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Demystifying Growth Hacking

Too much has been already written about ‘Growth Hacking’. Having been into product space for quite some time, I believe growth hacking is probably the most confused jargon being used in the business world (mainly product businesses).

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Hence, thought of writing down my perspective on growth hacking by clearing out few notions around it –

For growth hacking, one should know coding?

I will say it depends on the hack. Some hacks will need a combination of more than one skills but sometimes a hack can be solely executed by a single function.

There is definitely use of technology as an enabler. Technology in growth hacking case generally need not correspond to hardcore coding but to a set of tools that helps you execute the hack quickly.

For example, trying different subject line for e-mails is a growth hack focused solely on content. What you need for it — probably a creative mind and an e-mail marketing and A/B testing tool (the tech part) but definitely not coding.

However if e-mail subject line has to be optimized based on results of earlier e-mail campaigns, then data skills is also needed. From data you should be able to make inferences and thus optimize the current campaign.

So it all depends on the use case.

Copying of popular growth hacks will also give you the similar results –

I think once a hack is in public domain and is widely accepted, then it is no more a growth hack.

For example, if you are a SaaS provider,  you would have known of that putting one price plan as ‘Most Popular’ have resulted in more sign ups for few products.

Should you implement it? Yes.

Will it deliver the same growth? Probably no when compared to products who tried when this hack was still in infancy, as now this hack is more of a hygiene.

However if you can even innovate a bit be it at UI, Content or something else that does the trick for you, congratulations! you have created a hack for yourself. And you need not split it out until you see the results getting flattened out.

 Growth Hacking is only about new user acquisition –

I believe, for any product there are four main metrics that is needed to be improved on a constant basis — User Awareness, User Acquisition, User Engagement and User Retention.

So any activity that can be used to improve any of the four metrics in the least cost or no cost (the ideal situation) can be qualified as a growth hack.

Would be glad to help in case someone needs more information.

P.S: check out this http://conversionxl.com/growth-hacking/ for more detailed view points which had emerged around growth hacking starting 2010 and this clearly tells why there is so much confusion around growth hacking!

Guest Post by Nishith Gupta

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When sales hijacks your product roadmap

Hey product manager, let me remind you of that time when you had the perfect roadmap for the market. You had it all sorted out (finally!) with engineering and were clear about what you’d build. Your teams had already worked on a few sprints and you felt that this time, you’d be able to get the product right.

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But then, your sales person turned up and said ‘I’ve just promised feature x to the client. We have to build it.’

You gnashed your teeth and got into an indignant fight.

The sales person just made your carefully crafted product roadmap look pointless.

How could he do this? You had just sent out your roadmap last month and said this is what he was getting. Why does sales always do this? Why can’t they just sell what you have, instead of pushing for what you don’t?

You take it up with your management, and maybe even the CEO, but finally are told that this client is just too critical, and you will have to build what the sales person wants.

You grimace, and feel all your passion drained out. Ok, you think, I’ll do it, but under protest. It’s my job to get it done, but it’s no fun anymore. Maybe you should just look for another job where they trust product managers over sales….

Let’s break out of the reverie. This is something that happens in a lot of organizations.

Most product managers have an ambivalent equation with sales. They need the sales team to bring in revenues, but hate having to accommodate what the sales persons ask (and always at the last minute at that!).

Is there a way out? Can you safeguard your product roadmap from mutilation?

To be honest, it depends on how your organization is structured and power equations within. But there are things you can do as a product manager to prepare for something like this.

Learn how sales works

A large number of engineers turned product managers look down upon sales as a necessary evil. They’re far more comfortable in the deterministic universe of building a product. Sales seem to be a profession for smooth talkers who care only about their numbers and not about the intrinsic product itself.

Unfortunately, this worldview makes life difficult for all involved, but is like a self-inflicted wound for product managers. You can complain about sales around water coolers all you want, but it’ll help more if you learn to appreciate how sales works.

In most of my product manager trainings, I ask product managers and aspiring product managers if they have worked with sales earlier. Many say that they’ve just accompanied a sales person on a customer visit. Often, they would be briefed by the sales person just before the meeting, and requested to not comment on anything beyond the demo. ‘Leave the relationship part to me,’ the sales person would say. If, during the meeting, they strayed from the brief, the sales person would try gesturing frantically to not say something that puts the deal in jeopardy. They usually walk out thinking that they should just send a junior the next time for the demo.

In my experience, I’ve seen that good product managers have a great understanding of the sales process and see themselves as team players in getting customers to choose your product/solution.

But I also find that most product managers have only a vague idea of how sales works. Sales is also a process, and most good sales folks have a keen understanding of how to get started in the market, generate leads, convert leads into conversations and go through the consideration-preference-sale process. Sales, especially enterprise sales, is a lot more strategy & structured approach than just numbers.

My recommendation to product managers who haven’t been through a sales cycle is to get a buddy in sales, and understand how they work. Not only does it make it easier to talk to them when it comes to client asks, it often gives surprising insights about how your product is used and/or what competitors are building.

Have different versions of your roadmap

Many folks are surprised to hear that you should have different versions of your roadmap. The sales team often uses the roadmap to sooth client concerns on whether your product/firm sees a long term view for something they need to invest in.

If you have the same roadmap that your development team uses, you risk the sales team aggressively committing to features to win the deal. Often, clients are speaking to multiple potential vendors, and there is risk of competitors learning about your product roadmap. There is also a risk that if the client signs off on a deal based on your roadmap, you have very little slack if things go awry (don’t they always?).

It often helps to have a ‘light’ version of the roadmap for the sales team to discuss with the clients. You could share the development roadmap in confidence with sales, but insist that only the light version be seen by clients. That way, the sales person also knows that he can reach out to check if he needs to share something from the development roadmap with clients on a case-by-case basis.

Negotiate

Most product managers know the art of negotiation with engineering teams to get them to agree on what to build. But good product managers also know how to negotiate with sales teams.

What does this involve?

Often, it means having the right amount of flexibility in your roadmap. Don’t look at yourself as a ‘mini-CEO’ who has to call all the shots for the product. At the other end, have your viewpoint that’s not based on what engineering can build or what sales tells you they can sell (this is why it’s important to know your customers well).

I’ve been lucky to work with sales folks who respect a well-articulated viewpoint on why a particular client ask will take the product down a path that will make it difficult to adapt for other changes later.

These conversations take the path of ‘how do we make this deal work?’ What usually follows is a negotiation on what we can tell the client, even if we can’t fulfil all his/her asks. This helps build a joint pitch on what we think is best for your business.

This doesn’t always work, but the process of negotiation with the sales teams often help build respect for your capability and reasoning as well.

Another factor that I’ve found helpful is to have a strong list of priorities for your product, and areas where you can be flexible. That helps in the give-and-take of the negotiation.

You may not always be able to prevent your roadmap from being hijacked, but you can minimise its impact with this approach. I’d love to hear your thoughts on this topic in the comments.

