enough to do sales. This was explained by Aneesh how in their Capillary journey they showcased their to be built product on PPTs to prospective customers and made the sale.

2. Initial sales has to be done by founders. This was universally accepted by all the participants. So every founder has to become a sales person. There is no second way about it. Once you scale to a certain level, you can look at hiring dedicated sales head and building a sales organization.

3. Freemium model does not work too well in India. Get a customer to pay something(maybe even Rs.100). Make the customer also invested in the product. Only then will they give the time necessary for your product and evaluate it properly. Pilots work well, but try to make them paid pilots.

4. In India Push sales work, for outside markets, consultative sales works. In all cases, your sales person should be willing to listen to the customer and understand his pain points.

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Payment Collection

Payment collection is a big problem for SaaS products. Following up every month for the collections is a full time job. Some pointers to help in this are:

5. Quarterly, Yearly payments. See if you can push your customers to pay quarterly, yearly upfront. Give a discount two sweeten the deal. This is ok as you receive the money up front and you are reducing costs on processing collections.

6. Disconnect services. Most participants agreed that disconnection of service works as a deterrent to the customer. Give enough indications/alerts about the pending disconnection and follow up with a phone call for collecting your payment.

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Lead Sources

7. List rentals. Aneesh suggested that buying the list of conference participants gave a better RoI than sposoring some event. So identify some good conferences in your domain and buy the participant list from the conference organizers.

8. Attend exhibitions. Exhibitions in well known places like HiTex in Hyderabad gave a lot of leads to the NowFloats team.

9. Subscribe to local magazines. Local magazines are a good source of business listings as all good businesses advertise in local magazines. Build your list by mining this data.

10. Employ a good PR agency. Once you are at some level of scale, it makes sense to employ a PR agency. The PR agencies have good contacts in the media and they will get you good coverage. Though, they may not directly get you leads, they will help in brand recall, hiring and fund raising efforts.

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Inside sales:

11. Start with a 2-3 member inside sales team. Aneesh was of the strong opinion that inside sales is the way to go for B2B sales in India. Start small and monitor the team closely.

12. Invest and be patient. Sometimes, it takes around 3-4 months for an inside sales team to show some traction. be invested and be patient. Things will slowly pick up.

13. Team composition. One combination could be 1 data collector and 2 tele callers. Try different approaches and see what works best. To get started, you can out source the process, but that may turn out costly.

In the next part we will look at some metrics that will help us monitor sales.

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20th #PlayBookRT at Chennai: Sales war stories from 2 SaaS start-ups

An interesting discussion on the theme of ‘Sales’ happened last weekend at Chennai (Orangescape office) as part of the iSpirt round table. Shashank N D from Practo and Girish Rowjee from Greytip gave engaging presentations on their journey and the ~20 participants responded enthusiastically with several interruptions (read questions :)). [Note: A similar discussion in Bengaluru was covered earlier here]

Sales Stage - PractoShashank wooed the audience by starting off with his story on the origins of Practo – when his dad had to undergo a knee operation and wanted to get 2nd opinion from another doctor abroad, he couldn’t send out the medical records electronically. Thus began a singular journey of using emerging technologies such as cloud and mobile to enhance patient experience.

Here are some key ‘Sales’ takeaways from his presentation:

  • Golden Rule: Never build something without making a sale. Practo always got a buy-in from existing or potential customers before actually building new features. This was true even in their early stages.

 

Selling and Coding should be the only activities.

    • Practo benefitted heavily from referrals. They did Zero cold calling and focused on delighting existing customers. The doctors who became customers of Practo were so happy with the product that they were happy to evangelize it amongst their peers
    • It is important that the founders bring on the early adopters. At Practo, the founders got the first 50 customers and in the process achieved Product/Market fit (took about an year). While this number may vary for each company, it is important to note that dedicated sales or marketing should be brought on only after this stage.
    • Shashank also talked about evolution of the sales team over the years. While founders are the best sales persons in the initial stage, it is important to bring P-salesmen (P for Passionate) at the next stage followed by R-salesmen (R for regular) for mass adoption.
    • While product-market fit was the focus during the first phase of going from 0 to 50 customers, the next phase focussed on sales culture. Bringing on P-salespeople, providing free trials for instant gratification of customers, value based selling etc were the highlights
    • Zero discount policy: Practo followed a strict no-discount policy. This actually helped them reduce bargaining behaviour and enabled them to be seen as high-value. But in the ensuing discussion on this topic, most agreed that this is based on the type of product, target market etc. Selling to large customers may not be possible without discounts.
    • ‘Instant Gratification’ was a key customer psychology aspect that Practo focussed on during its sales cycle. Practo provides a feature where the doctor will be able to send an SMS alert to the patient within 30 seconds. This feature became a star-attraction of the product and improved sales
    • Practo was one of the first companies in India to sell a SaaS product offline. Some blogs even mentioned that this was start-up graveyard but it eventually did work for Practo.
    • As a matter of principle, Practo did not focus on doctors/hospitals that did not have computer infrastructure. This gave focus to their sales process. Also, they did not target general physicians and focused on specialists such as dentists, dermatologists etc. Thus targeting really helped them
    • To set up appointments, Practo initially had their own salespeople calling as well as had an inside sales team (with many women!). But what eventually worked for them was to create territories and assigning salespeople to specific territories. Salesmen were then made responsible market intelligence, cold calling etc. Usually the salesperson has to wait at the hospital to meet the doctor in person (like a medical rep) for the first time. But subsequent meetings were all setup through follow-up calls and prior appointments.
    • Medical reps couldn’t deliver as salespeople. They did not have the mind-set to challenge the doctors. At Practo, the smarter and tech-savvy sales guys were more successful as they were about to demonstrate the value of the product/technology to the doctors.
    • After various experiments, Practo had a clear separation of hunting salesmen and farming salesmen. Also most sales guys sell one product.
    • It is important to incentivize salespeople to get maximum yields from them. They have now established something called ‘flyers club’ where top 3 performers can go to a destination of their choice on an annual basis
    • All new salespeople undergo a 1 week training program and are instilled the Practo way of sales. But they have observed that it takes nearly 3 months for them to reach an efficient state.
    • There was an interesting discussion on a question on reselling partners. Majority of the participants concluded that resellers cannot solve your sales problems. What they can do is to magnify your sales success story. Resellers also bring in warm leads and act as influencers.

Shashank from PractoInterestingly and rather ironically, the session concluded with a note that start-ups should not target other start-ups as customers except as early adopters or reference case studies!!

Product Management related takeaways from Practo:

  • Practo spent inordinate number of hours with doctors. The idea was to understand user behaviour, just seeing them go about doing their work, how they interact with the software etc.
  • Practo had an interesting philosophy for feature prioritization – their order of importance was product vision, customers, employees and finally investors! Thus even when customers gave multiple feature requests, only those that aligned with the vision got implemented
  • Practo has lot of focus on analysing product usage, customer data etc. They built in-house tools (eg: epicentre) to monitor usage. Even during early stages when they had just 3 developers, one of them was purely focused on tools. Shashank calls it their ‘secret sauce’ for success.
  • They had a 30% conversion rate for face-to-face trial to paying customer.

IMG_2567The presentation on Practo was followed by a short session on Girish’s entrepreneurial journey with a few nuggets on sales related topics. Unlike Practo, Greytip did not have field salesmen and they went the online sales route for their payroll management software. It took them 2 years to realize that this model will not work well in India – not because of any issues on their side – but the market just did not buy without salesmen. Girish added that many of the emails that they send out are never read by the payroll in-charge. In fact, Greytip realized that CEOs may be more interested in such payroll software but the payroll head did not have the vision or mind-set to think of such possibilities. Thus began a journey of attempting to educate the target segment and build credibility in the process. Greytip also built relationships with payroll processors. Since the competition in payroll processing was cut-throat, their pricing was in fact determined by the market.

