The secrets of succeeding in the Indian SME Market – the iWeb Story

ProductNation caught up with Akshay Shah, founder and COO of iWeb Technology Solutions to understand how they have been successful in serving the Indian SME market. Akshay says that the ability of their company to provide customizable business solutions at affordable prices is what has led to their success. Read on…

What was the main trigger to start the company? 

The journey leading up to starting iWeb in 2005 is quite interesting. I come from a family of chartered accountants. I was well on my way to pursue CA as my occupation, after my B.Com. While preparing for my CA intermediate exams, I had some free time. During this time, as a hobby, I started following the dot com boom in the US and developed an interest in how Internet was impacting businesses and people.

Around that time, I happened to meet the CEO of a well accomplished IT business firm in one of the conferences. He heard about my interests and checked if I could help his company out in consulting with customers to deploy SAP solutions on a part time basis. The offer seemed interesting to me and I started to work part time. As I started interacting with customers and understanding the product, I very quickly realized that there was a huge disconnect between the features offered by the vendor and the price points at which they were being sold. I understood that there was an unmet need, particularly among the SMEs who wished to automate their business processes using IT.

This was the trigger for me to start thinking of starting iWeb. Along with Ketan Trivedi, my father’s friend, who also is a CA, we tried executing small projects for customers who we obtained from our contacts. The chemistry between Ketan and I seemed to work well. Also the initial work seemed to validate our thought process. Hence we started iWeb in 2005 formally to offer business solutions to customers.

The ERP products/solutions space is usually perceived as a mature and crowded marketplace. How have you managed to build a scalable and sustainable business in this area? 

This perception holds good for VCs and investors who are looking at exits and non-linear growth in a relatively short time dimension. However, in the long term, this will be a very lucrative business, if you play it right. If you analyze the SME market in India today, you will notice that effectively only 5% of the market is automated. So, there is a large scope for many vendors, including the big players to go after the rest.

The issue is not about the availability of market, or access to it. The key challenge in addressing the reminder of the untapped market is to be able to provide customizable solutions at affordable price points. It is here that we believe we have been able to crack this puzzle.

Can you elaborate on how you solved the puzzle? What mistakes happened during the process and how did you overcome them? 

From the beginning, we were pretty determined to build the entire ERP suite. In this zeal, we started to develop all the required capabilities of the product in parallel. However, we soon realized that during the startup phase, we could not manage development as well as customer acquisition with equal ease. We had bootstrapped ourselves and had no external capital infusion till last year. Hence we started selling only the CRM module to begin with, and over time, as we obtained a level of maturity in implementing it out for a few customers, we started paying attention to developing and selling the reminder of the modules.

As our customer base increased, our experience in understanding their requirements also increased. We realized that in the SME segment, business processes across enterprises would not be standardized. So, to be able to still get them to buy our solution and benefit from it, we had to build our product to be customizable to their requirements, and be affordable at the same time. These requirements led us to develop a powerful differentiating capability through our AgilewizTM framework that helps us deliver customized multi vertical and horizontal application solutions across different business lines with minimal amount of deployment time.

The beauty of this approach is that even a non-techie can use and configure a solution of his requirement. This approach helps us eliminate the requirement of highly skilled IT professionals needing to deploy solutions to customers. Customers benefit from it, since it reduces the cost of acquisition of our solution. In summary, over these years, we have evolved our product line and built sustainable business by focusing on providing customizable solutions at affordable costs to the SME segment.

What role have channels and partnerships played to help your sales?

You could say that the biggest asset for iWeb today is the partnerships we have built with other companies and individuals. They are a key factor in scaling the business, specifically for our country that has diverse customer requirements. It is also a relationship that we have built by valuing their domain skills. We are very transparent in all our dealings with partners. We strive to make our partners successful by sharing best practices of implementation through our network. As an example, one partner in Indore may reuse the artifacts developed by another partner elsewhere, reducing his time to deployment. This collaborative nature of relationship has helped us to a great extent in obtaining customer wins.

You have recently announced that you are diversifying as a software services provider, offering SaaS / PaaS type of solutions. What is the thinking behind this move?

The intent to diversify from being a pure product/solution company and enter into providing services via the SaaS / PaaS route is driven by two considerations. Firstly, we want to leverage the benefits of emerging technology and pass the benefits to our customers. Secondly and more importantly, moving to a Saas / PaaS based platform will help us provide better support to our existing set of customers. So you could look at this as our play to retain existing customers and build further to address their other needs.

On a different note, iWeb as a company and you as its founder have received multiple accolades internationally and at national level. What does this mean to you as a person, and how does this help your company?

Recognition from various forums such as the MIT TR35 or being selected as one of the top 50 emerging companies by NASSCOM certainly motivates self and the company in a big way. Firstly, it validates your belief and play, paving way to many business leads. Sales cycles will get much simpler because your prospect now sees you as being credible. Secondly, at a personal level, it is a huge confidence booster, and energizes you to go further your ideas to the next level. I would say that most of our largest breakthroughs in terms of customers or partners’ acquisition have happened on account of this.

What message would you like to give to potential product development entrepreneurs? 

Off late, I see youngsters, specifically those graduating out of MBA colleges taking to entrepreneurship primarily because they see it as a cool factor or as a style statement. They do not seem to be prepared for the long haul. So, my advice to any entrepreneur thinking of getting into a software product business is to do so, only if he or she has a burning desire to solve a real problem – a problem which is causing him or her to have sleepless nights. One needs to understand that the journey of entrepreneurship is not a bed or roses, and you get to do everything else other than what you wanted to do. One should be mentally prepared to face these uncertainties and ambiguities – and be passionate about the idea, have the patience and perseverance to take it to a logical conclusion, come what may. Only then, it makes sense to go this route.

“Customer Relations is very important” – Kailash Katkar, CEO, QuickHeal Technologies

In this fascinating story, Kailash Katkar recalls the past almost two decades of running a business that at one time faced closure. But riding on quality people, constant innovation and proximity to the customer, Quick Heal has become a leading anti-virus software company that is giving even the international anti-virus companies a run for their money. Read on….

Why did you start this business? Why did you form Quick Heal? What was the intention behind it, and did you go for it alone or do you have partners? 

When I started this company I never thought I will convert this company into Software development. It started as a computer repair shop. I used to do calculator repairing first, and then I was into laser printer machine repairing. And in those days it was a monopoly in Pune. But when I saw that these machines were not going to continue for a long time and computers are going to take over I started, computer maintenance and started taking AMCs. In fact, I had a lot of customers. I was not into computer sales. I was purely into computer maintenance. 

My younger brother(Sanjay Katkar) after his 12th standard wanted to get into electronics for his graduation, but I instead said why don’t you do computers. He was a bit reluctant because it was very new and the fees were high but on my advice he did that and used to come to my shop for practice because I had computers in my shop. Now those days, nobody bought antivirus software. In fact it cost a prohibitive Rs. 14-15,000. Customers assumed it was the responsibility of the contractor to provide it and when computers came for maintenance it was the contractor who had to format the machine, re-install the OS, and reload the data. 