 

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8 tech products from India for the World

India has come a long way since its Independence on 15th August, 1947. One industry that has really shined for India is IT/ITES and that really have put India in a global map. The major contribution has come in the form of Software services with names such as Infosys, TCS, Wipro & HCL being the torch bearers. However, be it due to lack of media attention or for the lack of sheer scale, India is still not looked upon as a Product Nation that has created a global consumer or enterprise facing product such as Google, Facebook, Microsoft, Oracle, SAP and other such marquee names. It is a bit ironical that all these big giants have a size-able number of Indian minds working for them!

So, on the eve of Independence Day of India, let’s give a shout out to few products which are slowly and steadily helping India to become a Product Nation and inspiring many Indian entrepreneurs to dream big for the World!

#TechMadeinIndiaforWorld

Capillary Tech — Any retailer in the world if looking for a customer engagement solution, then Capillary probably will be there in the list of evaluation. That is the brand it has able to create for itself in quick time. It has shown that an industry specific solution can be also scaled up big time!

Crowdfire — It is a social media management app for Instagram and Twitter. Earlier know us ‘just unfollow’, it has really shown that to get users, the focus should be on user need and not on complex problems.

Finacle — Infosys should always be proud of on the success of Finacle. This has helped them take multiple risks in product and platforms space. Finacle has always kept itself up to date owing to change in banking customers’ behavior. The fact that banks are using it in more than 94 countries speaks a lot of its universal applicability. Finacle has shown that despite the parent company being service oriented, products can be created if given independence in execution!

Freshdesk — It started in an industry which already had multiple matured players in the market. But focus on UX, price points and its target customer needs, it has nailed the customer support space. And with its recent hiring, it has shown the importance of right leadership.

Tally — It is almost a synonym for accounting software. And probably the first global product out of India. Again have shown to focus on user problems than anything else.

Web Engage — It has redefined the way how products should engage with customers. Again it operates in a highly competitive space but with its focus on innovative features, has shown how a product should be scaled up.

Wingify — Just look at their main page and you will fell in love with its mission statement. Overlaps with the web engage space to some extent but the mission statement itself separates them out.

Zoho — The perfect example of how to run a product business. In the age where founders chase funding, Zoho has remain bootstrapped and keeps churning out a productivity product for a business problem.

These products inspires us at UX Hack on a daily basis to have the right intent and build for the World!

Guest Post by Nishith Gupta, Founder, UXHack.co

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Design Thinking- The UnConference way

Gerard Butler and his army of Spartans walking down the stone corridors of the beautiful and mythical surroundings of IIM-B paint a beautiful picture. It’s really not too hard to picture them there, blending in beautifully with the surroundings too.

Designthinking‘Preparing for glory’- Like the Spartans, Pensaar too is setting stage for the ultimate revolution. The UnConference, Phase-ll of the Design Thinking Summit is gathering traction and building from a 60+ gathering at Phase-l to now include 300+ participants.

Our existence being rooted in Design Thinking the day of reckoning, 26th August is going to be an action packed day covering various topics. It begins with Pecha Kucha and workshops followed by exciting interaction formats like fishbowl, socratic dialog, market place and world café. Tying it all together will be design thinking experts from diverse backgrounds, wielding their own special weapons and skill sets ( Added bonus- they decide to show up in their greek robes. We have sent them the memo)

Embodying the mission to raise awareness about design thinking and its impact we are thrilled to bring to you just that. Join us and our partners IIM-B and Intuit to take advantage of this unique gathering of people, after all it has been designed keeping you in mind.

Click here for registrations: designthinkingsummit.com and help spread the word #DTSummitBLR

Guest Post by Deepa Bachu, Pensaar

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3 Levels of Product Training for growth

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You have crossed the initial milestone of proving your product has seen some initial success, covered the MVP and now its time for growth…what is one key ingredient for growth ?

You are the rockstar founder or product manager…you have the urge to be omnipresent in every customer discussion or support call…you do a good job on this…but it’s a major deterrent for growth as you become the bottleneck…

The best solution for this problem is to put together a strategy for your product training.  Based on interaction with a startup growth entrepreneur’s request I had put few things, and sharing that in this post.

I plan to cover 3 levels of product training that I have personally learnt or done over the years to make products scale and be successful, the examples are more relevant to B2B but some of this can be used for B2C as well….

The analogy i have used here is of movies

Level 1 : Trailer – Targeted to people that engage with the Decision Makers who buy the product

Level 2 : Movie – Targeted to people that interact with users of the product

Level 3 : Making of Movie – Targeted to people that interact with administrators or consultants that configure, implement or support the product

Lets look at each of them in detail

Level 1 : Trailer training

This training is usually provided to Sales & Marketing teams who have the responsibility to engage and influence the decision makers, to buy the product. Certainly while the content stays high level , I have come across 3 questions to be covered in this training, that will help Sales to effectively position the product and get the interests

The three questions

Why buy ?  – This question establishes what is the real need for the product. What is the real problem that the product solves and why is it important for the customer

Why me ? – Having established the need to buy, the next question that needs to be answered is why me, why your product vs. other choices available in the market, what are differentiators, how is your product better in solving the problems and other objection handling

Why now ? – Assuming the need is established, and the fact that your product is the best fit, the next convincing part is the timing of the buy. The “why now” training should facilitate content that will help the trainee to engage with establishing the urgency, to get the decision to be made in a realistic time.

Coverage of the content

The content should cover the following to help with the above three questions

  • Benefits – the benefits of using the product , to improve the process, derive top line or bottom line savings or any others
  • Customer case studies – this is an amazing content to help sell. How are other customers using the product, their experiences, quotes, videos and other documents
  • Competitors – its important to know your competitors and how your product differentiates from them, this is an important area of coverage in your training
  • Unique differentiators – the product may have 100s of features, but there maybe certain ones which are the outliers or differentiators, there should be specific focus to highlight these in the training
  • Pricing and ROI – how is your product pricing done, what are the flexible options, what is the discounting policy, how do you combine products , how do you optimize revenue opportunity are some of the things that should be covered. Creating presentations and videos to explain the pricing with examples would be an important tool. In addition you also should have ROI templates that can help sales to justify the ROI for the customer, using relevant metrics that is aligned to the product’s benefits
  • Short demos – 2 to 3 minutes – This is the eye catcher demo (The Trailers), as its typically done to the decision makers, the demo should highlight the most important capability and it should also try to cover the overall value proposition of the solution. Remember this is the main tool that can help sales to create the initial interest or close the opportunity for approval.
  • Role plays – This is another extremely successful way to train people – the role play enacts how a customer facing person engages with the customer, bringing in relevant questions and dictate the engagement style to bring out answering the 3 questions
  • FAQs – you know answers to several questions, but its important that this knowledge gets out. A Frequently Asked Questions document or video should be a must have.