IMG_2568The following links were highly recommended during the discussion:

 

Guest Post Contributed by Karthik V, a software product enthusiast with degrees from IIT & IIM

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19th #PlaybookRT – Insights on the Indian Product Ecosystem

This #PlaybookRT was led by Shivku, techie and founder of Exotel. The theme ‘The Ship of Theseus’ was inspired by the movie released in 2012 and also by a team in TCS that used to call itself the Ship of TCS. The focus of this Round Table was to evaluate if product developers have enough insight about the Indian Consumer to make a product company. Most technology companies have an exposure to the Bay area product culture, but do they know enough to build products for our own local market needs. There were a lot of insights that were drawn on the product eco-system in India and the following is a summary of the discussion.

Exotel office

What is the ideal organization structure for a product company in India?

It’s the culture that defines an organization structure. It’s common to find the founder’s background driving the product decisions, for example, a founder with a sales background will ensure the product management strategy is more sales focused.

Shivku had led the discussion with Exotel’s organization structure explaining how his organization structure allowed him to scale his product. Exotel’s teams are divided into Operations, Marketing & Sales, Product Management and Core Technology. Interestingly the support team has been integrated into the Product team in Exotel. This unique structure was done so as to ensure that the product team is closer to the customer.  Customer complaints are usually an indication of bad code and the team that pushed this out this bad code is also responsible to fix it. Even though each team’s responsibilities and targets are clearly demarcated in Exotel, there is a technology person in each of these teams, making them self-sufficient.

Exotel started off with the intention of being a SaaS company, it almost fell into the trap of being a services company post launch. Some of the insights drawn from these discussions were:

1)     Democratically building a product feature set in the early stages is important. But once you cross a tipping point in terms of customers its best to pick and choose features that will drive the product’s engagement in your core audience. If you do not this, you may end up building a services company instead of a product company.

2)     Listening to your sales team is very important. It is upon meeting a lot of customers that the sales team can synthesize patterns (of customer needs). Identifying this common pain point between customers ensures that you are satisfying a broad market need and not a specific problem within a company.

3)     We can’t satisfy every customer with one product and your product will need to scale in the direction you see the best product-market fit. Ensure sales teams have a clear audience to market the product to. If the sales guy comes back saying that there is no product-market fit, then it is very likely that he is selling to the wrong audience.

KPI’s

In terms of KPI’s, B2C companies tend to focus more on the virality and retention  and B2B companies focus on monetization and sales. From the discussions it also became clear that you cannot improve on things that you cannot measure. The focus on which KPI’s to use to measure success keep changing depending on which stage your company is in, for example, in an e-commerce company, it is very likely that initially the focus would be on customer acquisition, it could later change to sales, then margins and probably retention.

Translating the top level metrics which the CEO/Board measures to smaller metrics which your sales/technology team can measure is very important. This helps you correlate any discrepancies and problems that may arise. It also gives you a fair understanding of the success/failure of a new initiative.

IMG_2557
Bharath, from Pugmarks.me, illustrated the above problems with an example. His product management philosophy currently is to create high engagement in a smaller audience. By identifying the customers pain points on why user’s drop-off very early, he was able to divert his team’s resources in fixing this problem, thus ensuring retention. He highlighted a problem with low latency which hindered the user experience leading to poor retention. The team has now spent a considerable amount of resources in fixing this problem, to ensure the product’s KPI’s were met. However, the focus could later change to improving engagement and/or CTR’s.

When do you know and how do you know if you have a product market fit?

Rinka Singh, highlighted his pain points while talking to his first set of potential customers. Although he had met many companies that he initially considered to have a problem-solution fit, these customers never converted into paying customers. It was through perseverance and exploring a little bit further down the value chain that it became apparent to him that he had been attacking the wrong market altogether. Upon increasing the awareness within this initially ignored consumer group, he had faced a tremendous increase in customer response.

Rashmi Ranjan, founder of Shoppers on, highlighted his experience when he launched his product. The product had served a very important need in the market that. It pulled customers in, without the need for a push. He had over 20-25 signups without even going out which indicated a great market fit.

In conclusion, when your customers start to get pulled by your product’s features then it is very likely that you have a successful product market fit.

What is the product manager’s responsibility?

A product manager’s job according to Marty Cagan is to discover a product that is valuable, usable and feasible. Very often the only person who has a complete view of the product (tech, business and sales) is the product manager. A product manager’s responsibility is to find solutions the market needs the most. He very often envisions the path of the product and depending on the company’s resources his responsibilities could also differ.

rt at exotelFrom the discussions, it became apparent that as an entrepreneur you very often end up constantly building and it becomes very difficult to focus on the micro details due to the backlog of features. A product is built in conjunction and not in isolation from the market. Hence, it is very easy to forget the customers who you are building this product for. In the build, measure and learn cycle, we very often forget to measure and learn. It is important to not let this happen, and the recommendation proposed was to change this role to be of a product market manager instead of a product manager as it is very easy to commit the mistake of constantly building without feedback.

Do I know if a product that was built abroad will be successful in India?

Products that are successful abroad and in India seem to have a strong cultural thread which makes it successful. For example, Facebook ties in common user behaviours of sharing and socializing. However, it’s the ecosystem that drives a products success. You need to constantly evaluate and iterate. In India, it is unlikely that a consumer product can succeed without venture funding. This is probably why we see more SaaS business models or a lot of B2B products in the Indian eco-system.

The conclusions drawn were that you need to have a network that allows a product to grow into the scale it needs to succeed. These networks maybe very well developed in markets like US, but India is catching up. It was also pointed out that there is no dearth of venture capital in India. The supply often exceeds the demand. We need to utilize these channels appropriately and grow the product efficiently. People also need to be more vocal about products they like as more often than not, it’s the early adopters who drive the product to success.

Are we bent towards making services in India?

The product round table concluded by evaluating the Indian product companies psyche. The question was whether companies like Infosys and Jugaad were the reasons why Indians leaned towards a services model. Services by nature start and end with a contract. The problem definition is usually laid out by another company and there is very little room for novel products to come out in this problem space. Product companies are driven by a vision, and it is often executed by combining fields such as design, humanities and engineering. It is important that Indian’s focus more on building our strengths in design and humanities. This disconnect was attributed to the poor education system.

IMG_2553

Conclusion

We have the knowledge and network to build great products in India. Although there maybe large inefficiencies in distribution, Indians have had a fair amount of success stories with regards to products. Flipkart and JustDial are great examples of this and we need to work towards improving the network for product entrepreneurs to succeed. From the Launchpad, promotion, content curation, funding, and giving back to the community, there is a lot that can be done to make the eco-system in India more robust to serve its customers.

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iSPIRT Sales RoundTable: Acquiring initial customers, Early product management, Indian SME Selling

Yet another extremely educational round table from iSPIRT – 8 out of 12 participants gave it a rating of 10/10!  Girish from GreyTip and Shashank from Practo led the round table and Aneesh and Yashwanth contributed with their experience at Capillary.  This article captures some of the key learning from the round table.

The focus of this round table was on acquiring the initial set of customers, particularly in the context of SME segment in India. However, several takeaways are applicable in a general context too. Other topics included early product management, hiring and motivating the sales team and channel partners, and product pricing.

Acquiring your first customers

One of the most common and biggest pain points for a startup is getting the initial customers. Enterprises don’t want to talk to start-ups as they are looking for a mature, tried and tested product. Channel partners also do not want to talk to start-ups unless they have proven sales record and reference customers.  It’s a catch 22 situation.  Add to that the long sales cycle of 2 to 6 months and it can be a very frustrating experience.