Now my younger brother as part of his curriculum had to do a project so I asked him to write some tools which could automatically remove viruses since formatting the machine and reloading all the data was very time consuming and cumbersome. The Michelangelo virus was infamous in those days and was quite a problem for many computer users. He managed to write one simple utility that could eradicate the virus and it worked very well. So I started distributing the tool to my customers and that was the beginning of the anti-virus business.

So based on customer feedback, I ventured into anti-virus software and believe me I had no knowledge of the software industry. We started work on a full-fledged anti-virus software in 1993 and the first version of Quick Heal was released at the end of 1994 most likely.

Sanjay Katkar(left) and Kailash Katkar(right)

It was quite funny actually when I think back. The software was a DOS version that came in a floppy, and then we designed a small envelope with colorful packaging and started selling it. It was a bit tough for me to sell, but then gradually I started getting success, and I got this success through channel partners, because since I was into computer repairing, I used to know most of the computer repairing people. 

So, what was the competition like in those days, Kailash? 

There were a lot many antivirus software. I mean, there was Norton antivirus; there was McAfee; there was Dr. Solomon. And there were a lot of Indian antivirus also. 

From Pune itself, there were three antivirus software manufacturers. The two prominent ones were Cure and Vaccine. 

In Chennai there was Vx2000 and Star antivirus software. And from Mumbai, there was Red-Armour antivirus software, Red Alert antivirus software. From Delhi, there were three antivirus software. So overall across the country, I think there were about 10-11 software, and this doesn’t include international software. 

So from a customer perspective, was there a leaning towards the imported software or Indian software? 

People were more fascinated by imported products and software was no exception. McAfee and Norton were the preferred choices in the market. 

Correct. you must have had a lot of courage to kind of get into the market at that point. 

Yes. Actually, my computer maintenance work was still on. I continued my computer maintenance until 1998 and this gave me the cash to pump into the anti-virus software development and marketing also. Personally, I used to spend 50% time on computer maintenance and 50% time on software sales. And my younger brother was fully focused on development. 

What was your proposition to the customer? 

Actually, it was quite difficult considering the huge competition, with so many number of antivirus software. But in the late nineties, a virus called Dir 2 came into the market. The virus was extremely dangerous and used to decrypt the hard disk. In fact, users never knew when the machine is infected and after infection how many times the machine was rebooted. Now if you applied an anti-virus software in the traditional way, it was just remove the virus but whatever data was decrypted would be lost and the machine would crash. So every time the machine was formatted about 30-50% of data would evaporate. 

So Quick Heal pioneered a unique approach. We managed to find out how much data was decrypted and encrypt it before cleaning the virus. That way we got the virus out and the data restored. This way Quick Heal was the first antivirus software in the market  which used to do this. Even Norton and McAfee were not doing this. 

What was your communication strategy to inform the market of such developments? 

I was not able to go pan India, but I was able to communicate with most of the customers in Pune. In fact soon after Dir 2 came Natash a dangerous polymorphic virus. Again many of the antivirus software companies took a hit but we were able to find a solution and gradually started converting larger customers like the Times of India who took a corporate decision to adopt our software. 

How did you scale that now? From a development perspective, how did you scale it? 

Now we have a team of around 650 people but we went through some tough times. In 1998 I decided to close down the computer maintenance business because it was very difficult to run two business together. I focused on a distributor strategy but that put a strain on my business because while the distributors sold the product they never paid me on time. In fact it reached a stage when in early 2000 I decided to close down the company. 

In 2001-2, I had about Rs.2 to 3 lakhs in the bank, and then one of my friends advised me that if you really want to scale and grow your business, invest in a proper technical team. Also get a good business team. So finally we decided to do it under a lot of strain because in those days banks never supported software companies.

I somehow inserted a big advertisement in the Times of India, almost a half page ad, saying that I’m looking for country managers and city managers. I was then able to hire good people and together we changed the entire structure of the company.

Why did they come and join you? What was it that they saw in Quick Heal that was the game changer for them?

Quick Heal had become a bit popular in the Pune market and most of these people were from Pune itself. So, they knew about this product. They knew about the quality of the product, but they were quite also that the product was not reaching the masses. So they joined the company to take up the challenge and I am proud to say that more than 10 years later they are still with the company. 

With these new people, we embarked on a strategy to open branches in other cities. Soon I developed a lot of confidence that sitting in Pune I can manage branches in other locations also. We started with Nasik. And after Nasik started running well, in three months’ time I started an office in Bombay and then in Nagpur and then in Indore, and then gradually I went into Gujarat and then I went into North India and South India. Today, we have around 23 offices, apart from Pune, across India. 

So you still believe that a large part of your sales has to be achieved by physical presence?

Yes, yes. Most software companies try to appoint national distributors whenever they scale their product to other countries. And perhaps a few regional distributors.  I don’t believe in that. Because what happens, if you….if you appoint a national or a regional distributor he expects a lot many things to be done by the company. He really does not make efforts. He just waits for customers. If the customer demands the product, then he sells the product. 

When I appoint more than 100 channel partners, then I try to appoint one stockist on top of it, so that I don’t have to deal with each and every channel partner for a transaction like billing and invoicing and payment collection and all these things. I can just deal with all the channel partners just to maintain a relationship and make sure that they are comfortable selling Quick Heal, and if they have any issues or problems, we can go and help them. 

So, this is how I started developing a market all over India, and now we have around 12,000 channel partners across India. We have direct connectivity with each of our channel partners. 

How do you keep this channel partner base updated about the product and about new developments?

By giving continuous training. Every branch has a set of people for a sales team, a set of small – one or two persons – for marketing. Then a team for support, and then the administrative team. And among the support team, there is one person who is a trainer who keeps on training all the channel partners about the product features and product support and other functions. We have a training program conducted every Saturday for a specific set of channel partners. 

And how do you keep updated about the innovations that you need to bring into the products? So, the new antivirus, antidotes, whatever. 

Actually, since the team is spread out across India we always have meetings with the branch managers once in a quarter, and then we keep on getting a lot of feedback from the entire market through these branch managers as to what the customers are looking for.

Okay. Looking at this 15 year journey now, what would you pinpoint as the most important thing that you have done. 

Customer relations are very important for me and understanding the customer is very important for me. So, I have to focus more on that, what exactly customers are looking for and how I can get that service with less effort for me as well as for my team by developing some tools or something like this, you know. 

How do you keep abreast of fast changing technological developments? 

Our senior level team of about 7 to 8 executives constantly are attending conferences and travelling across the globe. For instance, we attend the Red Hat conference and this Hackers conference and most of the antivirus conferences and a lot many security conferences that keep on happening….Not only do they attend, but we also keep on presenting our research papers in these conferences. So every year, around four to five papers are being presented by Quick Heal.