Level 2 : The movie training

This is to do with the actual product in more detail on how the users would use them. So this is essentially a training that is usually provided to Sales Consultants , Partners and Others who are likely interacting and engaging with the customer users – both during pre-sales as well as post sales.

Coverage of this training

  • Product feature functionality – going into details of the features and functionality of the product, focused towards customer users
  • Use cases – talk about different use cases that the product solves, every product may solve 100s of use cases, so its important to highlight different usage scenarios
  • Benefits in detail – while you cover the benefits already in level 1, this could further explain the details with more deep dives and examples
  • Product differentiators vs competition – detailed product differentiators, on various facets of the product and how this can help especially to cover the functional scenarios
  • Detailed demos (like the actual movie) – 30 minutes to 2 hours focusing on end user functionality
  • Role plays to explain usage of the product – detailed role play videos or depiction of how customers will use the product or how you can convince the users, for them to become influencers

Level 3 : The making of the movie training 

The third level of the training is for the people that engage administrators, implementer, partners and consultants. This covers variety of areas and really detailed and deep dive into the “how to aspects”. This is usually done to consultants , support staff and Business/IT administrators. This training is for mostly people who engage post sales, but essentially they should also have good understanding of the level 2 training, before getting here.

Coverage of content

  • How to configure the application, security, data, master data etc
  • How to trouble shoot
  • Detailed functional and technical architecture
  • How to demos or videos – detailed 2 hours to a day or even multiple days
  • Technical FAQs

So as you can see, if you can create the above training content and start training, it will certainly help you in your growth endeavors.

Offcourse you will also have to keep updating these content as you enhance your product.

Product Training , these days can be delivered in different formats – in person, webcast or through videos. But its essential for you to understand the importance of this and make it as a priority if your goal is growth

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Crafting experiences, which are awesome. by design #DTSummitBLR

These are exciting days for us at Pensaar. The Summit, which we have planning for a while is right around the corner.

Here’s what you can expect from our Summit workshop (Phase1 on 15, 16 and 17 July hosted at Indian Institute of Management, Bangalore). The co-creation session is carefully designed to be a completely immersive and experiential 3 days. You’ll learn how to understand customers, articulate insights that will inspire innovation, ideate till you get disruptive ideas that you rapidly test with customers. The entire conference is focused on learning by doing. And, what’s more you will learn design thinking with a group of 50 people across startups, large companies and academia. We are envisioning creating change makers. You will walk away – empowered and inspired.

We are thrilled to be partnering with Indian Institute of Management, Bangalore (IIM, Bangalore) to bring the Design Thinking Summit. We are humbled by the tremendous response that’s already poured in.

Designthinking

Our mission is to raise the levels of awareness for Design Thinking in India and elsewhere. Particularly in India, where we think we’ve had a strong legacy of an engineering led culture. Sadly though that legacy is a big factor in India being perceived as an outsourced development center. The opportunity though, as we see in every challenge, is to bring about the perfect marriage of engineering & product development with a design thinking mindset – a mindset posited on a user first, design led solutioning

In our experience, many teams and organisations are deploying a tactical workaround – that of hiring designers. Merely hiring designers isn’t enough, its critical for leadership teams to harness the power of design thinking to create experiences for customers, which are awesome.by design

But I get ahead of myself here. Let me back up here a bit.

What comes to mind when you think of Innovation? Ever so often, it means it’s a flashback to one of three ways we experience the pursuit of innovation across organizations:

  1. The Eureka moment
  2. Start thinking out of the box
  3. BOHICA: Bend Over Here It Comes Again

DT2Not surprising that companies (of every shape, size and origin) are struggling with innovation. Good work is happening, the right interventions are being made but these interventions are happening in silos. One is left with the feeling that “some secret sauce is missing”. Is there a secret sauce? And is it missing?

Design thinking is the answer. It’s missing for sure. But it isn’t missing as an ingredient – it’s missing as a mindset within teams and across organizations.

So, what is Design Thinking (DT)? Design thinking or Human Centered Design is a process for solving problems. It’s a perfect blend of divergent and convergent thinking allowing for a wide exploration of possibilities vs. being fixated on a single solution (a uni-dimensional solution)

We approach DT as a “disciplined pursuit of disruption”. Let me explain the 3 key words there:

  1. Disciplined: It’s disciplined, because innovation isn’t about happy accidents and good fortune (serendipitous innovation). We believe in “engineering serendipity” to get to the future we want to create (note: we don’t say get future ready, which is an ever-shifting frame of reference)
  2. Pursuit: it’s a relentless pursuit with rigour. To fully harness the potential of DT, you have to anchor it within the DNA of the team / organisation. For organizations to realize the full potential of their innovation capabilities, they need to look at it holistically, from up skilling talent, empowering them with the right processes, values and decision making, allowing them to push the boundaries of what’s possible
  3. Disruption: This is an oft quoted (largely misquoted) and we make an effort to make that distinction. Disruption is doing new things that makes old / existing things obsolete. Innovation on the other hand is just doing new things.

We are super excited at how uniquely positioned we are. And the DT Summit is our chance to share this unique perspective with the broader audience. We love diversity and we embrace it wholeheartedly.

We fight educated incapacity, because we bring to bear the power of design thinking, which is domain agnostic in its approach and application.

So, what is that Pensaar way of Design Thinking? Our process: Discovery —> Insight —> Dream —> Disrupt is designed around some core principles:

  1. Co-creation: We love co-creating with our client partners (and in turn, encourage our clients to co-create with their users / customers). We love to share the ownership of problems (product or business or social) and solutions we co-create.
  2. Designing for Human behaviour: We love technologies (emerging and disruptive) but only as the means to the end. We believe humans are the best technology and our emphasis has always been on designing solutions for behaviour change – human-to-human interface. (No we don’t think apps are a business model)
  3. Problems & Goals focused: We are obsessed and fall in love with problems. Our approach has been carefully designed to avoid the path of least resistance. To be honest, it does make a lot of our partners edgy, because we spend a disproportionate amount of effort in building customer empathy, generating insights and carefully crafting that problem statement.
  4. Addressing a genuine human need: Most product / business failures come from lack of customers and NOT products. That’s really from NOT understanding customer’s evolving needs and yet trying to design a fancy product. Unless you’ve understood the customers real pain points and his/her hierarchy of problems, any product, no matter how good it looks on paper – its bound to fall short of its potential
  5. Assumptions test: It’s simple really. Any idea or thought you have, is a hypothesis, which needs to be tested. Without, rapid experimentation to test for assumptions and hypothesis you aren’t managing the risks in favour of success.

We can’t wait to meet you and co-create with you at the workshop. We hope to see you, both at the workshop (15 – 17 July) and at the Unconference on 12 Aug.

Please do share this event ‪#DTSummitBLR http://designthinkingsummit.com and help us spread the word on the summit. 

Guest Post by Venkat Kotamaraju – Growth & Strategy Leader, Pensaar

 

 

 

 

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Because designers need to know *about* code

This is a about a long raging debate on the process of designing and developing great products.

