iSPIRT works to transform India into a hub for new generation software products, by addressing crucial government policy, creating market catalysts and grow the maturity of product entrepreneurs. Welcome to the Official Insights!
The emergence of high speed Internet services and the ability to outsource the networking and processing requirements has generated a plethora of opportunities for various companies to avail these emerging services and reduce their overheads and speed up product delivery. There are however, various critical termination and post termination issues that are encountered by IT companies who are operating on a Software as a Service (SaaS) and Platform as a Service (PaaS) business model.
A typical SaaS Agreement is akin to a “property lease agreement” whereby the user would pay rent for the property as long as it is used and on termination of such a lease, the user would cease from using the said property.
However, unlike property, the services rendered by a SaaS operator would need not only require protection in-terms of asserting its rights over the underlying software program, but also for ensuring that only the right to use are assigned to the end user for the limited period.
From the end user perspective, the SaaS model of business operations raise a whole new gamut of issues given the nascency of this Industry. A common concern that is being raised by them is “what would happen if the service contract were to be terminated by the service provider”.
While many a client/end user would brave the odds and accept the risks associated with the industry, it is critical to address the concerns discussed herein. In a standard SaaS agreement, it should be viable for having an amicable exit option so as the interests of the end users are protected especially with respect to migrating to a new platform so as to ensure business continuity and guarantee data security post termination. If the agreement secures these rights of the end users in case of a termination, the agreement will be deemed to be not too restrictive so as to attract anti competition regulations, if any. The end user in which case can easily migrate to another platform or use services of a different service provider in an effective manner.
Takeaways
A SaaS or PaaS business model is susceptible to Anti-Competitive regulations especially if the arrangement is in exercise of a dominant market position. It would also be a concern for the client to have an exit option and not be wholly dependent on a single SaaS provider. Following are some of the tools to be used in negotiating a contract in these scenarios:
Use a Post Termination clause to assist the client in identifying alternatives
Assert IPRs in the underlying software
Non-disclosure and Non-compete agreements may be entered into between the parties
Post termination cleanse of all traces of the software
Build in adequate clauses for protection on data and codes during migration to the new provider
Product Nation interviewed Dinesh Gupta and Rajesh Gupta, promoters of Busy Infotech Private Limited, a leading provider of business accounting software for micro, small and medium businesses. In this interview, they describe their transition from being a services vendor to a pure play product vendor and their experiences of more than 2 decades of selling to Indian and global customers. Read on…
You are one of the very early players in the software industry in India. Tell us about your initial years of this business – how did you start with and when you resolved to focus on the software products business.
Dinesh Gupta, Busy Infotech
We started the software related business in 1991. After getting my engineering degree in 1987, I spent three years of time working as an R&D Engineer at a PC manufacturing company. Being in R&D environment, I understood very early that computers and software could be used to provide huge benefits to customers in their operations. With the value proposition being clear in my mind, and the adoption of computers and software in its very early stages in India, I started Digitronics in 1990, primarily focusing on computer sales and maintenance and custom software development.
Rajesh Gupta, Busy Infotech
My brother Rajesh joined the company in 1991 and focused on strengthening the custom software development efforts, primarily serving the SMEs. In about two years, we had a very good grasp of the SME problems and had developed packages to help them with inventory management, accounting, invoicing among others. During 1992, it became abundantly clear to us that the maximum demand from SMEs was for accounting automation. Tally was the only product that was available in the market at that time. We sensed that if we could offer superior solution than our competitor, we had a huge market to capture. This led to creation of the first version of our product in September 1993.
Selling a software product during those days should have been tough. What strategies did you adopt to gain customers in those initial years?
In the initial years, when someone made a computer purchase, Tally was being shipped along-with the operating system. It was available to the end users, virtually at no cost. So, our challenge was to not only challenge the incumbent, but also to ensure profitability and revenue realization. In the initial years, we focused on providing key differentiators in terms of features and focused on filling gaps in terms of capabilities which were not present in Tally – such as Sales Tax Reports. Due to these differentiators, we were able to rapidly get acceptance from the tax consultant community, a key influencer to the end customers who purchased our computers and software. We did not resort to any external sales or marketing spends during those times.