In the next 3 to 5 years, Jamcracker seeks to leverage and contribute to India’s product ecosystem, and bring the latest R&D and innovations in cloud brokerage solutions to Indian enterprises and SMBs.

Set up in 1999, Jamcracker develops and markets software, services and an ecosystem of cloud services that enable customers to become Cloud Services Brokerages (CSBs). K.B. Chandrasekhar, CEO & Chairman, was also co-founder and Chairman of e4e Inc., a business process outsourcing company. In the mid-1990s, Chandrashekar founded Exodus Communications, which he led to become the leading provider of enterprise hosting services. In 1999, Chandra was honored as the Ernst & Young Northern California Entrepreneur of the Year.

In an interview with ProductNation, Chandrashekar says he is bullish about designing and selling to the Indian market, but there are some specific challenges hindering SMBs, including low broadband penetration, and ubiquitous and cost-effective access to bandwidth.

1.    What is cloud service brokerage and is this phenomenon really desired?

Gartner defines a Cloud Service Brokerage (CSB) as an entity that will “play an intermediary role in cloud computing… [to] make it easier for organizations to consume and maintain cloud services, particularly when they span multiple providers.” CSBs broker relationships between cloud services consumers and multiple cloud providers, aggregating many services into one place with a single point of catalog management, user administration, access control and security, billing, auditing and reporting, and many other aspects. CSB operators are either Internal CSBs or External CSBs, and some will serve double duty. Internal CSBs are operated by centralized IT organizations that provide internal Cloud AppStores for employees and affiliated members. External CSBs monetize cloud services delivery by aggregating and selling from their own private-branded Cloud Marketplaces. An analogy is how the power grid interconnects energy producers with energy consumers. 

If we are considering a collection of interdependent cloud services taken from separate providers, what sort of help or value would cloud brokerage offer?

Cloud brokerages provide an abstraction layer that enables cloud consumers to have unified control – across disparate cloud services – of catalog management, user provisioning, security (including single sign-on), administration, reporting/auditing, support and billing.

This greatly reduces the overhead costs associated with procuring and life-cycle management for organizations that are incorporating cloud services into their businesses. It also improves their ability to secure and manage how their users interact with disparate cloud providers, to provide a unified support experience, and other benefits.

2.    Could you tell us about Jamcracker’s home-grown cloud services brokerage (CSB), and how do you differentiate yourself? What are your offerings as part of this solution?

Jamcracker develops and markets software, services and an ecosystem of cloud services that enable our customers to become Cloud Services Brokerages (CSBs).  Jamcracker’s CSB enablement solution – the Jamcracker Services Delivery Network (JSDN) includes a cloud services aggregation, delivery, and management platform; a pre-integrated catalog of cloud services; and  best practice enablement services that allow our customers to unify the delivery and life-cycle management of public and private cloud services.

The Jamcracker Services Delivery Network (JSDN) includes a white-labeled cloud aggregation and delivery platform, a global ecosystem of pre-integrated cloud services, and business operations that enable our customers to operate their own Cloud Services Brokerages. The JSDN is a complete services delivery solution that includes hosting, provisioning, licensing management, billing, identity management, compliance management, single sign-on, services administration, business operations and customer support—enabling organizations to get to market quickly and cost-effectively as a Cloud Services Brokerage (CSB).

3.    How will this solution help enterprises streamline their cloud IT services delivery to speed up organizational innovation, and provide a unified usage experience?

Cloud services provide significant benefits to IT operations. From an IT perspective, however, adopting cloud services presents significant challenges. Implementing cloud services from multiple vendors creates cumbersome management and complicated billing, and CIOs have compelling concerns around security, compliance, auditability, accountability and supportability.

A highly effective way for organizations to unify cloud services management and delivery is through internal cloud services brokerages (CSBs). CSBs can help IT provide unified security, compliance, license management, and support.

4.    What have been the pain points in designing a cloud brokerage solution given India’s existing eco system?  What were the challenges faced?

There are two aspects here: designing cloud solutions from India, and designing for the Indian market. In designing cloud brokerage solutions from India, we have benefited from the excellent developer pool in India. Regarding designing and selling to the Indian market, we are bullish but there are some specific challenges hindering SMBs including low broadband penetration, and ubiquitous and cost-effective access to bandwidth. In the next three to five years, we at Jamcracker seek to leverage and contribute to India’s product ecosystem, and bring the latest R&D and innovations in cloud brokerage solutions to innovative Indian enterprises and SMBs.

As an early market mover in this offering what gains have you realized?

Jamcracker is well positioned as a thought-leader and technology-leader with respect to cloud brokerage enablement solutions.  Now that the market is poised to see explosive growth, this puts us in a fantastic position to succeed.

5.    How do you envision the current cloud computing paradigms to evolve? In that context what innovation do you see forthcoming from Jamcracker in the cloud space?

Unifying cloud services delivery and life-cycle management is becoming a well understood need, and to a great extent cloud services brokerage platforms will become the virtual “platform” that combines the innovation advantages of distributed computing with the traditional IT management advantages of standardized platforms.  We’ve seen this need for centralized management controls with every new wave of computing innovation – starting with mainframes, desktops, client-server and the web.

What is your business revenue strategy from this cloud-brokerage solution?

We support a few different models based on our customers’ needs.  In some cases, our revenue is a purely license-based model of our platform, whereas in other cases it’s more of a revenue-share partnership.

6.    Gartner predicts that IT organizations will increasingly be assuming internal “cloud services brokerage” roles. What are the prospects for cloud brokerage in India? How mature is the market for such solutions?

After the U.S., India is the #2 source of cloud-based services development, so the CSB model will be an important one from a supply-side distribution perspective.

From the demand side of the cloud services market, India is an emerging market that is competing on a global stage. In this cloud services will play a critical role in enabling small to mid-sized Indian businesses to leverage IT and application services that would previously have been prohibitively expense for them to purchase and operate on-premise.

Larger Indian businesses that already operate on a global basis will increasingly look to the cloud delivery model as a means for them to compete more cost-effectively and in a more agile manner.

Q&A with Cloud-Based Telephony Company Exotel

Exotel  Techcom “Cloud telephony product for SME’s which is like many others but we have a different approach in our problem solving.” says Shivakumar(Shivku) Ganesan, its Founder. Currently Exotel focuses on offering an easiest and fastest way to setup a phone number for your business, with smart applications tailored to business needs. He shares insights for other entrepreneurs about lessons learned in finding a market and growing a startup.

What is your Story? What inspired you to be an entrepreneur?

I am a Computer Science graduate from BITS Pilani and after spending some great learning years at Yahoo! I felt I needed a challenge beyond what Yahoo! could offer. I met the Bansals “over a few smokes” and their office was really close to my house, so it sounded exciting and I decided to join Flipkart. That experience awoke my inner entrepreneurial spirit and I decided I needed a venture of my own.  