In a recent Medium post, Jesse Weaver said something very simple but powerful — we need more designers who know *about* code. And I agree! Not only because I myself like to experiment with code but also because of the following.

“The reason designers should know about code, is the same reason developers should know about design. Not to become designers, but to empathize with them. To be able to speak their language, and to understand design considerations and thought processes. To know just enough to be dangerous, as they say.” – Jesse Weaver

This thought does enough justice to the whole debate around designers and coding. Now how much should designers know about code and how should engineers reciprocate is a different discussion. Given that we have Chrome DevTools and Framer.js today, it should be simpler.

So what does this lead to? This requires designers to go beyond the usual. Talk to engineers and understand their environment — ask stupid questions. By doing this, our usual work, experiments and hacks become easier and more fun. Now isn’t that worth it?

Guest Blog Post by Amal Tiwari, Yawasa

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Identifying King Customers and building your business around them isn’t that easy!

“Throughout history, it has never been easy to identify a deserving king!”

I attempted to address this in my previous post, in the context of customer strategy. I proposed Customer Lifetime Value (CLTV) as the key metric to identify king customers. However, I’ve found this philosophy extremely difficult to follow, which is why I wrote this post. It’s okay if you have not read my previous post. You will still benefit from this one, as you will understand why you need to chase CLTV as you build a sustainable business to attract lot of king (loyal) customers!

Business around CLTV, why?

It’s simple. If your business is on an upward trajectory, then CLTV for most of your customers will also be going up. And if CLTV is going up, then almost certainly, most other important metrics of your business – sales, customer acquisition or repeat rate, order value, and profitability – would also be improving. But the vice versa doesn’t necessarily happen. Don’t agree? Read the footnote for few examples & dialogues with self!

Okay, is it difficult?

Yes, somewhat! You never run out of uncertainty & difficult questions if you are in a high growth business! Now, add these to the list too 🙂

a)    How do I calculate CLTV?

This post by Patrick Deglon on calculating CLTV captures it really well. You need to make sure you include elements of profitability, and not only sales, in CLTV. And if your business changes very fast, then consider ways to implement a predictive CLTV based reporting infrastructure. Remember, what helped you increase CLTV of your customers in the past may not help now. I have also come across Custora, which seems to have developed a decent solution for predictive CLTV reporting.

b)    Are the ones with highest CLTV the only king customers?

Not always. History is quite clear – kings who became kings because they made efforts were much better than the ones who merely inherited the title. So, always ask, is it something you did or something just happened? If you don’t attract sufficient number of high CLTV customers, look at realigning your product (including any customer touch point) and marketing strategy.

c)    How should I treat customers who have high CLTV just because of one transaction?

If such customers typically don’t repeat, then don’t lose any money on them. Just ensure that they feel delighted while interacting with you at any point during the transaction. Simply speaking, they shouldn’t have a reason to avoid you. However, you definitely need to design a more aggressive (CRM) strategy for customers who are likely to repeat. By the way, you might also consider ways to discount CLTV for lower repeat rates.

d)    What if customers aren’t yet ready for a royal treatment?

If you think that investing $$$ on CRM strategy won’t significantly move the needle, then do lots of small experiments on cohorts of users you want to grow; find out what really works. In a high growth, uncertain business, customer loyalties may appear elusive but aren’t absent. Just like at times of war, kings knew who their friend was, and who was a foe!

e)    Why should I not treat all customers as kings?

You have to differentiate and make sure your special customers really do feel special. You need to create reasons for them to develop loyalty and enjoy something extra for doing business with you.

Now what?

Thinking in black and white never helps! You can apply different tactics for different cohorts of customers. In fact you should look at ways to put CLTV as an important dimension of every possible cohort you can visualize. For example: x-axis for CLTV and y-axis for repeat rate/ NPS / visits / issues / resolution time / etc.

As you design specific interventions, keep in mind that your actions don’t alwayshave to be around selling. Use engagement-driven tactics that help you come across as a caring business; e.g. sharing useful information around products or just telling what’s new. And most importantly, you never want to design your engagement strategy solely around incentives because you don’t want to come across as a purely transaction-centric business.

As I conclude this post, I know, we tend to look at different metrics with each phase of growth. However, we must not forget to keep our focus on metrics that pass the test of time. If you are building a sustainable business, then make sure your metric also is, because

“Kings come and go, but kingdom seldom does.”

*Footnote (dialogues with self):

Under each of these examples, an important metric may be improving but at the cost of another, which is why CLTV always has to be at the forefront.

1) My sales are growing. But wait honey, you aggressively pumped $$$ into marketing campaigns, and that doesn’t always translate into sustainable sales or profits!

2) My customer repeat rates have gone up. Interesting! But why are most of your customers now buying inexpensive, frequently required goods? Diapers, really! Come on, that isn’t a sign of loyalty unless you can sell premium perfumes too!

3) My order value and overall sales have grown. Cool, did you just fund huge discounts on big ticket items?

4) I’m now profitable. Quite! Don’t celebrate yet. Are you sure these aren’t just a handful of customers driving all your profitability? Or worse, if you recently launched a profitable but non-differentiable service, you know deep down that your competition would soon catch up!

(A special thanks to Nikhil Dwarakanath for sharing his perspective; thanks toCandice Martins for reviewing the final draft)

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Becoming Cash Flow Positive In SaaS Business & Growing Revenue By 3 Times In 3 Months: The ShieldSquare Story

In Q1 2016, we saw our hard work payoff. We achieved some notable milestones. We became cash flow positive and our annual revenue rate (ARR) grew by 3 times in 3 months. We expanded our customer base to 68 countries (with over 90% of the revenues from outside our home base), and doubled our team to 50. Our Average Revenue per account (ARPA per year) has doubled to $10,000. Above all, we pushed ourselves to become one of the top 2 bot prevention vendors across the globe!

This is quite an achievement, and I’d want to share some of my learnings on what worked, and how we got there.

Who Are We?

We are ShieldSquare – a startup based out of Bangalore that has come up with a world-class solution to fight bad bots that scrape content, spam forms and engage in various forms of site abuse. We started off in late 2013 with a founding team of five incubated at Microsoft Ventures Accelerator, Bangalore. We worked hard on building the product and refining it by working with early customers till the first half of 2015. We launched ShieldSquare for the global market in mid 2015 and started getting good traction. We decided to shift gears and accelerate the business growth for the year 2016 and this is how we went about doing the same.

Expanding To Outbound Lead Generation Channels

We initially focused on a low-touch approach in getting leads via inbound channels. With the right keywords, and after a lot of optimisation, we became the No.1 in search ads. We started getting a good number of leads, and this also helped us secure a top global financial portal as our customer.

However, as the average deal sizes through the inbound approach were small, we kickstarted our outbound marketing campaigns with aggressive sales targets. We launched personalised email marketing across different verticals, analysed the technologies our prospective customers were using and focused on them. This helped us reach out to the Europe and US markets, and win marquee customers – still keeping it a low-touch approach.

