Expect a Microsoft, Google or facebook out of India? Won’t happen unless we THINK BIG!

When VCs from the US flooded into India about 5 to 10 years ago, they were expecting to invest and make happen, a number of Microsofts, Google and facebooks!

They ended up buying shares of existing public companies and became more of Private Equity investors rather than VCs who could put in a 1$ in 100 companies and have 5 block-busters like facebook or Google that returned $100 each! That’s the nature of Venture Capital – taking risks on 20 companies so that one becomes facebook or Google or Microsoft and makes up for all the losses in those 19 other companies.

This is as much an indictment of Indian start-ups not being bold enough as much as VCs turning into Private Equity investors. They did not find enough companies that were bold enough or thinking big enough!

First, some disclaimers! If you are building an Indian version of a successful US company or targeting a unique vertical in India with your SaaS or Cloud solution or trying different Consumer plays, all success to you! You can still be very successful and thrive!

This is not an indictment of the Software Services business! It helped enormous numbers of Indians stabilize and improve their lives and others that depend upon them, building a huge economy around them. But we need to move to the next stage. The thinking needs to be different this time. When the first services companies like Infosys, Tata Burroughs and Tata Consultancy Services started, you needed lots of  money to buy mainframes and minicomputers. Today, it does not take the same amount of resources to get started in the software business. The only thing that will make a difference now are Innovative Ideas!

This article is for people who wonder what it takes to build a global blockbuster like facebook and Google!

That has to do with NOT THINKING BIG ENOUGH! It does not mean just doing products for the Global Market or going for a huge blockbuster IPOs! That may come later. It has everything to do with going after BIG problems. Big What-Ifs! Big Experiments, Big Thinking!

This has to do with our general instinct to jump too quickly into “how do I make money” and risk aversion and the inability to postpone these questions and address some fundamental problems and find innovative solutions for them, not thinking about immediate payoffs!

Opportunities are everywhere if ONLY we stop being followers and start being leaders! In Consumer oriented startup companies, everybody is still dealing with information – work and social in many different platforms – smart phones, laptops, desktops. They are trapped in multiple formats that are incompatible with each other and causing endless frustration. Documents, status updates, photographs, videos, spreadsheets, presentations, databases are all still in many repositories leading us to waste enormous amounts of time just shuffling all of this!

On the enterprise side, Cyber Security is still a large, large problem! Nuclear facilities, Utilities, Government systems of every kind are subject to Cyber Terrorism more than ever before!

Companies are moving rapidly to the cloud; cloud security is even more scary than internal systems that can be cutoff from external access if someone suspects break-ins. Credit card information and online banking have only led to even less secure places to handle money.

Two days ago Amazon Web Services in Virginia ground to a halt because a monitoring system developed a memory leak and brought many, many companies’ servers to a grinding halt for hours!

Backups and Disaster Recovery are still problems that many enterprises have not found good solutions for yet, globally! There are technologies like Cassandra databases that can have three or four copies of the database automatically synched and updated. No need for backups – they are already backed up in real-time in multiple locations. You can almost build indestructible computing if you wanted to, if you choose cloud resources in multiple geographic locations, even across continents. The video streaming service NetFlix already does this with databases synched up across the Atlantic between US and European Data centers of Amazon!

Companies are just getting into collecting lots of Big Data – social media mentions of their companies, products, detailed information about what every visitor to their websites and online presences did when they are there and wondering how to use all of this information with customer and order information they already have in traditional database systems.

All of these are BIG PROBLEMS begging for BIG THINKING!

When Thinking Big, pick any of these above or other problems, they could lead to the next Microsoft, Google and facebook! It requires an obsession with ONE of those problems and a relentless drive to solve that, first.

When you solve big problems, you don’t need to worry about sales, investors and global blockbuster status. They will come as surely as night after day and high tide after low tide.

We have a tendency to equate technical knowledge, prowess and hacking with success. In software services they are important. But not elsewhere in the software business!

They are important tools but not your mission when it comes to building fast growing, large companies. You need to address problems and create innovative solutions that have clearly identifiable benefits. The benefits are the only things users care about. They do not care about Java or Python or Oracle or MySQL. They have a problem; do you have a solution?

The thing that is holding us back is our own thinking! Getting out of that box is the first step towards THINKING BIG! Thinking big takes the same amount of effort as thinking small but the payoffs are disproportional.

Think little goals and expect little achievements. Think big goals and win big success – David Joseph Schwartz.

Pallav Nadhani’s list of Top 10 mistakes entrepreneurs make…(Part 2 of 2)

Pallav Nadhani, CEO and Co-founder of FusionCharts, was just 17 when he started the data visualization product company in 2002. The company today is one of India’s most successful product stories and happens to be one of the first Indian start-ups to have caught the eye of the Obama administration. FusionCharts has a user base of 450,000 across 118 countries, and the company celebrates its 10th year of existence on October 22, 2012. In the second half of a two-part interview with pn.ispirt.in, Pallav Nadhani tells us about keeping a product relevant in the constantly evolving market, how he communicates with team members and what it’s like to work with teams from two very different cities in the country! 

This is part 2 of the interview titled – Find out what inspired Pallav Nadhani to start FusionCharts on their 10th anniversary.

How do you manage to keep your product relevant in the market? How do you keep yourself in the game even after going through the process of scaling and maturing? Usually after this it’s a case of either re-birth or death, right?

For us a couple of things work well : there are nearly half a million developers out there who use our product, so we get more feedback than we can sometimes handle and implement. This is huge repository for us to understand where the market is going. There are some developers out there saying in a few months or few years we see ourselves using the product this way so we require this functionality. So there’s a lot of consolidated information that we get from both our existing clients and prospects, and we add some amount of research and gut-feel to this so that we can improve the different versions.

If you had to pick three functions in the company which are critical for a product company like yours, which ones would you choose?

I’d choose engineering and marketing together first. In our case, marketing and engineering go together because the value proposition and positioning done by the marketing team is done in consultation with the engineering division. Similarly, right from day one of product development, marketing defines the product features such as labels so there is a lot of interaction. I would choose the support function next, because ours is a B2B product so implementation does require some amount of support.

What are some of the tools and techniques that you use internally to keep communication alive? What are some the things that you do keep communication going right from the top to the most junior most employee?

The advantage we have is that we are a really small company — we have a team size of about 60 people. So anything that’s happening gets communicated within the team quite easily. The next advantage that we have is that most of the team is based in Kolkata, and I like to say that the Kolkata team is more like family because of the inherent nature of the city! In terms of messaging, We’ve divided teams into functions so if a team needs to know something, we tell the team head and the trickle down effect just ensures the right communication. All the heads are supposed to involve their team members, and this is relatively easy because there are only four to five members per team. Then we have layers of communication protocols built over this, so engineering has its own system which is visible to everybody within the team. For cross-company communication its either face-to-face or I send out an e-mail — since this is quite rare (like once in three months), people do read them. I also ensure that I ask a question or engage the reader somehow so that I know who is involved. We also use Yammer, the enterprise social network. Another thing we do is celebrate birthdays, so this becomes a one or two hour event which does involve some discussion.

How do you manage the culture difference between Bangalore and Kolkata? Both the cities and their people are very different — Bangalore is more fast paced and Kolkata is not like that.

Like I mentioned, I tend to say Bangalore is the team, Kolkata is family! There are some inherent challenges : when we brought in some senior management in Kolkata there were some issues as most people were used reporting to me and suddenly it wasn’t the case anymore. Now the senior management is trying to put in more systems and processes so that that Kolkata team can work more professionally! There was some resistance, of course, but once they were able to see the value of the changes then things changed. Now there is data to react to, and today they are able to pin-point where things went wrong and fix it. Overall, I’ve not had any major problems. Initially, for the first six months I had to go to Kolkata once every week to act as a mediator. Now I go once in six months so I guess that really shows how far we’ve come!