If I could point to one thing, it’s “Impact”. I get up every morning asking how I can impact more people around me and improve their lives. That’s why Roopit was solving my own problem when I was not able to buy a 2nd hand fridge, and Exotel when I could not solve the voice and SMS problems for Roopit. All of this inter connects to wanting to solve existing problems for others, using technology, and hence creating impact.  

Why and how did you start your company? Why this Area? 

I was running Roopit at that point of time, a C2C marketplace where buyers and sellers could meet and sell over voice and SMS. I was a techie all my life since BITS Pilani, Yahoo! and Flipkart and I wanted to automate the entire voice & SMS platform into a scalable solution for my business. I did not want to hire LOTS of people and build a call center; that was just not me. Also, dealing with telecom operators and trying other products in the market to solve this problem led to many frustrations.  

Then, I decided to use a bit of open source and build a platform/product for myself. In the process, I bumped into many of my friends running businesses asking for a similar solution for themselves, and with money hitting the bank from these businesses, the pivot was natural. 

What is your product’s differentiator from competitors?

Exotel is a cloud telephony product for SME’s which is like many others but we have a different approach in our problem solving. We believe that a product has to be very very simple and easy to use for firms, especially in a new space involving telephony and that’s the core of our product.

Exotel is the easiest and fastest way to setup a phone number for your business, with smart applications tailored to business needs. Anyone in India can start using the product in 15 minutes after purchasing a phone number and the application they wish to use. The application maybe IVR, voicemail, call recording, data and analytics, API, SMS or a missed call campaign, and all this without much hassle, just a simple setup. 

We have also grown and learnt that telephony infrastructure and down times in this space have been common for years, but after an initial harrowing experience with one of our early customers, we have quickly learnt and much of our product focus has been on stability, redundancy and reliability. We even openly talk about the evolution and tactics we have put in place to make up time much quicker. 

In a nutshell, quickest, easiest and most reliable phone system setup for your business. 

What is the biggest challenge Exotel has faced so far? How did you address the challenge?

As we perceive business phone systems very differently, there is no precedent to draw inspiration from. Each one of us has our own vision of Exotel and they are all just as good as mine. Arriving at clarity on what we are building, why we are building it, how to sell it, what to do, what not do to etc have been time consuming and tough. My role of fusing everybody’s ideas into mine and then creating a consistent story that all of us understand and agree upon has been challenging. 

Who is your customer?

A small or really small company up to 20 people, typically in the B2C space that depends on phone calls or SMS for a major portion of their business is our customer.

The belief is that Indian SME’s need to be “sold to” – the job that’s conventionally handled by IT resellers who are critical to Exotel’s business model. What are your thoughts on the changes that Cloud technology might bring to this scenario, with the whole “self-service” angle coming into play? 

Cloud (and SaaS) is a service delivery model, so, that does not change the sales and fulfillment models (resellers). Increasingly Indians are buying things online and they will purchase services for their companies too. But that is not going to take away the role of resellers in the short to medium term. Having said that, Who these resellers are, what they are reselling and so on changes quite a bit in the SaaS model. It is likely that the partners in the SaaS ecosystem might be IT services and other consultancy service providers rather than hardware and black-box providers.  

What are your future plans?

To create as much impact as possible in society. There are millions of SMEs, and technology hasn’t reached them. If Exotel could save their time and money so that they can go home early and spend it on their family, that is a plan worth working for.  

What have been your BIG lessons – personal, professional and otherwise? 

  • Solve someone’s problem.
  • Most Indians have a “services” bent of mind. “Product” and “SaaS” bent of minds have to be acquired/taught (learned).
  • Hire for attitude rather than/along with talent
  • It is possible to learn and excel in nearly everything.
  • Many “middle management” people from MNCs (who were very successful) are not readily suitable for a start-up.  

We see a lot of product start-ups coming up in both the enterprise and consumer space. What would be your advice to start-ups — where do you think they are lacking, and how should they go about correcting these issues? 

I don’t think I am qualified to give advice to other people yet. My entrepreneurial life is guided by two concepts: 

Curiosity: A genuine desire to learn new things and correct one’s mistakes.

Self-motivation: The need to get somewhere in life (being driven).  

NowFloats – Getting small businesses online in 4 SMSes and 13 minutes!

NowFloats – Getting small businesses online in 4 SMSes and 13 minutes! 

I love clear mission statements, and NowFloats couldn’t be clearer:

9.6 million small and medium businesses need a website. Only 0.6 million have one. That’s 9 million tasks on our desk (and that’s just in India!)

I recently got a chance to catch up with Ronak and Jasminder (Jas), 2 of the cofounders of this exciting company called NowFloats that aims to bring SMBs online, without making them sweat over it (other 2 co-founders are Nitin Jain and Neeraj Sabharwal) . NowFloats is a team of 20 (4 founders, 4 tech, others in sales and support), based out of Hyderabad, though their customers are spread all over India. Overall, I was very excited by what I listened and saw, I sense that NowFloat holds immense possibilities for small businesses and has all the right ingredients to be successful in its mission.

The problem for small businesses

Given increasing reliance of users on search, it is becoming important for offline small businesses to have an online presence. An online presence needs to have discoverability (users know that you exist), engagement (users interact with you and like you), and conversion (users visit your offline business). However, when creating such an online presence, a small business has to grapple with 3 problems:

  1. Creating a website takes too much time and effort – even for tech-savvy type, which a small business owner is not.
  2. Updates require engaging website developer again – too much effort and dependency
  3. Online marketing is hard and expensive, and requires digital marketing expertise, not something a small business owner has

Standard option currently for a small business is to do nothing about online presence; very few businesses hire someone to create, maintain and market their site which is very expensive option without clear ROI.

NowFloats solves this problem for small business in an easy-to-use manner at an extremely affordable pricing.

NowFloats Promise

NowFloats promises to allow a business owner to create a website in 4 messages and in less than 13 minutes – send the name and address of your business, website name you desire, and your website is ready to use! If you wish to update the site (messages on message board or updating any of the original details you provided while creating the site), it is as simple as sending another message.

It may look like a simple and easy website to create, but it packs a lot of punch:

  1. Site and every message are geo-tagged, which means local searches will show up your website and deep-link to your message.
  2. Your website and each message is search engine optimized
  3. Each update is a page so it can be shared by your customers on social networks, which again has endless social, search and business possibilities.
  4. Visitors can subscribe to get all subsequent updates, or leave message for you to follow up with them 

NowFloats – The Product

Design: NowFloats is a very well-designed product. Their company website as well as the customer sites are beautiful in their minimalist and pleasing design.

Technology: They have a scalable architecture, built using Microsoft technologies. They have 4 patents filed and 2-3 are on the way. They offer subdomains under nowfloats.com in addition to allowing customers to use their own domain names if they wish – like Body Granite Gym and The Courtyard & Cafe Courtyard do.