Shashank shared the learning from Practo’s journey of acquiring the initial customers:

  1. For the first 50 customers, the CEO did the sales and got them to sign up.  
  2. The focus on the first 50 customers was on product market fit (more from product management perspective than customer acquisition).
  3. Early on, they were not focused on pricing, but on getting people to use it.
  4. They went behind early adopters who were open to technology and did not try to engage with the late majority or the laggards. For example, if they found a doctor using an old feature phone, they would not consider him as an early adopter.  Lead qualification is very important.  Focus on quality leads rather than trivial leads.
  5. In the earlier days, they segmented the market and targeted only dentists in Bangalore and only later expanded to other geographies and kinds of doctors.
  6. They spent almost the first year and half to figure out what the customer wanted.
  7. Some of the unique things they did included not giving any incentive to existing customers to refer other customers. They wanted the customer to find so much value in their offering that they would refer on their own.  They had a zero referral fee policy as they wanted genuine references.

According to Shashank, four key things that they did right were:

  1. Spending hours with the USERS to understand their needs.  They measured each and every action the user is doing and used it to qualify the lead.   They had in-built tools in their product to measure usage.
  2. They build for needs that can SCALE to several other users.
  3. Focusing on PAID needs.
  4. USAGE was their best friend. 

Girish from Greytip talked about his journey from being on-premise only software to providing a cloud based solution too. They launched their SAAS version in 2007 when it was still nascent.  To experiment, they built a small product on SAAS.  They used the beachhead strategy i.e. get a first achievement that leads way to future successes.  The beachhead strategy goes by the name of MVP (minimum viable product) these days.

 

During the beachhead stage, they validated aspects such as customer need, data center hosting, cloud strategy, multi-tenancy etc.  Once they saw traction, they realized there is a much bigger market and they started adding more features to the product and scaling sales.  And they experimented with different things such as free trials, doing the sale completely online etc. They also tried SEO and SCM.

For their product, they saw that free trial did not work.  Nor did they see a sale being done completely online.  Girish’s hypothesis is that for their kind of product (payroll), people want someone to speak to and hold responsible for delivery and timeliness. On the other hand, some companies have got all their sales in the Indian B2B context fully online.  That is why it is crucial to validate the assumptions in the problem space and target market. 

The key takeaway is to experiment different things to figure out what will work for a given product in a given market context.  SEO, SCM, Adwords got them leads, but fulfillment was never 100% online. It required a human to close the deal. 

 

Do a bunch of experiments and have clear metrics on what you want to measure to decide the effectiveness of the experiment.

Getting the first customer takes the longest time.  Getting the second customer takes much lesser time. Getting the 10th customer is much faster and getting the 100th customer more so.  Customer acquisition time drops exponentially.

Metrics is always useful to convince value to customer.  Have an ROI calculator.  Quantify the perceived loss of not using your product.

To get initial customers, do whatever it takes.  Keep chasing the right guys. Use personal references and networking to get meetings. Once you get the meeting, then it is up to the product fit and normal sales cycle.

One company got their first customer after 10 months. And then it took them 14 more months to get to 10 customers.

Get 5 or 6 testimonials and users who love your product and only then go aggressive on sales. Build the product along with 5-6 target customers. First, figure out if there is a need for the product. Follow the lean startup model that is quite popular in startup literature. It really works!

In these times, the product has to give Instant Gratification when the customer tries the product for the first time. For example, with Practo, a doctor can send SMS to a patient within 30 seconds of starting trial.  Also, using the product for the first time should be very easy.

Getting references from existing customers is the best method for a startup to acquire more customers.  Along with references, cold calling is also needed to get more leads.

For startups founded by young entrepreneurs, age can be a concern in some domains, as some people give more credibility to age. For these kinds of startups, spending efforts to acquire additional credibility helps.   For example, you can enlist the services of an industry veteran.  Or use an existing customer base as a reference.  Customers listen to someone from their community.   For example, Scheme Central went through the secretary of the jewelry association and was able to get a huge community of jewelers sign up for their promotional event.

Create case studies. And put in metrics and data points in the case study that communicates the value very clearly.

A new product needs investment in marketing for awareness creation. Webinars help in thought leadership and credibility.  You should share best practices and industry trends in webinars.   In the last 10% time you can talk about your product.  However, the results may not be immediate.  Use technologies like webex, gotomeeting, gotowebinar.

Tradeshow presence helps in getting rid of the startup tag and establishes credibility. Use tradeshows also to educate about new things, establish thought leadership and engaging the community.  Tradeshows are also places where you can get time from people, who are otherwise too busy in their work to take time out for you.  Try to connect with and setup meetings with interested parties before the event, so you can get more mileage out of the event.

Hiring and Motivating Salespeople

Startups need passionate team members for sales.  In the early stages, professional sales people are not needed, but passion is more important. 

Sales culture and values are very important.  Different companies have different values, but it is important to articulate your culture and values so the new employees can identify and relate to the culture. For example, one aspect of the values could be that “We will not give any discounts”.   This can help in reducing the sales cycle since there is no negotiation phase. 

Build internal tools for sales tracking, conversions and product usage.  It might be worthwhile to have a dedicated engineer to build and maintain sales tools.

It is not very difficult to hire foot soldier sales in India for SME sales.  Some companies have hired sales people with 2 years’ experience for 25K INR per month. Naukri is a good place to hire junior sales people.

For a startup, it might be better to hire a little experienced folks instead of freshers.  In addition to training costs, freshers also have the urge to look out for a change after an year or two.  Attrition is higher among lesser experienced employees.

The key things to look while hiring a sales person are:

  1. Communication skills
  2. Sales ability. In the interview, ask him to sell his current product to you.
  3. Relevance. Right background.
  4. Attitude.

As you scale, investing in the right recruiter is very important as it is very important to hire good candidates.

Act quickly on mistakes.  If you find someone who is not right, let go immediately. Typically, 1 out of 2 sales is good fit.

Have a transparent incentive system.  And make it non-linear so the salesperson is incentivized to achieve more.  For example, if the salesperson gets 1 to 3 deals, the incentive is Rs X per deal. For the 4th through 7th deals, the incentive is 2X and for the 10+ deals, it is 3X.

While it is important to track results, for salespeople tracking effort is also important. It helps in improving morale. For example, effort metrics are things such as number of meetings per week, 4 demos a day etc. 

Early Product Management

The product requirements should be driven by the needs of the customer. Aneesh also mentioned that they built the product after talking to retailers (their target customer segment).  The first five customers gave them the requirements and then they build the product. 

Till you get 100 or so customers (the number might be different for your product), keep making modifications so you have a good minimum viable product (MVP).

Free trials are a great way to get customers.  The trial period can be 15 days, 1 month or 3 months or whatever is appropriate in your context.  This depends on how soon the customer can see the value of the product.  If the value is immediate, then a 15 day trial should be good enough.

If a customer asks for feature X that is not currently available, ask them to pay for it, or tell them to buy the existing product and give them a commitment on when the new feature will be ready.  In India, people don’t want to say no directly and hence may come up with different missing features to indirectly say no.  Ask other customers if they want the same feature X. If 20% customers need it, then build it. 

Build metrics in your product so you can measure which features are being used by customers.  This can also help in manage the funnel.  For example, you can take these actions based on usage during the trial period.

  1. Who is using it?  Convert these people to paying customers.
  2. Who is not using it? Extend trial.
  3. Who is not using at all? Train them.