So FusionCharts has now matured and you’ve been in the business ten years — what are the nuggets of information you’d give product company entrepreneurs out there?

There is nothing thats right or wrong. It depends on the context of the product your are building. A few things that you need to get right are even if you are a developer, you need to focus on packaging your product. Packaging and marketing has an important role to play as no product can really be sold on it’s own — there are only exceptional cases like popular apps which get downloaded millions of times. Team building is another important thing — once your product starts getting traction, your company will get split across so many different functions that you will require help with this. You’d like to believe that you can solve every problem, but it’s not very scalable. Specifically in India, an entrepreneur requires a lot of focus. If there’s a new product idea every week and there’s no focus on one thing, it can disastrous. For the last ten years, we’ve just focussed on data visualization — despite the audience we have and despite our capabilities, we’ve not ventured into other areas  because we know that this particular category has a lot of scope and if we branch out into too many other things we won’t be very good at any one thing.

What is the leadership style that you employ? What do people typically have to say about your leadership style?

I would say mine is more of a laissez-faire style of leadership. It’s very different from the concept that people are not trustworthy. I prefer not micro-manage — I believe in giving people work and a broad outline and let them go about it. At the end of it I’ll tell them how I feel about what they’ve done.

Pallav Nadhani’s list of  Top 10 mistakes entrepreneurs make

  1. Not delegating early and enough for the fear of things not getting done correctly
  2. Hiring senior people who don’t fit and have different expectations and lesser hunger
  3. Not setting culture right – focus is more oriented towards result, than behavior. Also setting unreasonable deadlines which set the wrong culture.
  4. Using the same team to deliver multiple products – bandwidth bottleneck
  5. Not establishing clear communication channels and ownership between teams when moving from generic team members to specialists.
  6. Not getting enough exposure locally for hiring — like the first 4-5 years I lived a cocooned life in Kolkata.
  7. Not bringing in a sales team early — they bring in more deals to close and also free up your time
  8. Losing focus in between — too many products and extensions
  9. Not saying ‘no’ enough to many employee and customer requests
  10. Building custom additions for a few customer along with the main product — upgrade issues.

Your neighborhood mom-and-pop Shop is an SBI Branch, thanks to EKO

It is not a usual day if Bill Gates pays a surprise visit to your office. And if the Microsoft Founder spends two hours understanding your business and your product, you might be onto something with a potential to change the world. Hence, the ProductNation team caught up with the Co-Founder and CEO of EKO – Abhishek Sinha – to find out if the World had indeed changed since the Gates visit.

ProductNation: Abhishek, thank you for speaking to Product Nation. Please share the story of your entrepreneurial journey.
Abhishek Sinha: After completing my engineering, I joined Satyam in 2000 and was posted in Hyderabad. Following the usual onboarding and training; I was deputed to Jaipur to work on assignments at couple of mobile network operators. I was never great with coding, however, it was on these projects, that I met Abhilash with whom I co-founded my first company – 6d Technologies.

There was no detailed business plan, we just wanted to do something on our own and since we were in the mobile space, we decided to hit it out by offering communication solutions to Mobile Network Operators through 6d Technologies. At that time, we were pretty much newbies, no family or home pressures. So it was manageable to do all this crazy stuff.

As we went about building 6d, we were on the ropes most of the times. It was a deal that we got from Oman that swung our fortunes. I still remember the generous credit line that our travel agent offered us. For some reason, he believed in us more than we did on ourselves. So this is how, it all started happening for me.

ProductNation: Wow. Thanks for sharing, Abhishek. Who inspires you?
Abhishek Sinha: (In a Snap) – Mahatma Gandhi. I am also encouraged by Dhirubhai, Google founders, Mark Zuckerberg and Flipkart founders. Gandhiji certainly has been a huge inspiration.

ProductNation: Tell us about EKO. How did you start? Why the name?
Abhishek Sinha: Abhinav (Co-Founder & COO – EKO), my brother and I were in Bangalore. We saw a number of people approaching a nearby shop to recharge their mobile phones. Perhaps, oblivious to the shop owner, there was a sophisticated m-commerce transaction happening, right there. It was this exchange that prompted us to think about EKO with the objective of providing financial access to the unbanked. So I left 6d to build EKO.  As far as the name is concerned, it stands for “Echo” and luckily we managed a shorter form.

ProductNation: Please tell us about your customers and your future plans with EKO.
Abhishek Sinha: Our initial market was focused towards Delhi-NCR, Bihar and Jharkhand. We have expanded to 11 states in the country. Importantly, this financial year we are expanding to Mumbai, Hyderabad, Kolkata and industrial areas in North India – Baddi, Ludhiana, Amritsar, Panipat, Sonipat, Murthal, Jaipur, Kanpur, Lucknow among others.

Over the last one year, the model has matured and stabilized. Since June this year, we are adding in excess of 200 outlets per month and should close this year with more than 5000 EKO outlets. The idea is to increase our presence and be a dominant player in the domestic money transfer space. Money transfer segment is attracting tremendous interest from the unbanked population. Moreover, fungibility provided by EKO is fueling it further.

ProductNation: Abhishek, what have been you BIG lessons in your entrepreneurial journey? And what would you like to share with other young entrepreneurs?
Abhishek Sinha:  People say that you should not repeat mistakes, but I must confess that I have repeated mistakes. It takes a lot of time to understand and comprehend that you are committing and repeating mistakes. It takes a while.

The advantage of starting young is absolutely unmatched. Start Young. The naivety and foolishness helps. It is important to persevere and consciously exhaust ones options to loose. At 6d, there were situations when survival itself was at stake and such episodes would worsen the family pressure to get back to a job. However, doing my own thing was and remains my identity, very thought of going back to a job would make me shudder. I thought I would lose my self-respect. I was very conscious that I must exhaust all my options to lose. One has to increase their stakes substantially. One has to be continually hungry.

I never thought in college that I would be an entrepreneur and start a company. Even five years ago, if somebody had told me that I would have to raise tons of money to get this company started and bring it stability, I would have never started. I had no experience of a consumer-facing or payments business. Sometimes following your heart and taking the plunge without analyzing, helps. With EKO, we lost money and we could have gone down-under but I had to take my chances. There is no harm in facing failure. The loss due to failure is measurable, but the gains of success are gratifying and limitless. This is what I have experienced in my last ten years as an entrepreneur.

Product Nation: Abhishek, very profound insights indeed. We wish you and EKO super success.

Find out what inspired Pallav Nadhani to start FusionCharts on their 10th anniversary.(Part 1 of 2)

Pallav Nadhani, CEO and Co-founder of FusionCharts, was just 17 when he started the data visualization product company in 2002. The company today is one of India’s most successful product stories and happens to be one of the first Indian start-ups to have caught the eye of the Obama administration. FusionCharts has a user base of 450,000 across 118 countries, and the company celebrates its 10th year of existence on October 22, 2012. In the first part of a two-part interview with pn.ispirt.in, Pallav Nadhani talks to us about what inspired him to start FusionCharts, the importance of marketing in a commoditized industry and how the company believes in training and retaining its talent.  (Don’t forget to download the Free copy which has the complete story of FusionCharts)

Pallav, congratulations to your team and you on FusionCharts’ 10th anniversary. We’re curious to know — when did you decide that you wanted to get into the product space and start a company? What was your inspiration?