Incentivising Customers To Opt For Longer Duration Plans

We wanted to have a win-win situation for our customers (lower total cost of ownership) and us (cash flow and predictable business growth). We removed monthly subscriptions, and started providing significant discounts to customers that opt for annual subscriptions. Why? Because we believe that the the cash paid today is many more times valuable than the same amount paid after a year. If the valuation of the company increases by 5 times over 12 months, the cash being realised now is 5 times more valuable than the same amount realised after 12 months. We now plan to expand this strategy to incentivise customers that go for 3-year subscriptions.

Then Came The Growth Hacks!

Our regular efforts resulted in regular leads, but we wanted higher conversions with minimal touch.  We  launched a few growth hacks that are first in this industry, to increase our conversions. Our free-forever diagnosis plan helped our prospects try, and experience our product with no upfront commitments. Our free tools  ScrapeScanner and BadBot Analyser  provided reports that enabled our prospective customers understand the need for ShieldSquare and prioritise it internally.

scrapescanner free tool

Wise Investments To Achieve Growth

One way for businesses to reach positive cash flow is to get the team to work 2 times harder, cut costs, and the like. But our team was already working 2 times harder and our costs were tightly managed.   Another way—the more sustainable way—to reach positive cash flow is to grow revenues! We chose this path for becoming cash-flow positive!

  • Growing revenues require building solid sales, marketing and product teams, and we invested on growing our teams across functions and bringing in passionate talents to drive these teams.
  • There are certain things that might seem unimportant, but rather carry great value. Our employees at Bangalore enjoy free breakfast, lunch and snacks, while the same will be implemented soon for our folks in the Chennai, who are already beating the heat with the free tender coconuts we offer twice a day.

It’s Ok To Say “NO”

In business, priority is everything. 20% of the activities we do contribute to 80% of the results. Here’s how we prioritised things to be more productive:

  • We steered our focus away from activities that are of less or no value to our business, like attending feel-good/networking events. Rather, we reached out to our advisors and mentors whenever we needed guidance and advice.
  • We have restricted ourselves from meeting prospects until we qualify them. But we keep engaging with various players to get better educated about the market, trends and customer requirements.
  • As we were focusing on building the business and not raising funds, we have politely refused the calls and meetings from VCs who wanted to know about the business. Yet, if any of them insist on learning more about the exciting things happening at ShieldSquare, we invite them to our office to meet the team. This really works as only those who are serious will come to our office to have a conversation, while the others drop out.

Strong Foundation

We have promised ourselves that we would never compromise on the core values that took ShieldSquare to the global audience. It would have been impossible for us to be in the global top 2 position in our space, if not for the following:

  • A world-class SaaS internet security product that caters to  the problems of customers
  • Self-serve platform that requires minimal effort to integrate
  • Strong 24×7 support processes to help our customers
  • A great onboarding experience for customers using diverse tools

The aforementioned are the key learnings from our own trial and error experiments as well as interactions with our awesome customers and advisors. The key takeaway from these learnings would be to believe in our own instincts instead of reinventing the wheel.

The overall experience of developing a stellar security SaaS product for the world was amazing! As it turns out, the feedback we get from our customers are equally overwhelming, and yet it reminds us of the fact that the journey has just begun, and we still have a long way to go.

Guest Post by Pavan Thatha, Co-Founder & CEO of ShieldSquare, one of the fastest growing Saas Security company globally.

 

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How to identify and track the right metric?

“To know how to measure the success, is to know how to achieve it”

A few days ago while discussing complexities of managing a product portfolio, Uday asked me a simple question: what is the most important metric one should use to measure product performance? I suddenly felt dumbfounded because I didn’t have a clear answer. Though I could have used my heuristics to throw suggestions such as ARPU (average revenue per user), engagement, and churn rate, I knew that the thought process was more important than the metric itself. A good metric allows taking action, a bad one only provides some data. So Uday and I decided to jointly answer this question by creating a framework, which Uday will illustrate with examples from his experience. So here are the four steps:

1) Define what the big success looks like

This is the most difficult step and perhaps half the work. This requires you to see the big picture and yet relate to all the parts. But you can perhaps do it much easily, if you start thinking of success in pure binary terms. So everything succeeds, if this one or two things happen right, else everything fails.

Uday: At my previous startup, I was looking at the dashboard which tracked conversion funnel. I knew that just looking at growth in number of visits, free users, and paid users would only paint a rosy picture, and not necessarily the most accurate one. Clearly, the single most important goal for my company to succeed at this stage was ‘growth in paid user’ and ‘longevity of paid users’.

2) Break down and prioritize on the basis of need and controllability

Now that you have one or two big metric from the first step, you need to start breaking them down. Once you break it down in different parts, start prioritizing on the basis of what answers your most pressing needs and what you can control. It’s okay to combine multiple variables to create a super metric.

Uday: I decided to steer away from vanity metrics like number of page views, which were simply non-actionable for me. I focused on 1)  (CLV), which captured engagement (longevity) and reflected whether we were on track to become a sustainable business (revenue/growth); I used cohort analysis for this. 2) Net subscribers (new paid subscribers – cancellations on a given day), which helped us capture change in two important things in one attempt – number of free users converting to paid users and cancellation (super metric).

3) Locate the right data and evaluate cost

Now you know what you want to track, you need to find information to do that. Remember, available information can be cheap, but retrieving it in desired format, not always. If some information is easily available and helps you answer ~85% of what you want to track, make adjustments in your metrics and go ahead.

Uday: Although all data was readily available, I had to make additional efforts for conducting cohort analysis with CLV (the cost!). Later on I got a dashboard developed to do the same, without having to resort to excel every time.

4) Develop, present, and revise

This is more like a hypothetical step, before you actually present the final metrics. Imagine that you’re presenting your metrics to someone important. Think the questions they would typically ask. If you are able to justify your choice of metrics and explain why you didn’t include a lot of other metrics, you’ve done a good job. Else, revise.

Uday: I made all the reports / dashboards simple, comprehensible, and differentiable. I was ready to answer questions like how I was already baking in conversion rate, active users, and paid subscribers in my choice of metrics. Sometimes I would separately include information for my marketing team which would typically ask for these baked-in metrics. Lastly, since cohort analysis was the basis of my analysis, I’d put a foot-note for those who didn’t understand it well.

Remember

  1. Understand the difference between absolute and relative terms. Often, we need a combination of both to create an accurate picture.
  2. See the forest for the trees. Your selection of information or metric should try to capture major trends, opportunities, or challenges.
  3. Don’t go online right away as you start brainstorming. You have to understand what answers your business questions, not someone else’s.
  4. Go online once you know what questions you’re trying to answer. Taking ideas from how others did it efficiently is good once you understand your problems better.
  5. Keep it simple. Does it require any explanation? 🙂

A well-thought metric allows us to deal better with uncertainty of decision making, with a precision of action. And the next time someone asks me to include another metric in my analysis, I don’t want to respond by saying ‘sure, I will include that next time’. Because everything which is necessary, would already be there!