SME mindset

Pay particular attention to the most common mindset in your target segment.   For example, some SMEs have budget constraints. So being flexible in your pricing might be needed. In large enterprises, things run on budgets, so we need to be sensitive to that too. In India, price negotiation and discounts are normal expectations. You will have to decide how you want to handle this.

If the product delivers value, people will pay for it.  It is not true that the SME segment in India does not want to spend money.

In the Indian B2B SME context, the customer wants to buy from a person. In the B2B SME context, another important factor is local language communication. Not everyone is English savvy or comfortable doing business in English. So they hired local language speaking sales people.

“Me too” syndrome is prevalent in SME segment in India. They are well connected with each other.  You can leverage the “me too” syndrome by using names of your customers competition who is using your product.

SME sales can take a few weeks to a few months, depending on the kind of product and the kind of market.  If there are multiple decision makers, sales complexity increases and it can take a minimum of 3 months.

In India, customers don’t say no directly.  They might give a variety of reasons to not make the commitment and you might mistake that for genuine interest in the product. Get them to say “Yes” or “No”.  Any concrete answer is a good answer.

Channel Partners

Get at least 10 customers yourself so you have established product-market fit.  And then go talk to channel partners.  Channels will not solve the sales problem for you. You solve it first and that will get the channel excited. They can help you replicate, but not create the sales model.

Channels want to make money. They don’t want to invest in your product.  They want to take up already proven products.  You might want to put your sales guy in the channel partner’s office and make sure channel partner is making money.  Channels will take time and effort.

SAAS products are not exciting for channels as the ticket size is small and they don’t have much scope for making money from implementation and upgrade services.  In SAAS, you need to give higher commissions.  You can use channels to increase awareness.  For SAAS, marketing is more important than channel partners.

For straight forward low touch products, you deal with distributors and resellers (e.g. anti-virus software). Channel partners are typically used for high touch, high involvement kind of solutions where the partner brings in some perceived value addition.  

Thoughts on Pricing

Here are some rules of thumb to arrive at product pricing:

  1. What is the customer currently paying to solve the problem? For example, is it a person whose salary is the cost? Or it is on-premise software that you are replacing with a SAAS solution? Your product pricing has to be less than what the customer is currently paying.
  2. Your cost of customer acquisition should be less than the annual revenue from the customer.  Otherwise, it might not be a sustainable business. Cost of customer acquisition is roughly equal to total salary of sales people + some % markup for additional costs associated with an employee divided by the total number of customers acquired.  The formula might vary based on your cost model (e.g. advertisements), but you need to figure out a simple handy customer acquisition cost calculator even if it is not accurate.
  3. Life time value of the customer should be at least 3 time annual revenue from the customer (=1/churn).

Some Tips and Reference Material mentioned in the round table 

  1. 6 Cs of SAAS metrics and other resources, available at www.bvp.com.
  2. A book titled “Solution Selling”.
  3. Some of the participants found yesware.com  a very good tool for salespeople.  It tells interesting things about whether a prospect opened a mail, forwarded it etc.
  4. Slides used by Shashank at the round table are here.
  5.  A very good blog for startup sales is http://www.bothsidesofthetable.com/2013/06/13/why-your-startup-needs-a-sales-methodology/ (PUCCKA model).

Tweetable Tweets

Getting the first customer takes the longest time. Customer acquisition time drops exponentially. Tweet this.

To get initial customers, do whatever it takes.  Keep chasing the right guys. Tweet this.

Experiment with different models in your specific context to figure out what will work. Tweet this.

The customer needs to have instant gratification when he tries the product for the first time.Tweet this.

Getting references from existing customers is the best method for a startup to acquire more customers. Tweet this.

Have a nonlinear and transparent incentive plan to motivate salespeople to achieve more. Tweet this.

Build metrics in your product so you can measure which features are being used by customers.Tweet this.

In India, customers don’t say no directly. Get them to say YES or NO. Tweet this.

Get at least 10 customers yourself. And then go talk to channel partners.Tweet this.  

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Happy B’day ProductNation, We are One year Young

Yesterday is gone. Tomorrow has not yet come. We have only today. Let us begin. ― Mother Teresa.


ProductNation is today, one year young. Yes! One year. It didn’t seem too long ago when I was contemplating putting a blog together to showcase Indian Product companies. It all started as a passion project at the One97 office with the support of Vijay Shekhar Sharma; it was something I wanted to do for a long time. Having worked for almost eight years with the Product eco-system, I wanted to connect and contribute in a small way to the project building India as a ProductNation. I wanted to build something which allowed product people to share their experiences. I did bounce off the idea with a few of my friends, evangelists of the Product Industry and I had spontaneous commitment from many of them.


I always like to read and understand the successes of product entrepreneurs, which include some inspiring stories, the challenges faced by them and how they have been able to address global markets. These are the stories which will inspire a new generation of product companies from India, and indeed, it’s been a wonderful journey, for me personally, as well as for the people who have been involved. 

Here’s what ProductNation is today – 

  • We are home to 400-odd blog posts here in 50+ categories such as Product Management, Reviews of Products, Design, Eco-system, Funding, GotoMarketing and so on.
  • We have featured 110+ product companies on the site.
  • We do 5 blogs every week – Monday to Friday at 11am and once in a while do a blog on Saturdays.
  • There are 75+ contributors who actively contribute articles and share their own learning’s here. Many of them help me do the Product Reviews, interviews with Product Companies and the like.
  • We have started #PNHangouts where we have conversations with Product Managers.
  • We started out with sending newsletters twice a month, but now with so much of content coming up, we schedule the newsletters thrice a month (5th, 15th and 25th).  You can access the past issues here and subscribe to the newsletter here. We have sent out 53+ newsletters so far
  • We have 80+ Posts on Product Management
  • 18+ Playbook RoundTables which have been covered on the site
  • A vibrant community with 500+ members and 50+ conversations
  • More to come…stay tuned 🙂

 

ProductNation is the result of a collective effort, and I’m grateful to all the evangelists who have spent enormous efforts in contributing and in making what ProductNation is today! When I started, it was just me and my passion. Today, I have a large “virtual” team and many evangelists who truly believe in the movement. I do get many people who compliment me on the content and the regular updates that they get from the site. There are many who are silently observing the movement and I’m sure will jump in soon. 

ProductNation was one of the first steps in the formation of iSPIRT(Indian Software Product Industry RoundTable) – a think-tank with a difference to transform India into a hub for new generation software products. So here’s the deal. We need to put India on the global software product map. We need to do it soon. Come, join us.

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We didn’t start the fire, it was always burning!

In India retailing of jewellery is undertaken in various small and large jewellery shops. Whether the retailer is a large shop in metropolitan areas or a smaller rural shop, the adoption of Software and IT both for back office operations or for business growth, is almost negligible. Why has the change not occurred?

On September 22nd 2013 at Royal Orchid Central, Bangalore, some of the most inspired minds from the Jewellery Industry and the Software and Technology industry had the opportunity to go on a journey of inquest. Are there gaps in the Jeweller’s perceptions about the benefit of Software and Technology? Do Jewellers have the right external eco-system to enable them to overcome the barriers to adoption? Are Jewellers happy with whatever Software and Technology they have used and adopted so far? Is there fire in the belly of every jewellery business owner, to objectively seek answers to these questions, or do we have to ignite a new spark?

More than three hours of engaging, entertaining and educational experience. A 100+ jewellery retail business owners got the opportunity to interact and seek answers to many of the questions from industry leaders Shoaib Ahmed, President of Tally Solutions and full-time fellow of iSPIRT (Indian Software Product Industry Round Table) and Mr. Ramesh Davanam, Secretary, Jewellers’ Association of Bangalore. Not all elements of the seminar can be reproduced here, but below are some of the key highlights and learnings.