I call myself an accidental entrepreneur for a reason. When I started thinking about FusionCharts, I had no idea I was going to develop a product or even run a company. It was something I wanted to do for pocket money! In 1999, I was in Class 11 when I came across this site that accepted innovative articles on technology. By then I had already done a bit of coding (there’d been a computer in my house since I was eight years old) and I was using Microsoft Excel in school, and I hated the boring charts that the program created. I thought — why not convert those boring Excel charts into a lively format for the web? So I wrote some code, and then wrote an article based on that code which got picked up by a website called ASPToday.com. I got paid $1500 for the article which is a lot of money when you’re 16! I got a lot of feedback from developers on the article, and it got me thinking: if so many people were interested in the concept and were giving me inputs, why not consolidate all the modifications and start selling the concept as a product? So there was no market research as such. However, I did make a clear-cut decision when it came to choosing between developing a product and a service: despite the fact that I had some experience working in a service model (I worked in my dad’s web design firm), I knew that there were problems like working with only one client at a time, and the fact that people didn’t trust you as a 17 year old! So for a while my dad fronted me: he would bring in the clients and I would do the work.

 

In a product company there are guys who develop and then the guys who package, market and sell the product. Traditionally, in the services model it’s the developers who tend to take center stage but in the product space people usually say it’s the marketing which makes the difference. What’s your take on this?

I absolutely agree. When we set up FusionCharts we were very aware of the fact that we were going to be operating in a commoditized world. Our top five competitors are amongst the biggest companies today: Microsoft, Yahoo, IBM, Google and Adobe give competing products for free and there are others who also offer charting libraries like ours. On an average, our product is 10 to 100 times more expensive than our nearest competitors. Still, we’ve grown in this fiercely competitive market, and this is not just because of our product: it’s because of our positing, our story telling and the whole packaging. Other products out there directly appeal to developers who often have limited budgets when it comes to purchasing components — but our approach involves appealing to the level just above the developers who are often the decision makers and this has worked well for us.

Much of a product’s success relies not only on quality of the development but also on the kind of people who are part of the team. You have guys who are hesitant about joining a smaller setup because they are worried about stability and are unsure about joining a place which gives no guarantee whether it will exist the next year or not.  What’s your strategy when it comes to hiring good people?

The only time when we found trained talent is when we shifted to Bangalore, but this was for the middle management level. We’ve found it quite rare to find ready-made talent at the development level. At this level, almost everybody who is on our team has come to us fresh out of college, and have been trained by us for anywhere between 12 and 36 months. We’ve trained them with the approach of building the product. This is important because one of the issues we had with people who came from bigger companies was the difficulty they had in adjusting to the fast and agile environment of a product company like ours. So we decided it would be better to concentrate on hiring high intensity guys, giving them some light projects to work on and training them so that they’d be good to go in a couple of years. This also helps create a sense of loyalty because we’re taking them on board at a very early level in their career and this means we have a lower attrition rate.

You make a very valuable point. So what do you feel about the fear in the market about spending time training freshers and then watching them jump ship after spending about two years with you?

I look at it as an engineering challenge: if a guy is willing to move to the competition, what are the incentives that he’s getting? Nobody moves from a product company to a services company purely because of the type of work. Sure, some companies sell to employees just like they sell to customers and the employee may want to opt for a bigger brand name but this is often at the cost of his or her engineering lifestyle. What you do at a product company like ours is something that you can talk about to your friends, you know where your code is going, you have a complete idea about the product and you can proudly point out what your contribution is. In a large organization this is not really the case, and often you don’t have a clear idea of why you are writing a certain piece of code, and you may not be able to talk to your friends about what you do because of confidentiality clauses. Whereas here, you’re given a problem statement and given the freedom to figure out how you want to approach it. Then there are things like the US President Obama selling FusionCharts in 2010 to design digital dashboards for the federal administration. These things inspire confidence in employees, and give them a level of satisfaction. So the employee has to make a decision if this is something he or she wants to give up, as well as give up working with a team he or she has grown comfortable with.

Read the second part of the interview where Pallav shares the list of Top 10 mistakes entrepreneurs make…(Part 2 of 2) 

A great product ends up creating its own market by typically disrupting an industry or creating a new one – Archit Gupta, ClearTax

Here’s an interesting story about a young entrepreneur who put his personal life ahead of cool, calculated business decisions and went on to create a very successful IT Products Business.

Going back in time – background

Archit graduated in Computer Science, from IIT Guwahati and a doctoral level programme in the same subject thereafter, from Wisconsin University. The inherent brilliance and appreciation of things technical, was always there. This story is about taking all this, harnessing it and shaping a model which has all the trappings of a sound product.

A chanced paper publication and presentation thereafter – on network storage and efficiency – earned him many laurels, the least among them being offered a job in a start up, the brainchild of an equally brilliant professor from Princeton. Archit became part of a Core Engineering Team, which positioned the company in its own niche space. A solid reputation built on strong execution capabilities, was what this team epitomised. He put in a two-and-a-half year stint, and later on the company was later taken over by another Fortune 500 Company, EMC. By this time, the spirit of entrepreneurship had germinated inside and was beginning to take shape.

It was in late 2010 that he was faced with a peculiar dilemma – whether to stay back in the Valley or return to India and start off on his own. Personal reasons outweighed business instincts, which necessitated a move back to India. By then, the decision of going the entrepreneur-way was already taken. It was now only about that – what, and when. Having a father, who was a partner in a large CA Firm, helped in sharpening Archit’s laser-like focus and identify addressable gaps in a market dominated by the Chartered Accountants.

The Idea

The existing products (filing of returns) in the Compliance Space (Taxation) weren’t very good and there was a huge potential to design a better product by introducing an Americanised approach to solving bandwidth issues – offer a cloud-based solution. The CA profession has often been cited to be traditional in its approach, and this product which was conceptualised, was doing just the opposite. Break the traditional way of thinking. It offered a platform based product, leveraging future technologies, like SaaS based models on cloud or even build mobile applications in the times to come by. These were the early days of Clear Tax – simple to use and largely influenced by a product called Turbo Tax, from US. A major game-changer was about to enter the market.

The Product – ClearTax

It is not just a rudimentary e-return filing software, but designed to also educate the user and help him / her make informed decisions. Today, the bulk of users are in the Consumer segment but a drive is on to gain larger share of the pie, in Enterprise space too. The company has tied up with Institute of Chartered Accountants of India (ICAI) and leveraging this to build strong networks in the user community. Initially there were teething problems of migrating from desktop based applications to a cloud-based one but surprisingly the adoption has been very quick. Presently, the penetration has been in the top 8 -10 cities in India, which means there is a huge potential for growth, in untapped markets.

An Excel sheet based tool provided by Income Tax Department has captured about 40% of the market share and the balance is fragmented, which is where ClearTax operates. In terms of usability and many other critical functionalities, ClearTax is way ahead of even the market leader. On-line filing has been made free for women, which in a way is giving back to the community.

The enterprise segment is what will bring in margins and needs to be penetrated with precision. Reaching out to SMBs is a daunting task. Considering their size and nature of operation, the focus of entrepreneurs is really running their day-to-day show. They are too busy in doing what is their core activity – trading or manufacturing. Not being tech-savvy either, puts an additional pressure on marketing such products which are Internet-driven. The earlier adopters of ClearTax were Chartered Accountants, who in turn promoted it aggressively within their own community. It was also recommended by CAs to the SMB business. Otherwise through traditional advertising route, it is a very costly proposition.

The Product Eco-System and what it takes to succeed

A good product is something which users want. Of course, not all user desires are desirable (say recreational drugs for instance), so when we talk about a good product, it has to be consistent with the founders’ value system.