(Co-author: Abhyuday “Uday” Chakravarthi, image credit: Dennis van Zuijlekom)

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5 Types of People Every Startup Should Hire

It takes passion to start up and convert your idea into a moneymaking business. However, passion alone is never sufficient to succeed in a business. It is people that make business happen; the ‘right’ kind of people.

The core team plays a key role in shaping the future of a startup. It is the moot point that sets the course for the future. Hence, it is imperative that the founding team comprises of people with the right credentials, zest and attitude since they serve as role models for the rest of the team to follow.

The founder or the core team should ideally have the following qualities:

Visionaries

They know how to think long term and can develop a rock solid vision for the company. They have a clear objective with regard to growth and how to take the company forward. They are able enough to provide insights with a panoramic view of the business and know how to meticulously plan long term. They are innovative and have a diverse view with regard to business and its growth.

When starting up, you most certainly need a visionary to provide direction to the team at every stage.

Money specialists

Their key attribute is that they are good with money. They know how to strategically invest and will help the startups keep expenses under control. The right people who specialize in money management can help straighten up your sales strategy and attract money from various sources. They know their numbers and know how to play well with them. Having a golden goose in the company certainly multiplies the chances of success manifold.

People’s persons

Such people have the knack of knowing just what it takes to bring the best out of everyone. They have great interpersonal skills and understanding of what motivates others and can put their influencing skills and tact to good use in the best interest of the business. Be it managing a team to deliver the desired results, to influencing a prospective client or accomplishing some liaising work, they are the go-to people.

The all-rounders

These people have probably been on the other side and handled all aspects of running a business, either as an entrepreneur themselves or as a manager. This is a definite advantage because not many first time entrepreneurs know how a small decision can impact the entire business. Their insights can, therefore, be really handy for a startup.

The connector strategists

The mind of the strategist can create what is important and destroy what is hampering the progress. They bring growth by analyzing every process and tweaking it to it optimum levels. They are capable of creating new processes and strategic goals of the business that help you leapfrog. Without a strategist, your business will lose its sense of direction to proceed in the chosen path. You will get a stepwise heads up on how to go about implementing your business goals. Whether it comes to product launch or sales strategy, these people specialize in how to make a business goal effective and see to its end. They are the geniuses that know to get to the bottom of things and choose the right method to achieve a business goal. They are the experienced insiders who understand the landscape of marketing and sales. They are communicators and connectors who know how to connect you to diverse people to help your business grow.

The core team forms the foundation on which the startup rests. A mix of people with the right expertise, energy and attitude is what is needed to ensure that things fall in place as planned in order to make the vision come alive.

VU-Picture

Guest Post by Vikram Upadhyaya, Chief Mentor & Accelerator Evangelist at GHV Accelerator

 

 

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Using the product roadmap to keep an organization in sync

When organizations are relatively small, it is possible to keep all parts of the company – execs, PM, sales, engineering, QA, operations, etc – in sync with the direction and with the vision of the company. Communication across the company can be seamless and everyone can remain aligned to what they are working on and understand how their work maps to the broader vision.

However, as companies scale up, it is very easy for this chain to be broken and for a hitherto finely tuned company to get out of sync. Examples of this happening:

  • Deal-driven features: Sales promises a feature to a customer to close a deal and it gets added to a plan. After a few months, everyone forgets about it and it gets dropped. Eventually it blows up as an escalation when the customer is now upset that promises were not kept.
  • Vision changes: The exec team makes changes to the vision as the markets changes. This requires a replan with new features coming in and some features in plan being dropped based on shifting needs. This does not get communicated down the chain and development remains marching to an older beat.
  • “All Features Accepted”: Every few days a new feature request comes in and gets added to the plan. Nobody says “No” early enough, a commit gets communicated externally and in the end the product becomes a mish mash of features, with no clear vision and becomes impossible to use. Without a consistent plan that resonates to the vision, the product manager risks putting out a product that makes noone happy. The PM is the gatekeeper to avoid this from happening.

These are all examples of breakdowns in communication. It is the product manager’s responsibility that this does not happen. A product manager can use their product roadmap as a central part of a simple process to make sure that all parts of the company remain in sync. Changes will happen – that is a part of startup life – but the important thing is to make sure that the changes as they happen are clearly rationalized, communicated across all teams and all teams are kept in sync with where things are.

The best product roadmaps define the themes of the market that are relevant, the long term vision of the product (about 2-3 years out)  as well as the shorter-term term features (quarterly breakdown over the next one year). While this is maintained by the product manager, this should be communicated regularly to the sales, dev and engineering teams. The product roadmap should be shareable externally to prospects, customers and other external stakeholders. Done right, the product roadmap becomes the central part of the process of keeping the various teams in sync.

Product Alignment Process

The process involves creating:

A vision document : Simple 1-2 pager describing where the company will be in the next 12-24 months. This is done in concert with the execs and aligns with the company’s overall strategy. This is shared with everyone in the company and externally as well. Normally this is part of the lead-in to a detailed roadmap but sometimes this can live separately (especially in multi-product companies where the vision is broader and maintained by execs). This is versioned and is available to everyone.  I prefer the use of Google slides with read-only link shared across the organization.  A well defined and strong vision ensures that any feature request that does not align with the long term vision can be dropped early. The product manager meets regularly with the execs and keeps this in sync.

An external “one-slide” roadmap : This is the product roadmap as it is traditionally defined. The deliverable here is a simple one-slide roadmap showing the quarterly deliverables of the marketable features for the next year. This can be shared externally. As above, Google slides with a shareable read-only link works great here. It is versioned to be consistent with the vision document.

XYZ Car service Road mapFigure 1 : Example external roadmap for a fictional car ride share company. One Google Slide with the next 4 quarters of marketable features.

An internal / detailed roadmap: This builds on (2) and adds internal deliverables – like performance improvements, UX changes, engineering focused tasks, etc. This is the detailed, internal-facing roadmap. This version allows the team to make sure that the engineering focused improvements are not lost in the shuffle. This allows the team to make progress on reducing technical debt while continuing to execute to the market.

XYZ Internal Roadmap
Figure 2 : Internal roadmap shareable with dev and QA managers. One google slide that builds on external roadmap.

The details from the internal roadmap are then mapped to a tool that allows for backlog tracking and planning. I prefer Trello for a Kanban-like tracking system but there are various other tools that work very well. 

Trello schedule

Figure 3: Using Trello to schedule the work outlined in the internal roadmap as a set of cards

Sprint planning: With the details from (3), PM works with dev management to build out the detailed plans for each sprint and map it to a tool to track this (I prefer Atlassian Jira) for this. At this level, this is really a detailed work plan that’s aimed at PM, dev and engineering teams

 

Xira screenshotFigure 4: Using JIRA for sprint planning. See blog for more.