Analytics: They care deeply about analytics that customers get about their online visitors. Businesses get weekly information about how their site is doing (# of page views in a week). On their product roadmap, they have features to provide details like which messages got max view, keywords which generated maximum views, etc., goal being to show what type of content is attracting maximum traffic.

Pricing: Pricing Plans (5K to 12.5K a year) are very competitive, given that even hosting a site costs 3-5K a year.  NowFloats is still reviewing pricing strategies based on market feedback so expect this to change soon.

Test-driving NowFloats

As I took the service for test-drive, here are my impressions:

  1. It is very easy to set this up indeed. I was up and running with http://ilovebooks.nowfloats.com/ in less than 10 minutes.
  2. As soon as the site was created, I got a call from their customer service. They wanted to confirm my identity and walk me through the next steps, including collecting payments.
  3. I realized I picked a wrong name for my business, so I wanted to change. A call to customer support informed me that they will have to do the change for me, though an app is coming which will allow self-service. Later I found it was only partially true, the name (and many other details of the business) can be updated through SMS messages even now. I promptly used the service.
  4. I wanted to update the site using my laptop, but changes can only be done using SMS, upcoming app, or customer support. I find this a little annoying.
  5. I tried to get creative and sent an html fragment as an SMS message, which created a broken message on the site. Given that I can’t update it online; this requires me to call customer support. Later I was told how to do this, and also given the current target audience, this is not an often used feature.


Customer Acquisition

Clearly small businesses see value in NowFloats offering. In a short span, they have 1600+ customers live, including customers like Hazzel Ice Cream Cafe and Dr. Chandrika’s Kerala Ayurveda . I was fascinated by the variety of customers they have attracted, including my favorite restaurant in Hyderabad, a Nokia Priority franchisee, and even a personal branding site. These sites are discoverable (through geo-tagging, auto-generated tags and other SEO techniques, sites and messages come up in ahead in all search results) and drive engagement (users subscribe to the messages, businesses get notified when someone subscribes or shows an interest). Conversion (people visiting the business) is hard to track and NowFloats team is working on some solutions that will allow such tracking.

NowFloats has multiple approaches and channels to acquire customers:

  1. Geography: Started out with targeting Hyderabad businesses. Currently they are focused on Bangalore businesses. The goal is to have pan-India sales presence soon through partnerships and other means and continue to expand city by city.
  2. Catagory: One of the innovative ways they target a particular category is to target the franchise business owners of a particular brand. For example, they have brought many Nokia Priority franchisee owners online, same with Printo. Given the huge number of franchisees in India, this seems to be a winning sales strategy.
  3. Partnerships: They have a shop-in-a-shop model with Printo. Since Printo serves much of the same customer segment as NowFloats but with a complimentary service, this is a great move to gain customers.  They are exploring similar partnerships with complimentary service providers.

Couple of other things I would like them to focus on:

  1. Online Presence: I can’t discover NowFloats online. Google search for getting my business online didn’t say anything about them in first 3-4 pages. I think they need to make their discoverability better as they go forward.
  2. Social: Small businesses thrive on communities and loyal customers who like the service they get. One of the best ways to reach small businesses is to tap into this community and loyal customer base, through social or other platforms. I would love to introduce NowFloats to the small shops I visit near me, but there is no good way for me to do so.

Competition and Differentiation

When I researched around, surprisingly, there aren’t many cost effective ways for small businesses to create online presence. India Get Online program from Google aims to get Indian businesses online and are a viable option for a small business. However, I think NowFloats offers a more targeted and sustainable product, that can potentially complement the Google offering.

Google’s strategy is to get a basic site up for you so that you are visible in local searches, to stay visible. NowFloats focuses on getting a site for you and market it online for you, thus helping you stay focused on what you do best – run your business.

What Future holds for NowFloats

I see NowFloats extending itself in 3 areas:

  1. Richer Eco-system: NowFloats plays in the local search space through their mobile app. A successful ‘NowFloats for business’ means rich data about local businesses available for their app to make use of. Controlling the supply of rich data from small, local businesses has lots of grand possibilities.
  2. Richer Revenue Models: Currently, there revenue is subscription-based, and it may be hard to show how an investment of 12500/- per year translates into increased traffic (and revenue) in their offline business. Their goal is to evolve newer revenue models that can directly tie NowFloats revenue with SMBs revenue, thereby creating a symbiotic and sticky relationships.
  3. Richer engagement with businesses – Businesses need many services as soon as they realize the potential of an online presence. Selling online, driving deals, building software solutions for their businesses, etc. all can be offered once the business is on-boarded.

Power of an idea lies in simplicity and pervasiveness. After I talked to NowFloats team, I have been observing small shops around me in a new light. If the great little corner shop selling briefs could be easily discoverable, If my favorite restaurant in Greater Noida could be more engaging, if the grocery shop in my apartment complex had an easier way to let me know of his deals, I am sure these businesses would benefit immensely. And it is so simple for them to do so now – by using NowFloats. Nowfloats is a very powerful idea whose time has come – may all the power be with small businesses and NowFloats!

Getting business to use technology and improve productivity – Knowlarity Communications

Inspired by the vision to help small businesses make better use of technology, Ambarish Gupta gets talking about how his Cloud Telephony product Knowlarity, fills a crucial gap in business struggling to use costly and cumbersome technology to improve productivity. In a world gone all mobile and integrated, Knowlarity’s hardware free, web based solution, frees you from the traditional PBX machine and lets you communicate seamlessly on the move, even integrating with your CRM and ERP systems, thereby fetching you prospects, business and the extremely crucial customer analysis information.

Getting business to use technology and improve productivity

Q.  What was your vision that inspired you to launch Knowlarity?
I wanted the regular mom-and-pop businesses in India to become better by using technology. These mid-size business form the bed-rock of Indian economy contributing to more than 10% of Indian GDP and employing millions of people.  I have a degree from one of the IITs. If these business could use technology and improve their productivity by even 10%, our vision will be fulfilled.

The problem with technology adoption however is that the Indian business owner is not very tech savvy and does not always feel very comfortable about using complex software. We solved the problem by designing all our products to be accessible over telephone. With close to universal telephony penetration in the business sector, this is a very powerful solution. Our virtual office product – SuperReceptionist makes office phone super intelligent and powerful. Another product – SuperFax allows business owners to receive faxes as PDF documents on email and not worry about owning a fax machine. 

Q. What is Knowlarity’s product positioning?
We are a Cloud Telephony company targeting SME in emerging markets. We want to be super hassle free. We want to be simple and intuitive. We want to remain inexpensive so that a large number of SME can use our products. Above all, we want to use technology to help Indian SME improve their revenues and decrease cost, thus improving their bottom line.