For success in the market, there are other factors at play :

  • The size of the market has to be sufficiently large for the startup to be able to deploy sufficient engineering, sales and marketing resources, for its success. Software Products interestingly can attack large adjacent markets, so this is something a startup doesn’t necessarily have to worry about when they start creating a product.
  • A great product ends up creating its own market by typically disrupting an industry or creating a new one.
  • Marketing: There is a lot of noise in the market place. Users have to be convinced to invest time/money/effort into this new thing. This requires very good marketing.
  • A good product comes with incentives for its own growth in the marketplace.
  • Good Engineering: Less important in the beginning, but becomes very crucial as the product gains traction.

Incumbents and competitors have to be out-executed.

We signed off with Archit Gupta, Founder of ClearTax, a very successful IT Product in its domain. The spirit of entrepreneurship is oh-so-intoxicating. Entrepreneurs are essentially dreamers who have the ability to make others believe in their dreams.

Here’s wishing the team at ClearTax a great year ahead.

The future is bright for product companies, Vishnu Dusad, MD, Nucleus Software

Vishnu R. Dusad is one of the founders of Nucleus Software Exports Ltd, and is presently the company’s Managing Director. An alumnus of IIT-Delhi, Mr.Dusad’s vision and passionate belief in product development has helped establish Nucleus Software Exports Ltd as a leading, global software product company. His experience spans areas of software development, creation of strategic alliances, business development, and strategic planning. In an interview with pn.ispirt.in, Mr. Dusad talks about why Nucleus Software Exports Ltd ventured into the product space, transitioning from a services company to a product company and the importance of family support for entrepreneurs

You started Nucleus in 1996, at a time when the flood was to get to the US and provide software services. You went against the tide and concentrated on doing something in products. What caused you to go for this differentiator – why did you get into products?

The whole world at that time was talking about how no products were coming out of India and this was something that was a point of concern for me. So initially we got into this space to demonstrate that India can create world class intellectual property, and that’s what drove us into this direction. At the board level, we took a very conscious decision that despite the fact that the trend was to concentrate on providing services outside the country, we would not have any revenue coming from this area because it would divert our attention from the focus on products.

So one factor was this conscious decision to do something different – but then why choose financial services?

This was actually coincidental because we started Nucleus Software in 1986 and for a good six or seven years, Citibank was our only customer. So we felt that this gave us a good understanding of the banking and financial services sector, and it felt like a good idea to stay in that domain and build a product.

The risk factor at that time must have been high, so what was your mind-set at that time?

You’re right; the risk factor was very high. We came out with an IPO, where shares cost 50 a piece and soon after — thanks to our product focus — our revenues fell to a share price of 9! We were not used to the stock market, and we did feel bad because of the huge risk we had taken. However, at the same time we were confident that we could do a reasonable job in the track we had chosen. There were a few weak moments when we had doubts in our minds, like the time when we lost an order for an account we had pursued for nearly seven months. At times like that we questioned if we were doing justice to shareholders’ money, but we felt we had the spirit to make things happen.

After six years of having Citibank as your primary customer, you took a call to do product development and you probably had to undergo a major shift in thinking internally. How did you tackle the HR factor – how did you get your people to re-align to a product development methodology? Or did you get a different team in place?

I would say that both things happened: we brought in a separate team who was oriented towards product development. That team started working on new products, independent of our services revenue. In terms of our services team, we thankfully were never into the business model where we worked according to x number of people multiplied by y hours per person per month – we were always into projects. In fact, we were already used to taking on fixed-price projects right from 1991 – 1992. So we were confident about making the transition into a product company, because our services team was halfway oriented with achieving something within a limited time frame. To make sure that the customer was always deriving business benefits out of the work we were doing, we never talked to technology teams alone. We were always talking to the business team also. So to align the entire company around product development wasn’t very difficult.

How did you manage talent in those days? Did you have to invest a lot in terms of re-training them?

For hiring talent, we went to places like the Delhi College of Engineering and BITS – Pilani. I would say re-training wasn’t such an issue because thanks to our business practices and opportunities, we’ve had a whole lot of people who stayed with us for a decade and more. This helped us ensure that domain and business knowledge was retained within the company, and could we could preserve the shape of the project.

As a company who focused on aspects like cash-management and products around core-banking loans, there was competition on the landscape. There were other smaller niche players like CashTek, as well as Citibank’s own captive business in the country. So was competition ever a concern or did you feel the pie big enough? How did you tackle expansion?

Around the time our product was ready, we were already aware that our existing competition were running their own product. We did fear that the market wouldn’t be big enough in the country and that we’d have to go overseas – but we were wrong. Surprisingly, when we bumped into one of our earliest customers at a conference and we showed them our product, they started asking “Where were you all this time?” So this gave us the perspective that there was definitely a sizeable market, and we didn’t have to be unnecessarily concerned.

In terms of growing the company, we recognized that the existing team comprised mostly hard-core techies, so we brought in sales people to join the team. Initially, we were worried that to drive sales they would need to have an exhaustive understanding of the domain and the technology – but again we surprised to find that it was not such a big challenge. We then started participating in events, we started making cold calls and we were able to bid in the international markets. We started having MNCs signing up with is in India, who would be happy with our work and would recommend us to other companies and we’d get the next contract. This took us to the next level globally, and that’s how we built up the business. We didn’t hesitate in investing in marketing – as our services business continued to grow, we ploughed that revenue into the marketing.

There’s been a lot happening in the product development space, like a change in momentum and the development of the SaaS model. You’ve been a solid player in the market now so how do you see the future for product development? How do you see product companies going forward?

We believe the future is bright for product companies as long as they are committed to understanding the domain and are focused on providing meaningful solutions. There will be no dearth of market for companies like these. There is a lot of technological development happening, so it’s up to these product companies to leverage these developments on and on-going basis. This should be with the focus of using this technology for customers in your domain and continue to add value.

You’re an alumnus of IIT-Delhi, and there are a lot of companies today who are getting into the product space in the start-up category who are being led by CEOs from IIT. So in a sense, they are jumping straight into forming companies. Would you say this is a big asset, since they come already orientated with technology and create companies that offer a technology solution?

I would say that if you have a bent of mind which says that “I have to add some value to society” and you are passionate about it, then experience is immaterial. There are global brands which have been created by dropouts, or people who have just graduated. According to me, the only components that are required are the passion to make a successful product and the passion to bring value to customers.

You are an entrepreneur who took the plunge at a time when the future wasn’t very clear. Today, there are a lot of guys who are standing on the edge of this pool are undecided about whether they want to jump in or not. What are the things that you would advise them to keep their eye on when they start a product enterprise?

Depending on the age at which the individual is getting into the software product development space, family support is very important. This is different before marriage and after! This support may not be just financial, but also psychological. In my case, I was fortunate since I was not required to get a job and straight away start sending money home – I could choose to do whatever I wanted. I came from a family where getting into business was the thing to. So I am lucky to have a family who provides me with unflinching support. So this is one core component, in my opinion.

Another thing you need to have is the passion to make things happen, because you can’t afford to give up. There will be enough moments and situations where you will ask yourself, “Am I going to pass this hurdle or will I collapse on the way?” You need your internal support system to let yourself and everyone around know that you are going to deal with this. You also need to give this support to customers and show them your internal strength to inspire confidence. Go in with the intention to understand your customers’ needs and bring your technical (and other) capabilities to fulfill those needs. It’s natural to feel that when you have created something, customers are going to line up at your door but it doesn’t work like that. You need to find out what the pain areas are and what customers are excited about.

5 key take-aways from Vishnu Dusad’s interview

No products were coming out of India and this was something that was a point of concern for me.

To make sure that the customer was always deriving business benefits out of the work we were doing, we talked to both technology and business teams together.