And thats it.

What we have done above is create a predictable system where all product planning deliverables are kept in sync with one another. There are three critical attributes to making this process work:

  1. Versioning: All the documents above should be synchronized. The latest versions of each should all relate to one another. Where a change is made, the older version should be versioned and there should be a clear indication for the reason for change. It should be possible for any stakeholder to review past documents to understand the reasons and the velocity of changes.
  2. Relevant Access: To avoid irrelevant information being communicated to the wrong audience, appropriate access should be given to the right stakeholders for the vision (everyone), external roadmap (sales, execs, PM), internal roadmap (PM, execs, support leads, dev leads, QA leads) and detailed sprint plans (all dev and QA)
  3. Single Owner: One owner should be responsible to make sure that they are in sync. The PM should own 1-3 above and work with engineering management to align it with (4)

Summary

Plans can and do change. The product alignment process defined above allows for the different planning documents across the product organization to remain in sync at all times so that as these changes happen, they can be rapidly and consistently communicated. This allows every employee to be confident that the work they are focused on is in sync with the vision of the company. And that will help the company move quicker and more efficiently as a result.

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Write up the Business Plan !

Most of us have read the famous story about Jeff Bezos’s cross country trip from New  York to Seattle. Bezos founded Amazon.com in 1994, writing up the  Amazon business plan on the way. Jeff’s important advise for startup company or any   company is to write up the business plan.

CrossCountryJeffBezosadvise

Now if Jeff Bezos has done it, and become one of the most successful entrepreneur in the internet era, why not just do it ? By writing it down, you will certainly get a lot of clarity and reference point for what you want to achieve….

Here are some thoughts of what and how should this business plan be written to become a continuous reference point for your startup and growth story. The examples and references of this is more on Software Products in B2B (Enterprise) based on my own experience of writing business plans and working with startups whom I have mentored, however many of this can be relevant for Software Product in B2C (consumer) as well. Also this business plan should be ideally written by founder or a product manager…

What it is and some guidelines?

  • It’s an internal and confidential write-up – Don’t confuse it with presentations and business plans to be shared with people who will fund this – that should just be a subset of this
  • Is reference plan, and should be revisited frequently to change
  • Prepare it in word /excel, bit free form with text (power points constraints you)
  • Prepare atleast 3 scenarios – aggressive, best estimate, conservative plans
  • Do it for 1 year (short term – in greater detail), 3 years (medium – bit higher level) and 5-10 years (long – very high level) – Remember Bill Gates quote “Most people overestimate what they can do in one year and underestimate what they can do in ten years.”
  • Write it free form, and then organize it later, go through several iterations, review, review and review

Start with a summary:

Like an executive summary, this is the place you start jotting down the highlights of your road ahead – covering Introduction of yourself and the team, your idea, product space, history and market definition (presuming you have researched it), clear USP & value, challenges & risks, and overall KPIs that will come out of the rest of the business plan. The summary is most likely to change once you have written the rest of the plan.

Customers & Personas:

Who are the users, what are their current problems and how does your solution solve this problems.

Who pays for the software, what are their challenges and what are their company /career goals that the software would help solve

What are the financial/non financial benefits for the customer based on using this product or the cost reduction using the software, measured by productivity etc. Can there be a customer ROI estimated

Market:

Define the market category and market size ie today, and in the future that you want to focus. Try to break down into 2 – 3 levels of hierarchy and in a multi dimensional way by Business type /Geography / Revenue potential of customer/Size of the customer or any other business context.

Define the share of the market you would like to achieve of the market size, on key market segments in 1/3/5 years. What’s the customer IT spends planned for solving such problems

Market is the most key aspect that is going to drive you to successful product, so understand the potential market, research and put it in there

Product:

Now on to the product – write up about the product, to cater to the above market opportunity, with lot of details and value propositions, differentiations and what problem it solves.

Whether the product you are planning is a pain killer, vitamin or vaccine…

Product priorities and use cases – focus is the key, focus on the key market, focus on the design and so on and so forth…

Product Roadmap – at level 1 (vision), at level 2 (product category ) , at level 3 (feature /function level). Product roadmap is your product in the growth face

Competitors and other players in the market, and what they have today, in their roadmap or what they are trying to do. Your differentiation against each of them,plans to differentiate. If you don’t know it, some tips for this are here

When will your product be available , the minimum viable product and is there enough time to get the baby out ?

Monetization:

How do you plan to monetize your product, don’t build a plan that ignores monetization.

Revenue and Customer Goals – Quarterly, yearly and medium/long term goals, subscription revenue including projection of drop offs etc.

Pricing model description – different options to be considered, domestic vs international, subscription based vs fixed etc

Risks , probability and dependencies to achieve these goals

Technology:

Explain the technology used for the product, how it would scale, Ux differentiations, clear differentiations due to tech architecture, performance, simplicity, implementation effort. Important this is not technical architecture , so keep this high level.

Talent:

What the skills required to sustain the business – development, design, sales, customer support, channels marketing etc. Challenges & risks associated with this.

Identify gap in availability of talent.

Layout if its important for you to relocate to be successful, due to availability of talent. Place is super important for success – what are the options – what are the pros and cons.

Customer support & feedback:

What is the strategy around customer support & feedback, how product roadmaps are affected by feedback. Level of engagement required initially and as the product matures.

Past learning’s from customers, what went right and what went wrong. How was it addressed?

Challenges of remote support and how it was addressed /planned to be addressed

Draw your effort, cost and cash flows:

You don’t have be finance person – its like putting forth your personal finances, or just google for templates  – put together your estimate of people cost, server /cloud Operating costs, sales & marketing costs, other infrastructure cost – space/communication/support/software etc,  any other expenses required to do scale the product. Link this with your monetization plan, to ascertain your overall profit or loss over the years.

As you see above, there is a lot that can be written up – as you write up in detail, your thoughts on what you are setting forth gets clearer….

But don’t worry if what you plan is not exactly how it’s all turning out to be in reality…..but its important to have a plan, adjust it for reality…

NYCtoSeattle

So now pack up and start off on your cross country trip from Mumbai to Bangalore, to write your Business Plan in Bezos style  !!!

 

 

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Your Product Roadmap is your Product

After building, marketing and selling lots of software, I’m convinced that the single most underutilized component to driving growth is your roadmap.

In SaaS or consumer products monetized via an enterprise budget, you make your numbers because of your current feature set. But you blow out your quarter because your product and sales teams present a roadmap that explains the customer’s future state, if they have you as a partner.

When done correctly, the roadmap expands the number of tentacles to grab more customers and dramatically raises the value of every deal.