Making of the Event – The key ingredients

We at SchemesCentral set out to answer many of the adoption related questions about 10 months ago, so that as providers of Software Platforms and Information Systems to the Jewellery community, we empathize with the jewellery retailers, understand their real pains and provide solutions that best address them.

What is required for the transformation of the Retail Jewellery Industry? As owners of family businesses, do retail jewellers realize that change is inevitable? If yes, then what are the real barriers to adoption? What can catalyze the endogenous change within business owners as individuals? These were some of our fundamental questions.

Almost in parallel, nearly around the same time last year, iSPIRT, through its SAI (Software Adoption Initiative) has gone through a similar journey and had put in place a transformative guide that enables all jewellers (whether retail, wholesale or refiners) to become informed buyers of Software and Technology. Sometimes, an entire industry, as a complex collective, can get into a state of equilibrium/inertia, and will need an external shock, to enable radical transformation. Such an external shock is enabled by new policies, new structures and new leaders. In our casual conversation with Mr. Shoaib Ahmed, what occurred to SchemesCentral was that, iSpirt was clearly addressing the exogenous change. What are the factors that can enable the exogenous change in the entire ecosystem, as a collective?

When we marry the two, what is the outcome? A framework that encompasses

  • Focused Solutions for changes that are needed from within, as individuals & business owners and
  • Broad Solutions for negotiating the external factors that influence the whole ecosystem.

It was this dichotamous synergy that gave SchemesCentral the confidence to organize the first seminar in close collaboration with 2 industry associations. The Jewellers Association of Bangalore (JAB) and Indian Software Product Industry Roundtable (iSPIRT).

The idea for the Seminar was concieved less than 3 weeks ago and Mr. Ramesh Davanam, Secretary of JAB, was the first one to give his complete vote of confidence. It was whole-heartedly seconded by the President of JAB, Mr. G.V. Sreedhar, and very ably supported by the members of the association. Within the next week, we had the theme for the Seminar in place, “Enabling Retail Jewellery Businesses to grow exponentially”.

After having invited more than a 100 jewellers, reserving the venue, and working through more than 3 hours of engaging content for the session, we were anxiously hoping that we hit the right chords. Then another magic happened, Mr. Shoaib Ahmed volunteered and gracefully accepted to be part of the Seminar too. And with his natural charm and flair he was also clearly the man-of-the-match on the Seminar day.

Event Unfolded

22nd September 2013 in Bangalore witnessed the beginnng of a new journey. As the session commenced and the clock began to tick, more than a 100 guests and delegates, crowded the pinewood hall. With a full-house, the audience were treated in the 1st session to a new way of thinking, to first as individuals, transform themselves. The intention of the session was to motivate them and nudge them, into accepting certain realities like,

  • The reach and power of the internet,
  • The benefits of engaging with the connected consumer and
  • The implications of being in an Ecosystem of Technology partners.

By the start of the 2nd session, most retail jewellers started to open-up and wanted very specific focused answers to all their software and technology challenges, trust being the most important of them all. It was at this moment, a couple of testimonials from iSpirt and an inspired talk by Mr. Shoaib Ahmed, encouraged them to further explore answers to most of their problems.

In the final session the SchemesCentral.com platform as an idea in-itself, gave the delegates very specific focused answers on their challenges for maintaining and tracking payments for Jewellery Savings Schemes, it was only but natural for them to understand that there is now a community of software developers and partners, just within their reach, in their own neighbourhood, who are willing to help them in their quest for business growth.

Conclusion and Takeaways!

If we tell our customers about our solutions they might forget, if we show them they might remember, if we involve them, they will understand. So start your seminars or workshops today. The Key-takeaways from the Seminar on 22nd September are,

  • If you have a revolutionary software product or platform, seek avenues and opportunities and reach out to established institutions to collaborate and grow.
  • There is fire in the belly of every business owner to grow his business and break new boundaries, jewellery retailers are no exception.
  • We in the software community have to find both endogenous and exogenous ways to nudge them and motivate them, so that we can catalyze the spark within them to become a wild-fire for software and technology adoption.
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Insights from the Sales Playbook RoundTable Led by Ambarish, Knowlarity in Gurgaon

The second Sales Playbook RoundTable in Delhi-NCR was held at EKO office in Gurgaon, led by Ambarish Gupta– CEO/Founder, Knowlarity Communications. About 10 companies attended the meet such as EKO, Easework, Busy, Yippster, Conixevus and few more. The format was quite engaging and action oriented as participants were asked to come with their own set of sales challenges for the RT. The session started with a brief introduction and the specific challenges participants were facing.  There was a good degree of overlap among sales challenges of different organizations. The common theme emerging out of the challenges can be divided into three categories – Profit margin, Velocity of Sales & Scaling up. I’m listing down few of the actionable learning discussed

Improving Profit margin:- 

There was unanimous agreement over the core purpose of business among participants i.e to make profit which is a very elementary mathematical equation i.e difference between revenue from a unit customer & cost of serving a unit customer. Even if somebody is making revenue, he may choose to leave a particular customer if cost of serving customer is more than revenue. Exceptions are always there if the unprofitable customer is a source of bringing other profitable customers. Organizations should have real time view of profitability of different customer segments and may focus on segments with maximum profitability. While formulating any pricing strategy, the above mentioned formula should be kept in mind.

  1. The most important point in improving profitability is to understand the sustainable value coming out from the different customer segments & know associated risks. For example- startups as a major customer base are not good for companies because most of them die in a year so average cost of acquisition & serving is always going to be more than the average revenue for these customers. Similarly, up gradation to the existing customer may enhance profit margin significantly.
  2. Ask the customers to pay for the product you are providing, you will be getting right kind of feedback about product & business model, if majority is not willing to pay, it’s a red flag and one may need to modify the business model & product
  3. The pricing model should be taking care of mind set of customers so if the target customers are not in a position to shell out big amount of money, the pay as you go model may be applied with known risk that churning of customers is going to be high risk for the company.
  4. Payment term is also quite important, For example – Even in SaaS model once can ask for yearly payment rather than collecting on monthly basis. It has got several advantages-a) Advance cash flow b) reduced tension & effort of collecting money c) you have got a time in which you can make customers use the product and take benefit out of product.
  5. Make customers’ use the product so that they can feel the business benefit. A happy customer’s life time value is quite high for the company. The companies need to make as many happy customers as possible as a brand ambassador so after getting word of mouth publicity /referrals the cost of acquiring customers reduces significantly resulting in better profit margin for the company in long run.

Enhancing Velocity of Sales:-

A lot of participants expressed their concern about increased sales cycle and discussed the ways to reduce the cycle time & find a right process for reaching out to prospects.