Nucleus Software Exports Ltd.’s business practices and opportunities helped retain talent for considerable periods. This ensured that domain and business knowledge was retained within the company.

The future is bright for product companies as long as they are committed to understanding the domain and are focused on providing meaningful solutions.

The only components that are required are the passion to make a successful product and the passion to bring value to customers.

 

 

Towards a glorious product nation!

The biggest success of the IT industry in the country has also been its biggest challenge. The phenomenal rise of the Software services industry led by global leaders like TCS Cognizant, Infosys and Wipro and smaller firms like HCL, Mindtree, Zensar and Hexaware in hot pursuit has put India in pole position in the global IT services industry. Driven by NASSCOM with visionary leadership and full support from industry stalwarts, the services industry really gathered momentum towards the end of the last century and has never looked back since.

However many other industry segments have struggled to emerge from the shadow of the spectacularly successful services sector. Business Process Outsourcing looked like a rising star for some time followed by Engineering Services, Media and Animation and other sub-sectors but could not match the rise or the stature of IT Services. The Products industry too has had many good starts, but in a manner similar to India’s cricket openers these days, have spluttered too fast and too frequently. Barring a few successes like i-Flex, Tally and some products that germinated within the comfort of a services company, the product story from India has just not done justice to the energy enthusiasm and incredible talent that lies in this country.

There are many green shoots emerging in the hitherto parched product landscape that give us all hope that the story is destined to change and move towards a happy ending with a more focused approach to developing a new eco-system for the product industry. In the last few years, outstanding leadership of the product forum in NASSCOM and the very successful product conferences in Bengaluru have demonstrated the high energy that flows through the veins of the product entrepreneurs today. The opportunities too abound with the ubiquitous spread of the internet and cloud computing enabling “made in India” products to quickly expand their availability globally and Software as a Service enabling new methods of consumption and commercial relationships.

However mere enthusiasm does not create a product nation and there needs to be concerted efforts to build a sustained focus on the products industry. There is a need to work with this fledgling sector from the early stages of creating programs in Universities to build a product mindset to developing incubation centres and a more vibrant angel network that will enable thousands of start-ups to bloom. Since significant Government and corporate support for Indian products will also be needed akin to the support given in China to the local industry, serious efforts will be needed to educate the bureaucracy in Delhi on the very specific needs of the product companies so that enabling policies and programs are created and funded by Government.

The opportunity for the products industry to be a hundred billion dollars strong by the time India turns seventy-five in 2022 is very real but we will need to bring all the players together and build a strong platform to propel the industry into the stratosphere of global success!

Let the world know about your software product

LaunchPad

You’ve spent months and days and hours conceptualizing your product and then taking it to market. You’ve won the first few customers who are now stable and you’re thinking about what next…if you’ve achieved this, it’s time to show your product to the world.

The NASSCOM Product Conclave LaunchPAD is the place you should be to demonstrate your product and recount your journey from CONCEPT to REALITY. We’re inviting a select community to hear about you and your product. Won’t you come?

A day before NASSCOM Product Conclave kicks-off in Bangalore (November 6, 2012), we are pleased to host an exclusive interactive session with the media, blogger and analyst community where you have the opportunity to launch your new product and enjoy your moment in the spotlight. Last year we had some of the crème-de-la-crème of press attending the event and reporting it in the print and online media.

Who is eligible?
If you are an Indian software product company that has a software product in the market for at least six months and has at least one revenue generating (not beta!) customer, then you are eligible to participate. Apply for the Product LaunchPAD here before October 25, 2012.

What happens next?
NASSCOM shortlists eligible companies and informs them by October 30, 2012 Present your software product to the media at an exclusive event.

Publish a booklet containing information about your company and software product which will be circulated to the media and available online on the NASSCOM Product Conclave website. Opportunity to interact with a focused group of professionals and hear their feedback on your product.

Some of the folks who will help us short-list some great Products are:

Amit Somani, Arun Katiyar, Suresh Sambandam

Need further help?
If you need advice on how to structure your launch pitch or presentation, then please do let us know. Also we have many curated sessions at product conclave to help you take your software product initiatives even further. If you haven’t registered, then do so NOW!

See you at the NASSCOM Product Conclave – the place to connect with Indian Products Ecosystem.

 

Software Products Industry: Transforming India at Large

In my mind transformation is something that takes place when there is a significant change that happens and a whole genre of populace move from one condition or state to another. It is palpable, widely felt and very tangible right down to the grassroot level. One such occurrence that comes to mind is the Indian Railways reservation portal which was launched a few years back where millions across the country suddenly had the facility of bypassing greasy touts and getting a seat on a train of their choice in an honest way.

I believe another such transformation is already being felt. The phenomenon is criss-crossing the country like never before. Suddenly from the bylanes of Indiranagar and Koramangala in Bangalore and the swank office blocks of the NCR region, not to mention localities like Aundh in Pune and other such places, a breed of software product entrepreneurs are willing to stand up and be counted. But again, mistake me not, these entrepreneurs do not necessarily come from the Tier 1 and 2 cities (as demographers like to classify) but indeed from cities like Belgaum, Udupi and Bhopal, Agra, Jalandhar and Coimbatore and so on.

These new breeds of entrepreneurs are not those who have a blueprint in mind but have actually launched a software product of their own because they have identified a need in the market. These needs are not necessarily easy opportunistic needs that some early generation product companies took but those which require a sound architecture and robust package (including pricing) to positively influence the market. So why am I excited?

The first undeniable fact (and Zinnov says so, not me) is that there are about 100 million lives being transformed across 10 million SMBs in the country. To put this in another perspective, this is virtually like CK Prahlad’s “Bottom of the Pyramid”. While the software industry has been renowned for its transformational activities among the Fortune Global 2000 list, this is a bottom up revolution.

Secondly, these recently started software product enterprises offer job opportunities not far from “home”. What I mean here is that no longer will engineering graduates have to uproot themselves from hearth and home to travel across the length and breadth of the country to the large cities in search of employment. There is already evidence of companies in towns which have a population of less than a million who have demand for such skills.

Thirdly and most importantly, these software product companies have mushroomed because of a demand that has arisen from manufacturers. Small entrepreneurs, retail enterprises, cooperative banks and a variety of other organizations have made it a point to adopt best practices that once seemed to be the preserve of only the larger conglomerates. Efficiency is the buzzword down the enterprise chain and the attraction to software products has only become greater given that it is often available on a “pay for use” model. Very often the software could come bundled with the hardware at an even more attractive price. What more could a customer ask for?

Just consider this. If a pickle manufacturer in Jaipur can streamline his inventory and manage his complex distribution and invoicing using a software product that is made locally and sold on a SaaS model and for every kilo of pickle he retails he saves 20% of the cost because of efficiency and is able to achieve lesser wastage in the process because of better inventory management, then why would he not consider using local software that is easily accessible and where service is only a call away.

The transformation has already begun and there’s no turning back.

This is part of a series and watch out for the next one.

NH7 Launches Festival Guide Mobile App – Festivapp At #NAMA

NH7.in, the music streaming and discovery platform focused on independent music, has launched a mobile festival guide app called ‘Festivapp‘. The app was showcased at #Alpha, the product and startup showcase at #NAMA conference.

Festivapp is currently available as a free download on the iTunes App Store and the Google Play Store and allows one to discover festivals/events in India and attend them. The company states that these festivals can either be cultural, literary, music or a film festivals.

Registration: We tried the app on a Galaxy Nexus and noticed that the app currently allows one to login either through Facebook or Twitter account credentials, following which they are redirected to the app homepage, which features all the upcoming festivals in the country. One can choose a festival of their preference to browse through more information about it, including information like venue, genre, pricing and festival dates.