Only after we had more than 100 satisfied customers, we ventured out to exhibitions which would get us more prospective customers at one place. Our participation in IT Asia 94, a key IT Exhibition, held in December 94 at Pragati Maidan, Delhi helped us scale our sales significantly. We got very good mindshare and footfalls during that conference, and we could reach out to most of North India on account of this exhibition. Our business virtually doubled on account of participation in this event.
Can you elaborate on how the product evolved over these years?
Sure. Although we started by offering our product quite low-priced, we kept on aggressively investing on product development, making sure of leveraging the best out of existing technology from time to time. Our initial versions, till 2000 was DOS based, primarily due to the prevalent Operating Systems at that time. In 2000, we had a Windows based version of the product and we standardized our offerings under three categories, which helped us to charge our customers a bit more than earlier. In 2004, we introduced the Remote Access option which helped customers to access their accounting package from any location. At this time, we also re-architected our product to be working on either of Client Server or File Server mode.
In 2005, when Value Added Tax (VAT) was introduced in Delhi, we were the first one to come out with a VAT-Compliant version. This nimbleness in design of a scalable architecture helped us in increased new sales, as well as conversions from competitors. From then on, we have carefully guarded our position as the leading provider of statutory compliance features for accounting software in India.
In 2013, we made another big change in our product development strategy – to ensure that our customers can access the product capabilities anytime, anywhere and on any device. We provided a whole new set of features and capabilities to our products such as Triggers & Alerts via SMS or Email, browser-based access to data which enabled customers to use our software on tablets or smartphones as well.
Even though you now have over a lakh installations, I notice that you have a limited channel partner network. What has been the reason? Can you tell us your views on working with channel partners?
Our Sales have been primarily driven by references in India and in other geographies. This has helped us tremendously reduce our costs related to sales and marketing. From the inception, we have consistently focused on customer satisfaction, which has in turn got us leads. However, over the years, as we have scaled our business, we have started to work with channel partners as well. Our philosophy of engaging with any channel partner is by assessing if the partner gets any value by virtue of selling our product. If not, we do not proceed any further.
We are also very serious in our commitments to channel partners who choose to work with us. We look at them as our extended team. We provide the same support, training and nurturing as we do for any of our employees. We also complement the capabilities of our partners by understanding their aspirations, mode of working – and then suitably play a role of supplementing them based on their needs. Some business partners are very tech savvy and aggressive on sales, while others are slow and steady. We take along every one of them – and ensure that their goals are met. This approach has helped us build trust and long term commitments from our channel partners.
I see that your product now sells in multiple geographies. What are some of the best practices that you think that helped in selling to customers outside India?
We started looking at global markets only when we were convinced that we had a proven product that is well accepted in our local customer segment. When we considered selling to overseas market, we quickly realized that the features of our product augured well for selling in emerging economies. Since regulatory and compliance issues change from country to country, we had to ensure that we choose the markets appropriately such that the product features should be at least close to what is required in the target market. We therefore chose emerging economies that were English speaking only during our first iteration of internationalization. This has helped us grow in markets such as South Asia, Middle East and Africa.
Given the segment you are in, do you see piracy as an issue? What are your thoughts on the same? Have you taken any measures to address it?
Piracy is an issue with us as well. Given that we are in a volume driven business and catering to customer segment that is increasingly value focused, we have to deal with this issue very carefully. Frankly speaking, the more we get to know about pirated copies of our product – we feel that our value proposition is being vindicated. It means that customers desperately want to use our product. However, we have not done anything to address this issue, since as of now, the market is huge, and our customer segment is sensitive to any negative signals of harsh enforcement. We also believe that due to the increasing complexity of accounting and the needs for regulatory compliance across the world, our future customers will find it increasingly beneficial to work with a valid licensed version of our product, since accounting is a crucial business activity that they cannot do away with.
Great insights! In closing, what are the three key inputs that you would like to provide to fellow entrepreneurs who are targeting Indian customers?
I would recommend all product entrepreneurs who wish to address problems of Indian customers to develop a deep understanding of the needs and pain points of their target segment. This will certainly provide benefits in the long term. Secondly, for Indian markets, you need to provide a product which is value for the money spent, and simple to use. Even now, if one is targeting the SME sector in India, one needs to understand that there is not much of IT expertise that an SME can afford – so your offering should be usable by even a semi-skilled person to be of any value to your customer.