Q.  What problem did Knowlarity help solve for its customers? What were the existing products lacking?
At the most basic level, our products replace office PBX system. You remember the big black machine that a receptionist in any office has? Somehow hooked to a telephone? That is called a PBX machine. When someone calls to the office, the phone rings, she can pick and route the call to employees inside. If you open an office, you need one such machine.

This is a very cumbersome hardware to handle. It is very difficult to configure. It is expensive with cost approaching to 1 lac for a regular offices. It also ties you down – the calls are forwarded to your desk phone when employees are increasingly becoming mobile. It also has no integration with your enterprise softwares. Your office phone is where every single one of your new prospect and customer calls. All the logs should go to your CRM or ERP system for very important customer analysis. It can never get done with such systems. SuperReceptionist  solves the problem. It does not require any hardware. You come to our website and get a phone number that you can configure on the web. You can upload an mp3 greeting saying “Welcome to your company. Press 1 for sales and press 2 for support” for example. You can configure it over web to forward the calls to your mobile number when people press 1. 

You can avoid fixed expense by using it as per-use system – paying every year of use. It also integrates with your CRM system – Salesforce.com or freshdesk or sugarCRM come pre-integrated. It makes telephony super intelligent and useful for your business. 

Q. How different is it from its competing products, if any?
We get competition from companies that have built their products over Asterisk – an open source system. These are on-premise systems that have problem with stability, scalability and are really expensive when you calculate the total cost over a period of a year. We differentiate by providing advanced telephony applications that are hassle free, pre-integrated and are really inexpensive to use. 

Q.What was your biggest struggle with bringing Knowlarity to market?
Indian business are difficult to sell to and the technology adoption is pretty slow. We struggled in maturing our processes to sell at scale. It took time but we are able to do so now.  

Q. What was experience of the core team that worked on the product?
The core team is composed of people with deep experience in technology in general and in products in particular. Bipul – the CTO – worked in technology industry in Silicon Valley designing embedded device products. He is IITK CS 1999 batch. I started out my career with a product company in Valley named Electronics for Imaging after graduating from IITK in CS in 2000. Pallav – the other founder – also an IITK EE 2000 batch worked from NVDIA chip manufacturing company in valley.

We wanted to build a product that Indian businesses can derive real value from and use with ease. We developed the technology in-house to make sure that the product remain really easy to use. I am happy to say that we seem to have had reasonable success in achieving that 

Q.  How does the product help start-ups/companies?
Cloud technologies are god-sent for status companies. Our products scale as the companies scale, do not require up-front investment and are usable from a simple browser. SuperReceptionist gives startups an office number that they can print on their business cards. It is really important for startups to keep track of customer inquiry and publishing mobile number as your customer care number can really hurt  there credibility. With an office number, the startups can look like a big and established company. Also, with a log of every call going into their CRM system, startup companies can kick-start their customer engagement processes right from the beginning.

We love startups and provide them free services as well. For example, you can have a free conferencing service from us by giving a missed call to +91 9650 235522. You will receive your conference ID and PIN in SMS. We want startup companies to get started with least possible hassle. 

Q. What are your learnings in doing business in the SMB market in India and would advice would you want to share with startups?
SMB markets are not easy markets to build large revenues quickly but at the same time these are really un-penetrated markets. There are huge opportunities available. I think startups should build SaaS products for such un-penetrated markets. They should take it to the customers quickly – even when it is not fully cooked. When there is real pain and real need even a half-baked product will be taken with open arms by the customers.

Q. What are the future plans for Knowlarity?
Knowlarity wants the enterprises in the emerging markets to be able to use the advantages of cloud telephony to the fullest. We are looking to consolidate our position in India and grow in the international markets. 

Bharat Goenka(Tally Solutions) talks to us about the company’s ‘stubborn’ decision to stay focussed on products

Bharat Goenka is the architect of what is arguably India’s most successful business solution — Tally.  Co-Founder and Managing Director of Tally Solutions, Mr. Goenka developed the famous accounting solution under the guidance of his father, the late Sri S S Goenka. Today, the product is the de facto accounting solution for many SMEs and Mr. Goenka serves as an inspiration for many aspiring software product entrepreneurs. In an interview with pn.ispirt.in, Mr. Goenka talks to us about the company’s ‘stubborn’ decision to stay focussed on products, the non-DIY nature of the Indian SME and the necessity for product companies to stay focussed on the product mentality.

Tally is one of India’s most successful product stories, and it definitely appears to have ticked all the right product story boxes: responded to a genuine market need, stayed focused and evolved with the needs of users. Given the benefit of 20:20 hindsight, would you have done anything differently?

The reality is that one doesn’t really learn from the past. We continue to do audacious things, we continue to get some success out of that as well as failure. Over our 25 year history, this has happened multiple times. Multiple times, we have taken a decision and it has gone wrong — but if the circumstance arose again would I take the same decision? In all likelihood, yes — I would have no reason to expect success, but I’d still have the optimism and think just because it went wrong in the past doesn’t mean it also has to go wrong this time. So although I would say it’s unlikely that one would have really done anything different, I can give you an example of a decision not working out for us. In 2004-2005, we changed the price of the software from 22,000 to 4,950 thinking that we would be able to sell software as a commodity. The reality was that for that time, it was difficult to sell software as a commodity in India in the B2B space. And so we suffered, massively. That proved our belief that we couldn’t sell software as a commodity, but it didn’t stop us from trying. We lost almost 50 crores in those one and half – two years, so I would say our single biggest mistake was that.

Tally – or rather Peutronics — was founded in 1986 at a time when much of the Indian software industry’s focus was on services. The decision to remain a product company when the tide seemed to be going the other way couldn’t have been easy – why did you make this decision?

Actually when we started off, virtually every company had a product. Whether it was TCS, Wipro or Mastek — everyone had a business product.  The shift to services took place in the mid-90s, particularly towards the edge of the Y2K environment. We were one of the few stubborn companies who believed that while there was a lot of money to be made in services, we would never be able to address a lot of customers. So the mandate with which my father and I started the company in 1986 was that we were going to change the way millions of people do their business. We were clear that by moving to services, we would never be able to achieve the objective.  We were unclear how long it would take us to get to a million — 25 years later, we are still trying to reach even the  1 million mark. But in 1986 we were clear that we want to be able to touch millions of customers. Therefore we remained focussed on our product line.

So what was that inspiring moment for you? Did you wake up one morning and decide that this was what what you wanted to do — to change the way these millions of customer did their business, or was it a gradual evolution?

In the months before we got the product Tally out, one was into the product mindset but for developing systems related products like compilers and operating systems. So I was preparing myself to do those kind of products. At that time, my father was searching for a business product for our our own small-scale industry business. He examined multiple products, but couldn’t make sense of any of them. He very famously said: “When I’m buying a car I want to be a driver and not a mechanic.” Similarly, he was looking for a product that would help him run his business — not his computer! Every product that he was looking at required him to change the way he thought about his business.   So because I was interested in software, he said these guys can’t do anything can you do something? So I was trying to solve his problem. After six months of development, I would say that it was his inspiration and thinking that formed the idea and belief that the product should be something that the country should also use.