Festival Wall: In each of the festival listings, there is something called a ‘festival wall’ which offers a stream of updates being posted from that specific event. These updates include organizer announcements, updates from their friends, and event related updates syndicated from social networking sites like Twitter and Instagram. The wall also features a pull-to-refresh feature and has a countdown clock that counts down to the start of the festival in days, hours and minutes.

 

The app also allows one to post updates directly to the festival wall. We also noticed that one can either choose to make their updates public or private to their friends. It also offers an option to auto-share their updates on Facebook or Twitter.

Photobooth: The festival wall also allows users to upload pictures from the event. What’s interesting though is that users can add photo effects and virtual items to these photographs. The company saysthat these effects will be themed around the Festival.

 

Besides this, the app also features a slider menu which allows one to head over to any specific section of the event like announcements, schedule, artists, and travel information among others.

At the time of writing this article, we noticed that the app featured more options for NH7′s own events like NH7 Weekender, including the ability to buy festival tickets from within the app, check out nearby places including restaurants and bars, and find accommodation near to the venue. It also offered guides on things to do at the festival and around the venue. We hope that the company rolls out these features to other festival listings as well, in the future.

Original Post –

Why aren’t more developers creating serious Mobile App Products?

Mobile Apps

These are the times, when every third person that you meet in Technology world has an idea for an App. It could be every alternate person if you’re hanging out in geeky groups or among heavy Smartphone users.

The Industry trends suggest a phenomenal surge as well. According to Gartner, Mobile Apps Store downloads worldwide for the year 2012 will surpass 45.6 billion. Out of these, nearly 90% are free Apps, while out of the rest of 5 billion downloads majority (90% again) cost less than $3 per download. This trend has a strong growth curve for the next five years. (See Table 1. Mobile App Store Downloads, courtesy: Gartner) 

Another report suggests that 78% of US mobile App Companies are small businesses (based on the Apple and Android App Stores based research). The typical apps that dominate this market are games, education, productivity, and business.

Mobile App Store Downloads - Gartner 2012

This comes as no surprise. There is a huge divide between the Enterprise Mobility (dominated by the Enterprise Architecture, existing platforms and mobility extensions to the platforms that ensure business continuity) and End-User (Consumer) Mobile Apps dominated by the App Stores supported Small and Mid-size App Development Companies. The barriers to entry in the Smart phone Apps Market seem pretty low with the supporting ecosystem from Apple, Amazon, Google, and Telecom carriers.

However, let’s get back to the fact that majority of these Apps “do not” generate direct revenue.

While the entry seems without barriers, there are multiple hurdles on the race track:

1. Developers need to focus on the User Experience. The smartphone apps pick-up is highly skewed toward Apps that offer a good user experience even for minimal functionality. After the initial success, the App makers end up adding functionality for sustained interest, but the User Experience tops. It’s difficult to focus on UX while still trying to do everything right at the underlying architecture level for long term.

2. Marketing is important. Getting the early eyeballs is key for the App developers. Any serious App needs an immediate initial take-off, and among the things that they need to do to make it happen is to market the App beforehand and to get the authoritative reviews in place.

3. Initial Take-off is just the first hurdle. App needs to be able to handle traffic bursts, it needs scale with increased traction, support virality & social connects inherently, and also build an effective User ecosystem. None of these may seem like the core functional features of the App, but are most critical for the broad-based success.

4. The Freemium model is very popular, but it can kill the business if the marginal costs are not sustainable. The paradox of the Free model is that unless the 10% paid users are able to pay for your 100% costs, every additional user takes you closer to the grave. With this come in two questions – how do you keep the infrastructural costs low, and how do you build additional revenue models around the app.

  • IaaS can solve some of the infrastructural headache, but doesn’t provide you with the other functional layers that every App needs. You need to still build them. PaaS providers provide the scalable platform for building Apps, but you still need to build some of the functional features such as Gaming Rooms support, Messaging, User Authentication & authorization models, and so on. Mobile developers are still doing a lot of repetitive work across the smartphone Apps that can be consolidated into a framework.
  • Supporting the additional revenue models require integration with external Ad-services, Payment systems and more importantly the bandwidth to deal with this even more fragmented set of agencies.

5. The End-point device platforms are fragmented and getting even more so. A typical model for App developers is to develop an Android App, iOS App or a Windows App and then support the other platforms as they go along. However, keeping up with these multiple platforms is only getting more and more difficult with the speed with which Apple, Microsoft, and Google keep rolling out the OS. There’s tremendous pressure to release the App within the 1-3 days window of the release of the underlying platform.

Hence, while there are millions of people developing smartphone Apps as we speak, there are only a fraction that get built at serious level, and even smaller fraction that gets built for sustainable business success.

And considering these hurdles, the arrival of the Backend-as-a-Service (BaaS) is a blessing for the App Developers. Forrster’s Michael Facemire refers to them as “The New Lightweight Middleware”. He goes ahead and lists out some of the basic tenets of what makes a Mobile Backend as a Service, but I see this list evolving as the vendors offer more and more functionality to the customers leading to en ecosystem.

And the term “ecosystem” is going to be the key. That’s because a successful mobile App doesn’t stop at the user starting the app, using the app, and leaving the app. A successful App creates an ecosystem for the viral growth, user engagement, social functionality, in-built broad-based connectivity for multi-user interactions, and more importantly the ability for cross-platform usage. In a Gaming scenario, the user interactions and the relevant immediate feedbacks are paramount. Most successful apps build an ecosystem. Instagram, 4Square, Pinterest are the common household examples today.

ShepHertz App42 Cloud API is complete backend as service to help app developers develop, buid and deploy their app on the cloud.While Michael lists out the usual suspects in his post, most of them in the Silicon Valley, there is a very interesting player in Shephertz’s App42 platform, right here in India. The ecosystem approach that they have taken seems pretty much what may be required for serious app developers that need a robust backend provided as a service, so that they can focus on the app functionality, user experience, and more importantly the marketing aspects of the App.

Now why, still, aren’t more and more developers building even more serious mobile App products? Why shouldn’t they be? I think, they will!

Autodesk Acquires Qontext Social Collaboration Platform.

Acquisition to Expand Social Capabilities of Autodesk 360 Cloud Services.

SAN FRANCISCO, Oct. 4, 2012 — Autodesk Inc., (NASDAQ: ADSK) has completed the acquisition of Qontext,enterprise social collaboration software, from India-based Pramati Technologies. The acquisition of the Qontext technology and development team will accelerate Autodesk’s ongoing move to the cloud and expansion of social capabilities in the Autodesk 360 cloud-based service. Terms of the transaction were not disclosed.

“Autodesk’s acquisition of the Qontext technology is a testament to the Pramati strategy,” said Vijay Pullur, Pramati president. “This transaction is a significant milestone in our ongoing efforts to incubate and build companies that address the rapidly changing needs of business through highly innovative technologies.”

Autodesk intends to use the Qontext technology to add new social capabilities to Autodesk 360, a cloud-based platform that offers users the ability to store, search, and view critical design data improving the way they design, visualize, simulate and share work with others at anytime and from anywhere.

Read the complete story here

Jalandhar School Kid drops University builds a Global Software Product Company

NASA.GE. Disney. A global software product – Kayako. Jalandhar – a growing city in Punjab,India. And a school kid who opted out of University. Sounds like the script of the next “The Social Network” hollywood movie. The truth – the movie might have to wait. Because this success story from India’s hinterland is only getting started.

And yes the school kid who was only seventeen in 2001 at the time of launching this enterprise helpdesk product is still leading from the front as the Founder and CEO.