  1. Network is very important in finding first few customers; it was observed that most of the companies got first few clients from personal network which resulted in an early traction for products.  So build a network of mutually beneficial relationship much before you try to reap the benefits.
  2. For reducing the time cycle, team should focus on finding the person in the target companies who is feeling the maximum pain for the problems you are going to solve and identify the decision maker such as CEO/CMO.
  3. For finding the relevant personal details such as mobile no. /email id internal to an organization, various tactics may be employed such as finding details from LinkedIn & Naukri profile, calling the board member as a journalist for interview etc.
  4. It is always advisable for going through a referral route if available so that the prospects would be in a frame of mind to hear. Moreover, while interacting on phone for the first time, you have just first 30 seconds to impress, be precise to what you are going to deliver in terms of benefits not about details of products. You will be getting enough time and a meeting with all the key executives if you can hold call for first 30 seconds.  The benefits should be clearly leading to either increasing the revenue or reducing the cost in direct or indirect ways such as, “I will help you in making additional money from existing customers” or “I will reduce the cost of serving to your existing customers”.
  5. If your product is new in market, one needs to identify the early adopters who are willing to take chances for launching the product with assessment of the probable competition, barrier to entry, market potential & preferred business/ revenue model in different markets.
  6. If the product is a replacement of the existing product then value from the replacement product should be of at least 10x more value than that of the existing product. The product companies need to understand & answer the key questions- why people should be replacing existing system/products? The mindset of a customer is always going to maximize the value per unit cost. One needs to find a solution of this puzzle for individual prospects before reaching them so one needs to concentrate on understanding the pain points with existing product and how to help prospects with those pain points while still providing the others as usual benefits to the customers.
  7. Both tangible and intangible value should be taken into consideration while evaluating overall value to the customer. One needs to be very careful if you are changing the path of doing business as usual for the prospects as there would be a degree of difficulty in doing something new for the customers. This is going to create negative value to the prospects.
  8. Keep customers / prospects engaged in a personalized way such as sending some information that may or may not be relevant to the product but may help prospect. Always keep a updated social profiling of the prospects from Facebook, Twitter and LinkedIn and find an excuse to follow up such as Congratulations for getting award etc. One need to understand that we are dealing with human beings not machines so clubbing of trust and emotions is extremely important to reduce sales cycle.
  9. The first point of interaction with customer is what you are going to provide. Talk to the customers in a language they can understand rather than focusing on product and features, it comes later in answering to the question how you are going to provide. For example- Our product will reduce the serving cost per customer in call center from 50 paisa to 10 paisa or our product is going to help in your business conversion by x% that is going to increase your revenue by y%.
  10. Even from the same target customer segment, different prospects are at the different stage of the sales cycle so marketing pitch should be in line with different stages in a sales cycle i.e Awareness – attract – Engage- Convert – Happy customer – Referral / word of mouth – new customers and so on.

Scaling up:-

  1. Product companies should connect to prospects to understand the pain points of the customers rather than building a perfect product with no market requirements. They should start talking with customers even if the product is not ready to receive valuable feedback.
  2. Time to make entry in the market is quite important as  it decides the opportunity windows of a company to tap maximum benefits in minimum time & effort
  3. The system & processes during the early stage of startup should be highly flexible. After a certain period the same flexible system should be converted into process driven system to run the show. Therefore, one should evaluate & understand the system / processes / resource that are needed to drive the expected sales after scaling up & manage the changes from the existing level to the future level smoothly.
  4. One needs to find the sales model that is highly effective and scalable after market test and multiple iterations. Once you have found the right kind of value proposition and target set of customers for that value proposition with effective sales channels, you can scale up same model exponentially.
  5. The choice of domestic vs. international market is quite tricky. In developing market competition is less, quality expectation is less, market potential is high but customers are not willing to pay so ticket size is small. One of the biggest obstacles is the mind-set of customers in developing market. However in developed market ticket size is high, less hurdles with mind-set but competition is intense with very high expectations on front of quality. So considering these two facts one can take domestic market as a test market for testing and enhancing the product. Once it reaches the level of international standard, one can make international markets as the primary source of revenue. Jumping to international market without having a tested product may block all the future chances in that market forever.
  6. The selection of appropriate sales channel may be explored after trying established model such as telesales, channel, face to face & enterprise sales. Only after market testing, one can determine the right way to get more profitable customer at lower costs.
  7. The product companies need to create a sustainable source of inbound leads rather than outbound leads to improve efficiency of the sales system. Sales people should not be engage with every potential customer, they should be getting filtered list of potential customer for engaging & converting
  8. Another basic question is how customers are going to discover you? One needs to see the whole picture from the lens of customers for scaling up. Depending upon the computer literacy of the targeted customer offline or online or combination of marketing tactics may be deployed. For example- if customers are searching heavily over internet for the keywords associated with the products- Google organic and paid search could be good idea to hook the prospects. However if the search volume is less then display tactics may be needed to create the awareness among targets & later for hooking.
  9. The product companies need to understand the mindset of channel partners and dynamics that is happening in the channel partner industry. As profitability is going down, existing good partners may be looking out for new streams of revenue. So, they would be happy to work on a more profitable venture for taking a new product to the market. Apart from that capability, influence into target market and willingness to sell must be evaluated for potential partners.
  10. The big channel partner may not be a good partner unless the new product can create immediate good streams of revenue for them, so small partners would a preferred set of partners because they would be devoting dedicated time even for small revenue however the impact on company’s revenue per partner would be limited so number of such working partners come into picture for getting maximum revenue in a given time.

These insights were the result of the sales round table meet. The round table meet ends with a promise of meeting again for discussing and sharing experience again in coming month. Thanks to  iSPIRT ProductNation in being instrumental for building core competence in product organizations.

Guest Post by Manoj Kumar, a volunteer for ProductNation

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iSPIRT ProductNation Branding RoundTable: Why Product Branding is important for Startups?

As usual, the 16th iSPIRT RoundTable was a great learning experience. Many thanks to Avinash Raghava & iSPIRT for conceptualizing it, and to Helion Ventures for sponsoring the venue and the snacks.

Dhruv Shenoy of Knowience Consulting, a well-known Marketing Guru, was the facilitator, along with Rajan from Intuit. Thanks, Dhruv and Rajan, for an educational and entertaining session.

I used to think that product branding is only for large companies and startups and early stage companies don’t need to worry about it.  So I was skeptical at first – but I trusted Avinash’s judgment in putting together this session.  And it was an eye-opener.  Dhruv explained to us what “brand” is and why it is important for products at any stage of maturity.  Building the product without doing an exercise in defining the brand can lead to lot of wasted time and money.

Branding consists of three high level activities “What to say”, “How to say” and “How do we reach the target customer”.  This round table focused on “What to say”. Future round tables will cover the other two high level activities.

Starting with the definition of “Brand”, we covered “Customer Insights”, “Product Proposition”, “Target Audience”, “The Six Tenets of Product Branding”, “Brand Essence” and “Brand Positioning Statement”.

After reading this article, give a shot at creating a Brand Positioning Statement for your product.  From my personal experience, I assure you that it is time well spent.

What is a brand?

We normally look at only commercial products, but the concept is broader.  Mother Teresa, Lord Ganesha, Santa Claus are also brands. So are Diwali and Valentines’ day.  Or even the concept of “Brand India”.

The three key attributes of a brand are:

  1. Most Unique (not overlapping with others).
  2. Most Relevant
  3. Large following

For example, among the 33 Crores of Hindu Gods, which God is known for removing obstacles and hence needs to be worshipped first?  Everyone knows it is Ganesha. Ganesha satisfies all the three conditions above.

Brand is how consumers identify the product and recall it. Brand is built over a period of time by the consumers/target audience.  The manufacturers can do brand building activities keeping the above three attributes in mind. Brand building takes time. For example, Gmail built it over several years to overtake Yahoo.

To be successful, the product should not be a commodity. It should be a brand. For example, rice is a commodity and is talked in terms of Rs. 43/kg or Rs 50/kg. But Kohinoor Basmati is a brand.   A brand kindles attributes about the product in the mind of the consumer.

Brand creates a promise. This needs to be delivered by the product. Otherwise, it will backfire badly.

So how do we go about creating a brand for our product?  The first step is to get customer insights.

Customer Insights 

It is very important to realize that there are thousands of things going on in the customer’s mind.  How do we get into the mind of the customer and grab mindshare?  Even if you have a great product, if the customer cannot identify and recall it, you have lost the customer.