The belief is that Indian SME’s need to be “sold to” – the job that’s conventionally handled by IT resellers who are critical to Tally’s business model. What are your thoughts on the changes that Cloud technology might bring to this scenario, with the whole “self-service” angle coming into play?

India is not a DIY country, and this is unlikely to change in the SME sector.

The way the market works in India is like this : SME’s expect people to come and sell something to them, even if it’s bottled water. You expect it to be delivered, and you expect to pay for it in a different way. In India, SME’s behave identical to the way enterprises behave abroad. Abroad, SME’s behave identical to consumers.  That’s why in most MNCs, you see that the SME and SO/HO market being handled by a common head while the enterprise head is separate, because they need to be sold to. In India — actually, in all developing markets — the SME and the enterprise behave similarly. In the west, the cost arbitrage of selling to a business is so high that the small business has no other option but to behave like a consumer. In developing markets, the cost arbitrage is low enough to send people to do the sales. And therefore, the buyer expects someone to come and do the sales. It is not about whether the visit is required because of the software complexity or the commercial complexity — it is an expected visit.

In your opinion, what are the three most common things that mislead or cause the downfall of Indian product companies today? What advice would you give them to overcome these?

I think it would boil down to one — which is to be clear about which business you’re in. Most people believe they are in the business of making money. Okay, even I am in the business of making money but my point is this: you can never be in the business of making money, you have to be in a business — money is an outcome of that. To explain it better, imagine that you are a software developer who wants to start your own product company. Capital costs are not very high — a single computer will cost about 20k, and assuming you develop the skill, it will some months to develop a software, and you’ll get your software out. You might put together an infrastructure, sales people etc and you’ll put up a monthly expenditure of about 25 – 30k. You start seeking customers — you  find me. You sell me your product for say 10k. In all likelihood, I bought your product because I like your software development style and perhaps your product solved two or three problems I had — but I still have twenty more. Now because I like your software development style, I’ll ask you to do more work for me. I might ask you to expand the product features, solve some HR problem that I have which this software doesn’t solve and I’m willing to pay you for it.

Your first ten customers will give you so much work, you won’t have time to go out and find your next 100. Or even if you find your next 100, they will give you so much work that you won’t be able to look for your next 1000.

So ultimately, you will still continue to successfully make money, but you will never be able to create a successful product company. This is the single trap that I see almost all product companies fall into today. They all make money, and that’s why they’re still in the business but they stop eyeing the fact that they were supposed to be in the product business and not the services business. Now imagine taking a strategic decision like this in the early days when there was no competition in the market– today you can take a decision to change over night. But in the early days, while we did do services for companies (if someone asked you to do something extra, you did do it) we refused to take a single penny for any services that we did. That forced us to focus on selling new licenses. Otherwise once you’re able to get money from services, there’s no requirement to sell new licenses!

In your opinion, what’s the reason behind Tally’s popularity? At the risk of being politically incorrect, is it because of its “accessibility” due to piracy? Or is it largely because it’s simple and user-friendly?

Pirated software doesn’t become popular — popular software gets pirated. We strongly believe in one thing: if my software is not valuable to you, your money is not valuable to me. So customers are able to see tangible value in our software after they’ve paid for it, and therefore they tell their friends to also buy our software. Word of mouth has been the principle pivot of popularity, and we’ve told people on a number of occasions that if our software has not been of value to them, we would return their money. Even after three years, people have returned and we have returned their money. In 25 years, this has happened nine times to us. But fundamentally, if our software doesn’t work for them, their money doesn’t work for us.

We see a lot of product start-ups coming up in both the enterprise and consumer space. What would be your advice to start-ups — where do you think they are lacking, and how should they go about correcting these issues?

I would ask them this: are they solving the problem for someone else vs are they solving the problem for themselves? If they are unable to be the most prolific users of their own solutions, they will find it difficult to put it elsewhere. It’s the problem of architects, right? The architect is building for you — so they build and go away, but you have to live in the mess. I think as a company we had the privilege of this insight from my father. My most famous depiction of his words was in this context: in the early days, I had asked me a question against a certain context and when I was trying to explain to him that it was very difficult to solve the problem in that manner in software, which was why it was done in a particular way he asked me “Are you writing programs to make the life of the programmer easier or the life of the user easier?”. The general tendency I have seen is that very few start-ups are willing to take the challenge of solving the complexity of the product themselves so that they give simplicity to the end-customer — and this is a fundamental requirement of the product.

The second problem that I find with product start-ups in the country is that most people design the software as if they are going to be present when the software is going to be used. It makes great sense for them to explain to someone how to use it, but if you want to be a software product company you have to design a product that can be used when you are not there. So, from a technical viewpoint fundamentally I would say that it is about being able to sit back and reflect upon these issues that impact your design. From a operational viewpoint, from day one you have to design as if you are not selling. It’s easy for you to design a product and for you to go sell it, because you’ll design your sales processes which are centered around your ability to sell. And this ability, because of your intimate knowledge of the product, will always be higher than someone else. So be able to design sales and service processes that are not operated by you will truly bring the product into the product category

You May Not Like Your Payslip, but We…Love It

SAP acquired Success Factors and Oracle acquired Taleo in billion dollar transactions. Workday recently listed at a billion dollar valuation. The boring enterprise HR software market is suddenly hot – red hot. This excitement is also rubbing off onto a decade old HR Software Product company from Bangalore that aspires to be the first choice provider of HR and Payroll Software to businesses in India.

Today, we hear their story in an interview with the Chief Executive of GreyTip SoftwareGirish Rowjee.
ProductNation: Welcome to ProductNation. We are really excited to speak to you. Please share your story and your journey towards founding GreyTip. Why did you get started and what prompted you? Please tell us all.
Girish: When we were studying in the 1990’s, the normal practice for most of the engineering pass outs was to do the GRE, get an MS and then get into a job.
Obviously, my co-founder and I did not belong to that dataset. So, during engineering, most of the times we were hanging around the Computer Lab, keen to do a few things around software. Primarily, we wanted to do something in India, not that we had any business plan, but that was the intent. We were driven by the sheer excitement of doing something real. Our first fling was with a Bulletin Board System in 1994, when we had just passed out of college in Mysore.

That is how the whole thing started.

Just to jog the readers’ memory, this was the time when the internet was nascent – dialup modem and text interfaces. But, we were thrilled at the prospect of writing software.

ProductNation: Girish, can you please share details on the equipment you had at that time?
Girish: We had ONE assembled 386 machine ably supported by a stabilizer. The big debate back then was whether we should take a 40 MB or a 120 MB hard disk, as the three thousand rupee difference was 30% of the capital that we had borrowed.