Revolution is not an easy word to throw around. Those cheering for a software products revolution in India must look at the historical context.
Innovation Factory
So many countries and communities have tried to emulate the amazing startup culture that exists in the United States, specifically in the Silicon Valley. The Valley is not only a fountainhead of creation and innovation in computer technology but also of commercial execution and expansion. For those who have some interest in this phenomenon, the reasons are obvious. Few weeks ago, I came across the wonderful book about the Bell Labs, “Innovation Factory” and it gave this phenomenon yet another perspective.
The book traces the history of how a powerful team came together to solve a big problem for humanity and also monopolistic wealth creation. The Bell Labs, in the decades before and after the second world war, was pretty much where everything that is the basis of modern communication and computer technology was invented. From the transistor to satellite communication, from fiber optics to UNIX, the Bell Labs became a factory of sorts for innovation. The labs were manned and managed by some of the finest brains of the time, sourced from the best American universities. Together, they had an opportunity and to solve a great problem for humanity, how to bring people who lived far apart, closer. And in return they ran a near monopoly in telecommunications in the United States, protected by dubious patent laws.
This team in the Bell Labs was the precursor to the next revolution, the one that came a few decades later, when the action shifted to the West Coast and Stanford University, when William Shockley, the co-inventor of the transistor moved to the West Coast to setup his semiconductor venture. Almost all of the semi-conductor companies found in the silicon valley at that time were started by employees who left the Shockley venture. Soon semicondutors became cheap and the startup culture spread fast. This second revolution, was driven by teenage hobbyists who later founded billionaire empires. To help these hobbyists build empires, the mandarins of finance, the venture capitalists, were already there, bringing in their networks and money.
The Indian Context
When we compare this culture to the Indian culture of innovation and wealth creation, we find stark differences. Our telecom revolution, when it finally came, has become synonymous with crony capitalism and corruption. Instead of creating new technologies, we have created new business models, where our telecom tycoons have outsourced the technology and we are completely dependent on our neighbours for handsets, weakening our foreign trade balance and dependency on outside technology.
Our famed IITs are another dismal example how things can go completely wrong. Even as we praise the IITs for producing some of our brightest minds, we should also remember that they have failed miserably compared to their counterparts in other parts of the world to produce any volume of innovation.
Even as we are saddled with “third world” problems, our governance is stuck in the 19th century. The Bell Labs had access to a unified market which helped them scale quickly. Our big problems of housing, sanitation and healthcare are all fraught with legal and regulatory red-tape. The only recent example of wealth creation is that of the IT Service industry which was again, less of an organic phenomenon and more a beneficiary of globalisation and reducing cost of communications.
So when we talk of starting a software products revolution in India, we are in effect talking of replicating the American culture of high paced innovation and commercialization in India. But what we forget is that we lack any historical or cultural context to bring in this revolution. Just because we have a whole lot of software engineers, there is nothing to suggest that they will start innovating suddenly and recreate the decades of learning that is subtly passed on through culture and smalltalk.
E-Commerce Nation
This places where technology built by Indians has touched common people are in e-commerce, travel and classifieds. Here we have home-grown companies that have created technology solutions and enabled people to see the benefit of transacting online. Even though these are still not pure technology companies, a number of Indian software products are founded by employees of these early e-commerce companies.
But what is badly needed is a “breakout” success, but there is no guarantee how soon that can happen. We can only hope that one of these companies becomes very large and creates a “mothership” like Bell Labs that then becomes the fountainhead of a revolution.
The other thing to note is that these revolutions were brought about by a significant shift in technology that opened new avenues for communication and commerce and these opportunities were successfully monetized by companies that were closest to these innovations. Hence to bring in such a revolution, we must build engines that invent those paradigm shifting technologies.
The real problem in Indian product companies is not lead generation or sales, but building innovative technology. On top of it, most Indian software products lack good quality and are not designed to be inspiring, though this is slowly changing. The problem in this model is that we are now competing with the best in the world and time is running out. My guess is that the Indian company that breaks this mould of mediocre technology, quality and design will most likely be the Indian mothership.