To understand how to get the customer’s mindshare, we need to get customer insights. Customer insights are at a deeper level and not just at the level of product benefits/features.  These deeper insights should be used to differentiate your product and get the customer’s mindshare. 

Here are some examples of customer insights:

(Disclaimer: All the statements about different brands and products in this article are hypotheses made by RT participants as an exercise for better understanding.  They may not reflect reality)

  • SalesForce:  Before SalesForce, companies had to make large investments in Software and have it installed and maintained on premise. This was keeping SMEs away from expensive Software. They could not afford to make such investments to see value. Subscription based, on-cloud service appeals to this customer segment.  SalesForce targeted this customer insight.
  • Dove: As women get into early 30s, they have the insecurity that they are looking older.  Dove promises that they will look younger.
  • LinkedIn: Man is a social animal and wants to keep in touch with his contacts.  In the offline world, the mindshare of friends (whom you meet at home in a relaxed environment) is different from mindshare of professional contacts (whom you meet in a coffee shop with some agenda).  LinkedIn’s insight was that what you do offline (meeting people, networking etc), you can do online also in a separate way. Online life mirrors real life.
  • Instagram:  People want to look like professional photographers. People are taking photos from their mobiles and sharing, but the photos were not looking professional.  Instagram lets you do that from your mobile.
  • Scooty: Kinetic Honda is very heavy for young girls.  They need something lighter without gears.
  • Gmail: Other mail providers were limiting the max space. Gmail came up with 10GB space.

Focus on only one thing from the customer mindshare point of view.  Which part of the customer’s problem are we solving? Focus on the deeper benefit.  David Ogilvy said “Interrogate your product till it confesses its strengths”.  What can my product do that others can’t? Without this, your brand will not have recall value.

If we have multiple product lines, then we should have a main mother brand (e.g. Microsoft) and the sub brands for individual product lines (e.g. MS Office).

Study the market dynamics and focus on customer insights.

  1. Customer Insights should be the foundation of business planning.
  2. Remember that customer attitudes are never static.
  3. Customer insights are the key to building a discriminator.

How do we go about getting customer insights?

  1. Usage.  This is the best way – find out how the customer is using your product and take feedback.
  2. Observation.  For example:  shopping insights, product usage analytics, surveys, research.
  3. Probe. Ask open ended and close ended questions and analyze responses.

The best way to get consumer insights is to go back to the people who are using your product and find out why they are using it.  This will also give you insights on your product differentiation.

Ask customer to describe your product.  It can illuminate you on what you think your customer thinks (apologies for the thought twister).

Once you’ve got the customer insights, the next step is figure out which insight you want to target.  And that brings us to “Product Proposition”.

Product Proposition 

How will my product be different with respect to the competition?

  1. Filters down from consumer insights.
  2. Discrimination starts with the product.
  3. Brand builds on product promise.

Here are some examples:

  • iPod: iTunes + iPod. Buy one song instead of an album. Biggest storage capacity.
  • Nissan Sunny:  More legroom for people sitting in the back seat. Longer car in the same category (i.e. at Sedan cost).
  • Google:  With earlier search engines, you had to think what to type. Google addressed this with “Search the way you think”.
  • Flipkart: Hassle free delivery.  Very fast.
  • Maruti Car:  How much mileage? Value for money.

It is very important to be unique on some dimension – even from the day you conceptualize the product.  And, the product proposition has to be very simple to have recall in the customer’s mind.  One rule of thumb is to aim to explain your product to your child/grandmother.  Typically, this can be done.

Think of what is keeping your customers awake at night.  And use that to grab the customer’s mindshare. For example, let’s take my company’s product – KeyMails – which solves the problem of email overload for Microsoft Outlook users. The insight could be that the target customer is worried about missing an important mail. So, something like “Never miss an important mail” could be one approach to branding.

Think in terms of “Unique Atomic Unit” about your differentiator.  For example, with facebook it is “update status”; with twitter, it is “very short message”.  Spend some time thinking about what the unique atomic unit is for your product.  Do it now.

Go to market with the differentiating “hero” feature.  Other features are needed, but they do not form part of go to market strategy.  Example, Scooty is a vehicle that has good mileage and a good engine, but they focus on their differentiating factor of being usable by girls.

Once you have the product proposition, the next step is to understand the target audience.

Target Audience

You need to have answers to the following questions about your target audience:

  1. Why should we understand the target audience?
  2. Who are we talking to? And why?
  3. What are his/her attitudes to the category?
  4. What defines him/her?

For example, for Naukri, the recruiter thinks he needs their service if he needs to hire 200 people in a month. If it is just for one or two positions, consultants might work better. This customer attitude is important to know.  Online recruitment is for scaling.

You need to create a persona for the target customer. In the initial stages of a startup, it is better to have only one target persona.  Having multiple target personas causes confusion.  Pick the persona that is most promising.  The persona needs to change and be refined as you get more data.  For example, though Practo is a general purpose solution for doctors, they first picked dentists and later expanded to other segments. “Everybody is my customer” does not work.

Give the target persona a name – say Molly/Tom/Rohan and write down as many attributes as you can about the persona – what is the annual salary, spending habits, attitude towards buying products similar to yours etc. This helps in identifying who is a target customer and who is not. This will also help in decision making – for example, if you want to add a feature – ask if Rohan will like that feature. And base your decision on the answer to this question.

You can have multiple target personas once you become more mature.

What if there are multiple people who are involved in the buying decision for the product? Who should you focus on? Your pitch should be to the buyer. You have to talk to the users and the influencers too, but the pitch must be to the buyer.

With this background, it is time to introduce the six tenets of product branding.  This is a concise summary of the discussion so far.

Six Tenets of Product Branding

You need to study and arrive at your understanding of the following six pillars.

  1. Market Dynamics
  2. Target Audience
  3. Consumer Insights
  4. Competitive Environment
  5. Key Brand Benefit.
  6. Reason to Believe.

If even one of the above is not satisfied, you might not get the results. For example, one of the most common reasons for failure is that brands do not address the “Reason to Believe”. It is easy to make tall claims, but the consumers must clearly see the reason why they should believe your product’s differentiator.

All the learning above are inputs to two tangible outcomes for your brand – (a) Brand Positioning Essence and (b) Brand Positioning Statement.

Brand Positioning Essence 

“Brand Positioning Essence” typically consists of two to three words.  It is that one aspiration of the core target audience that the brand would like to uniquely own.  For example, “Feminity Restored” can be the essence for a soap targeting middle age women.

Take a few minutes now to think about those two or three words that communicate the essence of your product.

Brand Positioning Statement

Create a Unique Brand Positioning Statement that covers the six tenets above.  A template for your statement is given below:

My product is a ________ (market dynamics) for ______ (target audience) who are ______ (consumer insights) and my product does _________ (key brand benefit) because ____ (reason to believe).

Here is a shot at KeyMails brand positioning statement.

“KeyMails solves the problem of email overload for business people who use Microsoft Outlook, and who do not want to miss important mails; by ranking the mails in the order of importance to the user, by automatically learning from the past email behaviour and easy and minimal configuration.” 

I request other participants to write down their unique positioning statement for the benefit of the readers.

For your reference, here is the silde deck used by Dhruv for the round table.

Conclusion

Branding is a must for any product, whether it is in a mature stage or early stage.

Particularly for product startups, the “brand” of the product is important. It is more challenging when the product is still evolving and the startup is trying to figure out the product-market fit and a minimum viable product.  However, brand is in the mind of the customer and it is evolving. It can change with product market fit, but it has to be present at every time.  You always need to have a differentiating factor that addresses a deep need for your target audience.  And your brand positioning can and must change as you change product strategy.