The Bulletin Board Service (BBS) had developed did not take off in Mysore, so we decided to move to Bangalore in November 1994 and start this company. It was called Delphi Software. We decided to stick to BBS in the endeavor to be an information portal for Indian consumers. We realized quickly that this may not work.

At the same time, we got an opportunity to work for a company called Brooke Bond Lipton. This was around developing reporting tools for their HR management information database. It was a new area and a new experience for us as we ourselves were getting introduced to data warehousing. But, we pulled off the project successfully.

Following that the HR team also asked us to build a HR database. It was a critical assignment as it was part of their KRA’s and the appraisal season was just a month away. We were able to do that job successfully as well.

That is how it all truly began. And when the HR staff from Brooke Bond moved to other companies, we followed and that is how we got more work.

ProductNation: That means in the initial period, you guys were helping out companies with IT services and special projects. Is that correct?
Girish: Yes. We even wrote ERP software for a garment manufacturer. At that time, it was the thrill of writing software that was driving us rather than money, business plan, topline and the works. We were making enough money from a self-employment perspective.

It was in 1999 when we started thinking on the need to move beyond a generic IT Services for Business approach. We started focusing on the HR software product. We already had 20 – 25 installations of the product. Payroll was an area we were comfortable with. At that time, many companies were doing payroll but the quality wasn’t enterprise class. That was the gap we were after and we had the competency to address it. With this the HR software product idea got crystallized. We stopped doing everything else and just focused on doing HR software product.

ProductNation: Those were the dotcom days. How did it all go? What did you name the product?
Girish: Yes. During the 90s, eight character names were needed as DOS supported only 8 character file names. And since our product stood for people, we had named it Folklore. We were one of the firsts to do e-pay slips in companies like Microland and Compaq. Customer referrals helped us acquire more business. Referrals have always been our critical channel and explain why we haven’t really invested big time into marketing initiatives.
Not everything was good. At the height of the dotcom boom, our development team left for better opportunities. So we had our share of ups and downs. But, we persisted and hung in there.

We drifted for some time and it was only in 2007 that we decided to go for the SaaS option in the pursuit of scale. It took us two years to commission the cloud based product. In the first year, we managed only 50 users in the Bangalore area. The cloud concept was still very new and market acceptance was very cold as compared to today. But, over the years companies started developing comfort with SaaS and cloud concepts. This helped our case.
2011 was a very good year and we currently have more than 1000+ accounts on our cloud platform. We expect more growth going forward and are feeling confident.

ProductNation: Girish, what have been you BIG lessons in your entrepreneurial journey – personal and professional? And what would you like to share with other young product entrepreneurs?
Girish: Any entrepreneur who is setting out for the first time would do well to develop an initial set of customers. These customers should see enough value in the offering. These customers should miss you when you are not around. This also gives the entrepreneur valuable validation of the idea – pricing, potential and scale. This I believe is a much durable milestone to target than VC funding or exciting financial models on spreadsheets.

ProductNation: Well put Girish. An initial set of paying customers sounds really logical, simple and powerful. What about lessons on the personal front?  How has it been for you? Any tips here.
Girish: Couple of things. One, an ability to dream and visualize your future realty now is extremely important. You should develop a fair idea how things are going to look two to three years down the line. And of course, an ability to follow that path in a planner manner.

Another is that you should have an ability to convince a few set of people into your vision. These people should be other than your customer – your employees. If you are able to develop this initial set of employees, it would help in your go-to-market.

Passion and desperation are absolutely critical to success. It is only when one is desperate that things start to happen. Money is just a corollary to the value one brings to customers. This is what I believe.

ProductNation: Nicely articulated, Girish. What is next for GreyTip? Could you share some of your future plans?
Girish: We want to the first choice provider of HR and Payroll Software to businesses in India. Across India, we cover about 51 cities and 1000+ accounts. We have gained traction online as well and we would like to focus on the online channel in the future. For this we would endeavor to reach out to Tier II cities helping out organizations with their payroll automation and statutory obligations. We are catering to both enterprise and SME organizations in this pursuit.

ProductNation: Thanks for sharing that. Any moments that you would always cherish as part of the GreyTip story. Would you like to share?
Girish: I would like to narrate an incident. There was a client of ours, a fairly senior person in the corporate World. He said that he wanted to come to our Bangalore office and talk to us. Generally, people don’t come over. So, we were a little unsure. He came over. And shared –“Look, We have used five softwares in the past. But after using your software, the only reason why I am making this visit is to say ‘Thank You’. You have done it for us and relieved us of our headache.” And coming from a fairly senior person, it just made our day. We were really happy that we could make a difference.

It is instances like this that drive us. It is moments like these that mean more than any award or bank balance. In the end, it is the joy of the customers that does the trick for us.

ProductNation: Thank you for speaking to Product Nation. We wish you and your team many more such unusual client visits. Good Luck, Team GreyTip.

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.

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.

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

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

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

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

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

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

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

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

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

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

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

Interview Cont’d

The Product Business is Like the Movie Business

I read the cover story in Forbes on the success of Dropbox, which is set to do about $240 million in sales in 2011, with only 70 employees. As Forbes points out, that is about 3x the revenue per employee of Google, which is no slouch in the revenue per employee department itself. First, congratulations, Dropbox! This is the type of breathtaking number that makes the ordinarily successful companies like, well, Zoho, to wonder “What are we doing wrong?”

In our 15 year history in Zoho Corporation – which is bigger than the Zoho product suite itself – we have shipped over 70 products, of which we would say about 30 have been successful in the sense of being nicely profitable. Yet, even with that group of 30 products, we have seen the 10x effect: a set of two products that have taken approximately the same amount of effort to build, by similarly situated teams, yet one of them does 10x the sales of the other, with both of them being profitable. Of course the 10-bagger is much more profitable but the key point is that both of them could be counted as successful in the sense of being profitable. We have even seen 100x difference for approximately the same effort, but in our case, that is the difference between doing only $100K a year in sales vs $10 million a year, and I would not count that as 100x because the $100K product either grows up or we would eventually discontinue it because it is not profitable.

Dropbox is a logical extension of this phenomenon, where a product does 100x the sales, without taking much more by way of engineering effort than a profitable 1x product. And then the grand daddy of them all – Google search, which in its heyday reached $1 billion in sales, on not much more than the effort of a single engineering team – the headcount gets added later to diversify the company but the original search was a small team. I believe there has only been one Google search so far, so the ordinarily successful (ahem!) shouldn’t feel too bad.

Y Combinator, which has funded over 300 companies so far, is a perfect illustration. All these teams are similarly situated, with similar founder profiles and they all get similar initial funding, and they spend similar initial effort. If we consider only the universe of profitable YC companies, my guess is that so far there is only one 100-bagger i.e Dropbox, in the YC portfolio. Based on Zoho experience, I would estimate YC has about ten 10-baggers, and about fifty one-baggers (i.e just about profitable).

Welcome to the product business, which looks very much like the movie business!