The success of India in future is intrinsically linked to its ability to keep pace with technology. The world has seen an unprecedented change in technology landscape in the last decade and innovation has become more important than ever before. Technology can help build a digital India- a knowledge-based society and economy- by empowering, connecting and binding all parts of India.
For India to become a global knowledge hub by 2022- the Diamond Jubilee of our Independence- Innovation, Research and Technology will have to play a major role of being the driver, engine of growth and shining light of Brand India. Innovation and Technology will have to be the enabler for empowerment, equity and efficiency by joining people with governments, bringing them closer to knowledge and bridging the gap between demand and supply. Despite India having become the software services capital of the world, the benefits of Technology have not percolated down. The lack of a proactive political vision in not appreciating the full potential of technology in the last decade is primarily responsible for restricting the spread of Information Technology domestically.
Next Phase of Innovation and Technology Revolution in India
India has a long history of Cultural Innovation driven by necessities. It’s time that we take our Innovations globally and solve societal problems. It is in this context that India must embark upon next phase of Innovation and Technology revolution with renewed vigour. It would be unwise to be satisfied with successes in instalments and not tap the vast potential of Indian Talent. The success and Brand established by the Indian Software Services Industry needs to be leveraged with next wave of “Made In India” Technology, Products and Innovations.
That the BJP has seized upon this opportunity and responded to the aspirations of the country is evident in its Manifesto 2014 that has laid unprecedented emphasis on Innovation and Technology and its cross sector potential.
E-Governance
E-Governance is easy, efficient and empowered Governance and has to become the backbone of Good Governance paradigm. A Digital India -where every household and every individual is digitally empowered – is key to the concept of new age, efficient & incorruptible governance.
This can be made possible by increasing the internet penetration and usage of broadband across the country. Deployment of broadband in every village would be a thrust area. Every district of the vastly diverse India having its own specialities must be digitally integrated by 2022.
Follow the Fiber Policy is another path-breaking proposal that can refurbish the digital outlook of the country. Smart Cities will be developed around Digital Highways. The example of the ‘E-Gram, Vishwa Gram’ scheme in Gujarat, that ensured significant empowerment of the rural population by bridging the Digital Divide between the rural and urban areas by providing e-services to all its villages, is worth emulating across the country. The scheme helped control corruption significantly since all transactions between government and citizens are computerised.
Innovation
Spurring innovation and research in India is essential in order to reduce dependence on foreign technology. Innovation is an evolving process and there cannot be a stationary blueprint for it. However, the basic pre-requisite for driving innovation is to have 1.2 billion Indians digitally connected through our own technologies and networks.
The BJP Manifesto talks about such path breaking innovations in governance as promotion of e-Bhasha (National Mission for the promotion of IT in Indian Languages), Content digitization of all archives and museums, financial inclusion and participative governance.
The idea of participative governance using social media as an enabler merits a special mention. Today,Social media has the potential to transform all interactions in the public mindscape. They are powerful catalysts that are changing the ways people use technology to interact with the world around them. India must include these interfaces in its governance models and take full advantage of it. Youth, the biggest driver and user of social media, ought to be involved in policy formulation & legislation.
In a country where nearly 70% of the population lives in villages, a significant segment of about 6,50,000 villages do not have a single bank branch, access to quality healthcare, and higher education, BJP has done well to recognise these handicaps and addressed them in its manifesto with the ideas such as National Rural Internet and Technology Mission for use in TeleMedicine, Mobile Healthcare, Massive Open Online Courses and setting up a National e-Library.
As a matter of fact; policy, institutions and market factors will determine the fate of India in coming years. The existing market factors are quite favourable but it now needs a set of ‘good policies’ & ‘good institutions’ under a visionary leadership for building an India of our dreams.
There is an inescapable clamour by the young and capable nation for a proactive and innovative policy framework that goes beyond being stuck in a reactionary mode. The nation is looking up to the new political dispensation that is likely to assume office after the general elections for providing such a visionary roadmap.
Focus on understanding the situation that the customer wants to resolve, not the customer
Product managers are constantly told that they must “know” or understand what customers really “want” or “need”. Did they tell you how? Did they say — understand what problems customers are trying to overcome? Should you focus on understanding the problem, the customer or both?
You will be better served if they told you to truly understand what jobs customers are trying to get done.