It is similar to your business model.  It is not advisable to start building a product without having a business model and business plan.  Sure, it will change and evolve over time – but at any point in time, you do have a business plan.  Same thing with branding.

If you’d like to share your knowledge on product branding, please do write them in the comments section.

Tweetable Tweets

Branding is as important to startups as it is for mature products. Tweet this.

Brand creates a promise. This needs to be delivered by the product. Otherwise, it will backfire badly. Tweet this.

Thousands of things are going on inside the customer’s head. How do you get mindshare for your product? Tweet this.

Even if you have a great product, if the customer cannot identify and recall it, you have lost the customer. Tweet this.

Customer insights are at a deeper level and not just at the level of product benefits/features. Tweet this.

Focus on only one thing in the customer’s mindshare. Without this, your brand will not have recall value. Tweet this.

The best way to get consumer insights is by asking people who are using your product why they are using it. Tweet this.

Ask your customer to describe your product.  It can illuminate you on what you think your customer thinks. Tweet this.

Go to market with the differentiating “hero” feature.Tweet this.

Create a persona for your target customer. Give a name like Tom and write down Tom’s attitudes. Tweet this.

Brand positioning essence is two or three words that you’d like to own in the customer’s mind. Tweet this.

Create a brand positioning statement addressing the six tenets of product branding. Tweet this.

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The march of the product brigade!

For the last fifteen years and more, there has rarely been a meeting of visionaries and practitioners in the IT industry where somebody does not offer the view that the days of IT services are nearing an end and the product movement will create new heroes for the industry and country.  In each of those fifteen years, the gap between the revenues of the services firms and product pioneers has only widened and a cynic might be pardoned for asking “Is it really worth our while to obsess about products when the services sector continues to do well and find newer and newer avenues and models for growth?”

The truth is that the success of  product ventures is an idea which has been slow in developing but whose time has now surely come. Many successful Product Conferences conducted by NASSCOM in Bengaluru and led by the passionate  Sharad Sharma and his band of merry evangelists, the iSPIRT and ProductNation initiatives of the product group championed by former NASSCOM stalwart Avinash Raghava, the very successful Knowledge Management and Intellectual Property movement led by the Confederation of Indian Industry and the huge deals flows seen from product wannabes for funding by the Indian Angel Network all point to a renewed surge of enthusiasm for a “Made in India” wave that will sweep the industry forward and unleash a tsunami of success for many young entrepreneurs.

However there is no case for a simplistic polarization between services and product companies and there is certainly no basis for the argument that IT services firms will decline and give way to product firms. Even five years ago, when we had postulated that the industry would grow to a three hundred billion dollar level by 2020, the canvas was painted in many colours – on-premise and cloud based services, new platforms and frameworks, accelerators and shrink wrapped and embedded products. The boundaries are blurring and most of us in services have embraced IP creation as a necessary part of all our vertical solutions. At Zensar we have built a compelling “Digital Enterprise” strategy that leads our clients from systems of record through the wonderland of Cloud, Mobility, Social Media and Analytics to true systems of engagement. This strategy is delivered through an eco-system of product partners who have focused point solutions for vertical and horizontal engagement. The day is not far when all services firms will attempt to garner over thirty percent of their revenues from systems integration and carry a cohort of product partners into new markets.

This is not to say the product companies cannot succeed on their own steam. On the contrary, there is a strong sense of self-belief in the new generation of product entrepreneurs in our country even as some of the global product majors are beginning to consider themselves as services companies. A forthcoming CII Knowledge Management conference will showcase small companies in India that can provide worthy solutions that push the frontiers of knowledge, for organisations in all user domains and as well as technology savvy services organisations. A revolution is in the making in this country and the march of the product brigade will lead this revolution !

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Some Takeaways from the #PlaybookRT on Effective Product Mgmt: Applications and Benefits for Technology Startups and SMB

The fifteenth #PlaybookRT with focus on Product Management was held at PubMatic office in Pune. It was led by Shrirang Bapat (VP Engg at PubMatic). Shrirang set the stage for RT by sharing the importance of ‘What NOT to do’ which comes from years of experience. To accentuate his point, he shared a story of introducing handhelds in the market beginning of 1997. Through this story he explained the importance and process of getting into customer’s shoes when defining the problem and designing the solution. The message was clear don’t be Tech arrogant! Be empathetic towards your customers. Understand their pain points and solve them by creating simple yet elegant solutions…

After the setting the tone for the RT, Shrirang formed pair of twos in which each person in the pair would introduce the other person by sharing the following information:

  1. Name
  2. What you do?
  3. What does your company do?
  4. What do you expect to get out of the RT?
  5. The person who had influenced the most?

This turned out be a great ice breaker session. Participants really got to know each other and understand each other’s perspectives. Answer to ‘The person who had influenced the most’ where interesting. Here’s what some participants answered:

  1. Founder of Toyota –  Kiichiro Toyoda
  2. Father
  3. Steve Jobs (3 nominations)
  4. Jack Welch
  5. APJ Abdul Kalam
  6. Mahatma Gandhi
  7. Wife
  8. Leonardo Da Vinci
  9. Rahul Dravid
  10. Cousin
  11. Kiran Karnik

The RT participants wanted to have a conversion of variety but related topics such as:

  1. Product Strategy for Go To Market (GTM) , especially globally
  2. Increasing product adoption
  3. Scaling UX and Selling in Indian markets
  4. Process for validating ideas
  5. Feature prioritization process
  6. Product globalization
  7. Implementation of Product Management practices
  8. Product Management in Start ups
  9. Product Management best practices
  10. Scaling operations and Product Management

After some deliberation the participants were divided into two groups:

  1. GTM (Mentored by Aditya Bhelande, led by Sandeep Todi and Nitin Seth)
  2. Product Management processes (Shrirang and led by Gaurav)

Each group got approximately 1 hour to discuss on the following lines:

  1. Define problems
  2. Measure problems
  3. Analyze key issues
  4. Provide specific examples
  5. Recommendations / Solutions

After about an hour leaders from each group shared their discovery with all the participants. Here’s the summary:

GTM:

  1. Issues:
    1. Scaling globally
    2. Customer segmentation and market validation
    3. Spreading product awareness
    4. Customer discovery
    5. Creating trust with global Customer
    6. Solutions

Market Discovery

  • Better analysis of user  / customer traffic and leads
  • Competition presence
  • Availability of infrastructure for product usage
  • Language and cultural differences

Customer Discovery

  • i.     Web PR
  • ii.     Blogs
  • iii.     Local community

Building Credibility

  • i.     Local presence
  • ii.     Local employees / consultants (for example using commission junction (cj.com) or shareasale.com)
  • iii.     Travelling and attending conferences
  • iv.     Customer case studies and having customers talk about the company

Product Management Process:

  1. Problems:
    1. Prioritizing features
    2. Poor UX
    3. Lack of cross functional collaboration
    4. Lack of Product orientation
    5. Managing roadmap
    6. Solutions:
      • When changing feature priority think about why. For example are you changing the feature priority to get a new customer or to retain the existing customer?
      • Create a balance between time and resources. Consider the impact of cost of change in direction. If a feature if 3/4th done, then are you better of completing the feature before changing the direction. Are you willing to give up that work that has already been done?, etc
      • When adding new feature think about technical challenges such as scalability and Customer facing issues such as performance impact.
      • Analyze if the feature is merely ‘gold plating’ or helping get new business.
      • Ask ‘Why’ to get a deeper understating of the customer / sales need to set the priority. Try to understand the impact of not building the feature.

These were some of the key take aways for the RT group that came from a very lively and engaging discussion. The group decided to meeting once a month to talk about various topics other than Product Management such as Sales and Marketing.

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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!