ProductNation is excited to bring to you this riveting story through a heart-to-heart talk with Mr Varun Shoor. A lunch interview was quickly planned and Varun suggested “Punjabi By Nature” at Cyber City Gurgaon.

On interview day, we met at Varun’s swanky 16th floor office at Cyber City Gurgaon that houses the product engineering team. RFID check-ins, Apple Machines, top of the line interiors, extensive use of glass and a panoramic view of Gurgaon would be some add-ons if you consider employment opportunities here. After exchanging pleasantries and a quick discussion on the quirky weather, we did a quick jaunt across the road to the “Punjabi By Nature” restaurant.

Raghav Arora – Varun’s schoolmate and core member of the Management team also joined in. A quick scan of the Menu slate (yes, it is a wooden slate) and we were sorted with our orders. It was time. 1-2-3 Action!

ProductNation: So Varun, we are eager to listen to your story.
Varun Shoor: Right from childhood, I was a geeky kid. None of my sister’s electronic dogs survived the second day. My dad felt that if I went to a hostel, some sense would dawn on me.

At the hostel, I saw computers for the first time. 286, DOS, monochromatic display and there I learnt the programming language LOGO where in you draw shapes by issuing commands. That was fascinating. The first four years in hostel, I used to hungrily look forward to the Computer Class each day and excelled with 90% marks.

After I came back from hostel I asked dad for a computer. This was 1996. Fortunately, my dad could afford one. It was a Packard Bell 286 with Windows 3.1.

Back then there was no internet in Jalandhar, only in Delhi and metros. Luckily there was a cyber café in Jalandhar which used to dial out to Delhi. I used it to look up the latest apps, download them. Fascinating it was, especially the noise of dial up and Rs 15 per minute internet charge.

We all burst into a nostalgic laughter. If you are wondering why, then your association with the Internet is at best recent.

ProductNation: Please continue
Varun Shoor:  Sabeer Bhatia then had sold off Hotmail. That was when I decided to start a web design firm – Cyfox Graphics – using Dad’s card to buy a domain name – domains were US $ 100 then and web hosting. But as I devoted more time to computers, academics went down and long distance STD call bills were going up. One day, an internet bill of Rs Rs 60,000 greeted my family. Promptly, Dad took away the credit card. That dream was over.

Studies was tough. In Class VIII, I was conditionally promoted. And in class IX, I was kicked out as I had just 39%. From the beginning though I was not good in studies, I was a bookworm. I always knew more than the teachers. But, I was never good in cramming for the exams.

Parallely, I did couple of websites and a solution called Shoutbox service that provided chat rooms on websites where visitors could enter. This became popular but I could not pay for the server. Then I came up with a service called Deskpost that was like hotscripts, a script directory.

Since I was into web hosting, I used to be active on a web hosting forum called Web Hosting Talk. I saw people buying a service called Wonderdesk at US $2000. I made something similar called Active Support and wanted to try selling it.

For that I needed three things – domain, hosting and credit card processing. So I went to dad and no guesses for what he told me. So here I am, with a product but no resources.

So I went into IRC chat rooms asking for a domain I could use. I was banned but I kept trying with proxys. Finally one guy reverts saying he has two domain names – kayako.com and akimbomedia.com. You know what happened next.

Then I needed hosting. My friend in Jalandhar agreed on the condition that I would pay him in six months.

Last was a credit card processing tool. I wanted Tool Check Out. It is still very popular. It came for US $ 50. Where do I get US $ 50? I go back to the chat rooms announcing that I will give a US $ 2000 product for US $ 50. And I didn’t need the money, just the Tool Check Out account. So again banned, kicked out of forums.

Then a guy who runs a hosting company becomes interested and transfers the Tool Check Out account to my name. Then I create a website and launch the product. Version 1 comes into picture.

Money accumulates to US $2000 which is the minimum withdrawal threshold for Tool CheckOut. I wire that money to a friend’s account and ask him to ship a Compaq Laptop to me. I tell my dad that I have bought a laptop and it would reach in a week’s time.

A week, no laptop. Two weeks, no laptop. Three weeks, no laptop. Every day I am asking about the laptop parcel and dad was pretty irritated. On a positive note, the money started accumulating again. I tell my dad, I have US $2000 and please give me your bank details and I will wire it. Reluctantly lest I hack his account, he gave me the bank details.

So I take the details and tell mom and dad that by next Thursday they would see a wire transfer of US $2000. Thursday is here, but no money. Friday, no money. And I am pestering them every hour if there is any credit. They were sick by then.

Come Monday. Since I used to work in the night, I was sleeping when my Mom jolts me out of my slumber in the afternoon. She says – “paise aa gaye, paise aa gaye, tu jhooth nahin bol raha tha” (The money is here, money is here, you were not lying). And I say – “I was always telling the truth. You never believed me”.

The very next day, the Laptop arrives. And that was how the company began. No money, no nothing and we started this company. Closer to Class XII, I told my father that I did not want to go to college and wanted to do Kayako for life. My Dad having heard about Sabeer Bhatia stories encouraged me to go ahead.
And we started Kayako in November 2001.

By that time, the Raan and the Tikkis had soaked the story enough to be guided to their rightful destination. The Raan was sliced just right to whet our appetite even further. Yeah, it is highly recommended.

ProductNation: Very interesting. When you were setting up Kayako, companies like Infosys, Wipro were playing the IT services card. Did you ever contemplate that?
Varun Shoor: I am an introvert who was forced to become an extrovert. And I did not have it in me to meet clients, convince people, sell something. So services were out of the question. Secondly, I was enjoying what I was doing.

The Raan was just awesome. There was no need to outdo it. So, the simple fare of yellow dal and makhni murg with Naan that followed was just right.

ProductNation: Nowadays, IT entrepreneurs in India are focused more on products and not services. What would be your message to them?
Varun Shoor: First, do not chase money. If you do, you will lose focus. Second, your product has to have a VOW factor. It has to be awesome, period.
Third, start building around things that actually generate sales – a good website and a strong trust factor. How do you do that? Testimonials, client portfolio, live chat, updated news feed, active social media accounts, phone number on the site answered and engaging plus trusting website copy. Last, Think global, thing Big. Then your standards go up and your market has no limitations. And this also cushions you against business cycles.

Product Nation: Where do you want to see Kayako in next 3 – 5 years? How do you want to position Kayako?
Varun Shoor: Honestly, we are going with the flow. We are trying to be better than yesterday. Where this takes us, we have no idea. On positioning, we are focused completely on the product. On what really matters. Making sure each of our customers is happy. We are passionate about support and helpdesk. And we want to continue with our sharp focus on that.

It was time to focus on the desserts now. So it was a sinful hot chocolate fudge for Varun and Gulab Jamuns – the size of golf balls – for Raghav and us. A quick check out and we were out into the hustle bustle of Cyber City Gurgaon.

We then ask Varun – “What is the next opportunity you would like to pursue?” Without batting an eye lid, he responds – “A Five Star hotel”. And adds. “I like change and I am fascinated by architecture. And if I find something interesting in IT, I could take that up as well.”

And as we prepare to bid good bye, he says, “We are planning a strong initiative that we intend to go live in March next year. So watch out”.

Good Luck, Kayako!

Demo Days: Obsolete. Over-Hyped. Disaster

If we were going to let the cat out of the bag, so to speak, comparing accelerators, here is my biggest gripe about “Accelerator Models” – Demo Day.

For the fortunate, who aren’t aware of the Process, this is how it goes. Applications open, Teams submit their applications, Interview processes later, teams are picked, brought onboard and after a 12 – 16 week Programme (depending on which accelerator you are part of), you are building off that first version of the product and then comes D-Day, Demo day when you launch your product, Introduce the Startup, and get funded so that you can move forward. Except that there is one glitch. The funding never happens. Nobody I know of has gotten customers at these D-Days, and nobody is wowed.