A “job” is a fundamental problem a customer needs to resolve in a given situation.
Focus on understanding the situation not the customer. Customers find themselves in a situation, with constraints and emotions. This situation forces a customer to take a decision to hire a product to get a job done. This helps a product manager understand what causes a customer to hire a product and why. Understand their constraints while they are in that situation (like time, capability to handle complexity) and the emotions they feel as they encounter a situation (like fear, anxiety, anger, frustration). Understanding the constraints helps in shaping the solution, understanding the emotions helps in pitching the product.
Customers rarely hire a product as soon as they find themselves in a specific situation. Repeated exposure to a specific situation causes the customer to take various steps to resolve the situation. Only if the steps taken fail to resolve the situation to their satisfaction, do they decide to hire a product (or seek a new solution). Understand the various steps taken and how their situation has changed over time. What outcomes were they dissatisfied with? This helps a product manager to understand key attributes or dimensions that are important to the customer. Each attribute or dimension is a potential differentiator. Understanding these attributes helps in differentiating and positioning the product. Which dimensions are important to the customer, but poorly served by other alternatives and competition? Understanding expected outcomes helps in creating delightful experiences. How can we provide outcomes that exceed the user’s expectation?
As the situation changes, the customer experiences various “pull” and “push” forces before they hire a new product. The pull forces are various hurdles that they have to overcome — an existing habit, will the solution work for my situation, will the change make things worse? The push forces are things that lead the customer to make a decision — the current solution sucks, that product seems interesting. Understanding these forces helps in designing systems around the product. A great product takes a systems approach to resolving a situation, the “product” is just one part of it.
What are the other benefits of this approach or methodology?
Helps you focus on alternatives available to get the same job done, hence pricing risk (under pricing or over pricing) is lower. You may realize that folks, who occasionally want to work on a document across devices, may hire email to do the job for them, not your file sharing application. Customers do not think in terms of product categories while seeking a solution. You may realize that a customer uses multiple products to get a single job done
Helps you understand the key trigger points in the decision making process (or key triggers in making the “switch” from an existing solution to your solution). You may discover that folks who use email for sharing documents across devices, begin to seek out a better solution on forgetting to email the document after working on it. It helps you understand what actions a customer takes as the situation changes, like research which product to hire, seek feedback on a particular product, or actually decide on which product to hire.
Helps you keep the product simple, road map is more aligned with what customers want. You can stop adding features because the competition does. Why move to a higher pixel resolution if customers are not printing photos taken on your cameras? Trade-offs decisions are easier. You may also discover other product categories you could compete in.
Helps you market the product better. Take a look at the Amazon Dash video. Notice the number of “personas” in the video?
Summary: Using “jobs” as the unit of analysis for all product decisions will lead to building of better products and delighted customers.
If you are interested in the methodology, you can go over the excellent research and content developed by Clayton Christensen (milkshake video) and the Re-Wired Group. The Re-Wired group has a course on Udemy on Mastering Jobs-to-be-Done Interviews to help understand the real reasons why customers buy a product.
ProductNation interviewed Kishore Mandyam, Founder and CEO of PK4 Technologies, the company that owns the Impel CRM offerings. During this interview, Kishore shares some of his experiences in creating a product suited for Indian customers, and discusses his learning from dealing with customers and technological developments. Read on…
What was the motivation to start Impel?
There were a couple of factors that came together in influencing creation of Impel. During 2006-07 timeline, after having successful career and managing different aspects of business around the world, I was looking at what could be the next big challenge to take on. Frequent travels to different parts of the globe also had started to become taxing. The domestic market was showing encouraging signs of robust demand for product based solutions. All these factors influenced in we taking the decision to set up Impel, a product company based out of India.
What were your experiences during the initial years of operation and what was the learning?
As we setup Impel, we converged on the CRM area as our focus to provide solutions, since we understood that many customers in the target segment that we were aiming were not very organized in dealing with Sales leads and customer centric operations. We invested our initial 18 months to build the product and made it available for customers by 2009. Given our previous corporate experience, we initially started leveraging the state of the art marketing and selling techniques and were able to land about 120 customers during the first year of operations.