In the formative stages of building and selling your product, your current feature set is absolutely vital. At growth stage however, your in-market product is not really your product but it’s your proof point. It’s your cheapest and most effective form of marketing. At growth stage it’s your product roadmap that’s really the product that’s going to attract senior executives making 3–4–5 year bets. Because with continuous deployment or daily / weekly releases, the in-market version your positioning is obsolete by the time the customer gets value from it.

Here’s what it’s not.

A roadmap used during the sales cycle is not the same deliverable you share with engineers. That’s necessarily tactical and solution driven. It isn’t a litany of features broken out by quarter for the next 18 months. That would likely break forward-looking rules anyway.

Here’s what it is.

  1. Its the ethos of your business that guides the choices you will make when enriching the offering. In our case, we have a track record (21M+ subscribers) of finding white spaces left behind by traditional transaction software. The design ethos that guides and motivates us is to continue to employ collaborative models to go after these white spaces to deliver big efficiency breakthroughs for our customer’s employees, customers, and partners.
  2. Its a thematic, executive-ready, sales consumable illustration of what problems you will keep solving for. A commitment to solving thematic problems that your target customer base struggles with to consistently drive revenue, reduce cost or mitigate business risk. Or you will have missed the mark. Jared Spool and Bruce McCarthy astutely describe themes “a promise to solve problems, not build features”. And that these themes must remain consistent.
  3. Yes, a healthy dose of tactical capabilities. In practical terms, you are always 5–10 features away from completeness, in the program owners mind. The program owner needs to know you are on it (or be clear the you don’t plan to) to be comfortable that she can get quick wins with the purchase. So by all means, include this. But know that whilst its one of the needed components, it isn’t the one that expresses the strategic thrust behind your offering.

Elon Musk epitomizes this. He presents what problems he will keep solving for, in the coming 24 months. Take speed: He markets the Ludicrous Button. Because a stated top speed is a feature. And that’s finite, and therefore limiting. Tesla’s Ludicrous Button is a design ethos that will keep drawing customers. Because they know exactly what future state of the art they are buying into.

It’s amazing how much time a product and sales team will focus on tactical capabilities or agonize around pricing options of current products to make its past as attractive and available as possible. Yet they will guard their future plans by restricting access to the roadmap like it’s the secret sauce.

Well the customer facing roadmap is the secret sauce in your sale.

Executives know that they, nor you, can predict the needed solutions of the future. All they want to be convinced of is that both they and you will be aligned on the same problems that need solving. That’s the only constant.

Expressing your roadmap is the basis for competing effectively. And this needs to be ingrained in your key product management, product marketing, sales enablement and sales execution processes.

It’s a hard slog to make your number based on your current features. So consider selling your roadmap. I’m convinced that it’s like wearing flippers to a swim meet.

Guest Blog Post by Sameer Patel, SVP, Product Management and Go-to-Market, SAP Cloud / Successfactors. the original article can be accessed here. 

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5 Questions You Should Ask Before Launching A Product Startup

The number of startups launching every month is growing at a fast pace. Some entrepreneurs opt for a service based model, while others like me go the product model way. Although, there is no clear winner in terms of which model is the best, right or a deal breaker, there are many factors that contribute to the success or failure of startups.

However, when I launched my startup Sainergie, an IT products and services provider, I realized that running a product startup is fundamentally different from a service startup. Apart from a few other steps, you need to take care of idea generation, design, prototype, development, testing and iterations, before you actually launch it. A sizeable amount of resources such as capital, time and energy has to be spent, believing that you are really developing an amazing product that will sell itself. Well, if it was only that easy!

There are several factors you need to bear in mind while launching a product startup. I am listing them here based on my experience.

Is there a market?

You have developed a great product. At least you think so. But, is it good enough for anyone to buy? Does there exist even a little or a niche market for your product? According to an article published in Fortune, the ‘lack of market need’ was the top reason due to which most startups fail! It may even happen that you are ahead of the market curve, that is, customers do not require your product at the time which you think is right. Or maybe, the need is there, but there isn’t an appropriate supporting technology.

For instance, Pebble, Apple and Samsung are among a few leading brands in smartwatches today. But, it was Microsoft who launched it about a decade ago, only that it failed because it was as much a matter of bad timing as that of a poor design.

So, don’t jump to the product development stage straightaway. Put efforts in conducting in-depth market research, studies or surveys to see if the time is right to bring your product in the market.

Are you trying to innovate or reinventing the wheel?

The debate regarding which is better – innovation and reinvention of the wheel, isn’t new. Every product entrepreneur delves on this question before going to the drawing board. But, let’s first understand the difference between the both.

Innovation is building a product that brings a paradigm shift in the customer behaviour. It provides a novel solution in addressing the customer’s pain point. For example, FusionCharts, the provider of interactive JavaScript charts, is one of the most innovative technology companies that disrupted the data visualization industry. Reinventing the wheel is about coming up with a new or a creative idea to change or improve a product that already exists. Here, we can take the example of TATA, which designed the cheapest and smallest car Nano to disrupt the car segment and gain 17% market share.

In my opinion, you shouldn’t be afraid of either innovating or reinventing the wheel as long as it could help your product to become a game changer. The only thing you should ensure is to keep your product simple and useful.

Do you have a sales strategy in place?

So, now you have ensured that there is a market for your product and you have a product ready to hit the shelves. Here comes the tough part – selling it. You need to have a well-thought sales strategy in place. This involves:

  • Setting deliverables (how much you want to sell in what time frame, market price, profit margins)
  • Identifying the sales territories (where you want to sell)
  • Creating marketing collateral (mailers, white papers, brochures, blogs, PowerPoint presentations, etc.)
  • Finding methods to sell (direct, retail, online, word of mouth)
  • Training the sales team (product features, sales pitch, sales targets, customer relationship)

A robust sales strategy will be your road map to positioning your product correctly and gain a competitive advantage.

 Do you have the right sales team?

A sales strategy alone wouldn’t suffice. You need talent that can sell your product with the same passion as you i.e a killer sales team that doesn’t let you and your product down.

Ideally, there is no better salesman than the entrepreneur himself. So, think about how you would sell your product if you were the salesman. Or, if you were the customer, what you would want to hear or experience during the sale. Once you learn to sell the product to yourself, you would know the right kind of people to hire. When building a sales team, ensure that:

  • You don’t sacrifice quality and fit for a quick on-boarding process.
  • Salespersons understand that selling is a pre-cursor to relationship building with customers.
  • They want to climb up the ladder, are patient with customers and are open to constructive feedback or criticism from customers.

How flexible is your product?

The customers may love or hate your product. Even if they love it, they may still give inputs on what else could make your product better. If they hate it, perhaps you haven’t done your homework well and need to iterate or redesign your product. Ideally, try to push your first iteration in the market to study what works and what doesn’t. Either way, your product should be flexible enough to change or evolve to meet customers’ expectations. Be open to customer feedback and adjust your product accordingly.

Product startups have their own share of challenges. But, with a right set of mind and determination to do the things the right way, it shouldn’t be difficult to overcome these challenges.

This article was originally published in Inc42.