You could have glue stuck wings on the entrepreneurs and pushed them off the cliff instead.

Sadly, D-Day is a critical aspect that a lot of accelerators acclaim, is their USP, and that is going to come bite a few entrepreneurs in the ass sometime. Unfortunately. Its not just me saying this. Sameer and Nandini have been saying this for years.

India is Different

Demo Day works. It works in the Valley. A bunch of accelerators put up their startups, and there is someone to come look at these companies and see them for their potential rather than what they are a the moment. At the stage that these accelerators are putting up, all they have is a product that is ready to go for launch, and that is only going to get you one answer “Interesting. Keep us posted on how it goes”.

There is no one here in India who will take you at that stage and take you forward.

For those who understand this space better: You ideally want someone who can drop a 100-250K USD (with a valuation of roughly 1 – 1.5mn Valuation) on the startup to take the company from there. But thats precisely it, they want a “company” not a product built in a scurry. I havent met any teams in the Demo Days of most of these accelerators who can even justify (with data) why they think the product will work.

The Pivot is on you.

So If D-Day is the day when you launch, and I presume it will take the entrepreneur another 30-45 days before they realize that the product is not taking off – nobody is using it, let alone pay for it, what happens? Then comes the decision to Pivot vs Persevere and its the hardest decision on an entrepreneur. Except, guess what. You have already “graduated”. And whatever you pivot on, you’ve lost the opportunity of Demo-day to gain audience. You are as good as a team which was never part of the accelerator in the first place. I know how draining that is on an entrepreneur – we wouldn’t wish that he goes through it alone. Thats why we take our time and go through it in six months.

Direction vs Speed.

Something we’ve been saying for quite sometime. You might want to know where you are heading, before you start setting yourself on fire with Jet fuel. Do you even have a product that the market wants? Without it, Where-my-friend are you “accelerating” to? :) Find your Direction first, in terms of the industry, domain, and problem you are addressing and the solution to it. Thats direction. Then, figure out how fast you want to go and how an accelerator can help. (though most accelerator models seem to be Product accelerators than Startup Accelerators)

Product vs. Startup

There are essentially three steps. Picking an Idea that you want to work on and building a prototype. Its Okay to build multiple prototypes of multiple ideas and figure which one “sticks”. But once you see the data, let the numbers guide you, and make the decision to build it out as a product. Once a product, see if it makes sense to build a startup around it. There is a reason why we modelled ourselves in three stages.

Product acceleration is not equal to startup Acceleration. You shouldn’t be giving equity for inputs that you get towards a product (which might pivot dramatically) – atleast, not so much as what typical accelerators charge.

Is it important to give Young Startups a Platform? Absolutely. We ran Proto.in for years. The key however is to know what stage to unveil them at. Demo Day, as it stands in India today in India, is a disaster.

FootNotes:

1. The Process of building a company in India is still very much bootstrappish – Unless you are an entrepreneur with a track record of execution. The Norm is that, you are rewarded for results you show. PS: There is nothing wrong with that. But its here to stay and its important to acknowledge that and work around that, rather than being in Denial land.

2. The Startup Cuve of a Startup In India is very different from that of a US Startup. “Demo Days” are to replicate the “Techcrunch Initiations”. Answer honestly, does it? It does create a blip, but is it really a launch?

A Rough Sketch, if I were to map out the Startup Process in India Mapped against Traction vs Time would look like this – against the US Counterpart:

Assumptions:

a) The Startup Didnt have to Pivot. Fact: Most Startups will Pivot 2.5 Times.

b) The Startup survived competition, were able to find their value kernel and pivot for scale.

c) Also assuming that this startup did Marketing from Day minus 150 before the product launched. Otherwise, traction would be 0 till demo day when there would be a just a few curious bites, and no solid engagement. Situation, in reality, would and is much worse.

Cross Post from the Startup Guy’s blog

Software Products: Funding and Opportunities, Shoaib Ahmed, Tally Solutions (Part 3 of 3)

Read the Part 1 and Part 2 of the series.

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

In your opinion how important is the concept of funding? Do you think
people can bootstrap easily without funding?

Unfortunately, I come from a bootstrap background so I have to admit that I haven’t
watched the successfully funded companies very closely! Looking at the components,
you need money for development and marketing. I also feel one key component is
requiring enough money to bring on board people with enough leadership qualities and
understanding to pre-empt issues on all fronts. You have to have the working capital to
confidently bring on board people with these qualities. In this kind of context come the
questions: who should fund and at what period of time. There are the elements of the
seed and angel fund — in my mind the concept of angel fund hasn’t matured completely
because there is the expectation is that there isn’t complete clarity but there
is an element of being able to patch the company through so that they experiment through
the formative periods, and the VC comes in when the company is ready to scale, like for
marketing to get big numbers.

The sharpness, unfortunately, is not yet there because the maturity hasn’t been
established. For example, once a product company has been funded, there is an
expectation that the trend set by early adopters is what the remaining set of customers are
going to adopt as eagerly. However, this set may not have bought into the idea yet — but
there now is an expectation that based on the reaction of the first set, the next set will get
automatically attracted and it’s just a matter of reaching out to them. However, the method
and timing of reach out will be different. What it takes and what can kind of expectation
to set is dependent on the fund, but it also largely depends on getting the right kind of
mentoring and product mindset so that the entrepreneur is geared in a sensible manner.

What opportunities should entrepreneurs in the SMB space be
focussing on, other than in the accounting space?

Typically, the mid or large market gets most of the attention. For small businesses,
however, the pain-point is bringing hygiene into working systems like managing books,
inventories and people. At this point, there are options for the small business owner

to opt for enterprise integrated business solutions or specialised applications. The
opportunity lies in recognizing that different segments with different nuances exist —
and your focus is to design in such a way that their respective problems are solved. For
example, keeping in mind what a pharmacy needs both from a software and form factor,
I would say that billing is not the problem but replenishment is. Therefore, a large PC
may not be the solution — maybe an iPad or a mobile app makes more sense. So I would
say that you would need to wear the hat. To find a customer is the first element, and
giving a suggestion which works and bringing new technology in place are areas which
entrepreneurs in the SMB space should be focussing on.

What advice would you give to people who are getting into the product
development space?

First, they should understand the product mindset, which is to be able to identify if they
are building a value proposition. The whole process of product development shouldn’t
confuse them – there is the whole question of what the customer is asking for and what
the product will provide them. This is important, but product development shouldn’t just be
about reacting to market opportunities – arriving at a product design is also critical.

Secondly, there’s also a tendency to concentrate on providing too many features,
understanding customer requirements and being in a perpetual development mode. This is
why the development team has to have a strong business and marketing background.

Thirdly, having a face in the Indian market is a huge opportunity, but technology adoption
continues to be an issue so that needs to be kept in mind. This has a bearing on how you
design the product and experience. How much of that product you’re designing needs a
deep engagement, as well as elements like value and price. There’s a catch-22 situation
here because these elements of the product will still be in infancy – I don’t see a method
which a product company can use to address a market across the entire country. This is
where a lot of product companies fall into a gap because they might move to a partnership
model to sell to more people and this may not always be logical because a partner will
be interested in someone who has already created a market! A product company falls
into this gap where it sells to a few people, finds that it cannot reach out to more, gets
into a deeper engagement with the few customers it has and then loses the shape of the
product. Over the past 25 years, many product companies have morphed into service
companies because of this reason. Yes, environments have changed today: there’s
internet penetration, elements of communication have evolved and so product companies
should leverage this.

Read the Part 1 and Part 2 of the series.