However, the biggest learning came next year, when we could not retain most of these customers. When we analyzed what went wrong, we discovered that our method of signing in customers using web based sales ensured that customers bought the product – but just purchasing the product did not mean that they would use it. It turned out that most customers had not tried the various features and capabilities of our product offering and hence were skeptical to renew the relationship with us for the next year.
As an organization, how did you respond to this learning and what new measures did you take to overcome these limitations?
We all gathered back at the drawing board, analyzed the developments and worked on how we could enhance our offering to ensure more usage and hence more engagement from the customers. We further segmented our target customer base, identified the key sub-segments that showed more promise and started working closely with leads from that bucket. During 2011 and 2012 we got very good traction from lifestyle businesses and rural businesses that focused on selling and marketing seeds, solar lamps, pesticides, FMCG and so on. The targeted and focused engagement with this sub-segment yielded very good results for us, and by 2013, we had about 120 to 130 stable customers.
During the same year, based on our experiences thus far, we shifted our focus to engage with mid size companies and fast growing small companies. This shift in focus helped us to increase our profitability and ensured diversification into another segment of customers.
What are your observations on the Indian market based on your dealing with them over these years?
The Indian small and medium companies have many challenges for which they desire solutions. However, they currently are unable to articulate their problems and explain the desired solutions to the vendors who approach them. On the other end, if any vendor is able to identify these gaps in their operations, clearly articulate the pain points and propose a technology based solution that adds value / solves their pain points, the customers will lap it up.
In our own case, we started off with a CRM offering – we wanted to be the Salesforce for India. However, as we listened to our customers, we discovered that they were buying our software to solve a variety of problems around the CRM domain of which we had no initial knowledge of. This interaction made us tweak our offerings based on their feedback.
Secondly, the perception of Indian customers about cloud has drastically changed since the past 5 years. Customers now accept cloud as an alternative and secure medium of deployment. They realize that it provides them certain benefits than the traditional modes of deployment. This development, combined with the rapid acceptance of mobile and smart phones in the Indian ecosystem is creating a market of significant size that are willing to look at mobile and cloud based solutions to solve their challenges.
What are some of the areas which you wish you could have executed better on?
Being a bootstrapped startup, one needs to always prioritize on the areas that need the focus and attention to attain growth. Having said that, as I reflect back, there are a few things that I think we could have executed better. One of them is about the trial process we have to let our prospective customers try out our offerings. We notice that despite our best efforts, we were not able to better engage our prospects in ensuring their conversion.
While the above one was on pre-sales, I also think we needed to do one thing better – on providing better documentation of our product, on the post-sales and support side. I notice that a few startups in India have been very good in this regard – and they have good customer retention and lesser support costs on account of this. I think that if we can simplify the usage of the product to the end user, and support the end user with description of how to use different features of the product; this combination will help in long term sustainability for our company.
Interesting insights! In closing, what are the three things that you would like to share with your fellow entrepreneurs who are targeting the Indian market?
I think we are at very interesting times as regards to targeting the Indian customers with our technology solutions. The first thing I want to let other entrepreneurs know is that the average Indian manager is much more willing to engage and evaluate your technology offerings. This is a very encouraging sign for all entrepreneurs. Secondly, mobility as a technology development is a big disruptive force, especially in the emerging markets. Hence, plan to leverage the power of mobility in all your solutions and that will surely delight your customers. Lastly, Indian customers take really long cycles to decide to buy. Continuously engage with them through marketing and other touch points, even when you may have ruled out immediate purchase in this quarter. If the customer is engaged, he will simply come back to you when he decides to buy and will close the deal in a day!
In our candid conversation with Jose and Jacob founders of Weavedln Technologies Pvt. Ltd., we have discovered a team of four entrepreneurs on their way to transform retail industry with their product – Weaver. They intend to redesign the way retail outlets work, by converting ‘point of sale’ with a smart cloud based device.
The Team: The founding team consists of JoseKuttan , Jacob, Dheepan and Jibin. Jose has done his MS in Telecommunications and Venture Practicum from University of Maryland, Washington. Thereafter he decided to come back to India to pursue his startup dream. He has worked in bunch of Bay Area Companies along with couple of startups and a VC firm as an associate while in the US. Jacob was in the founding team of the first Incubator in Kerala (southern state of India) by name Innovation Lab. He is a graduate from Govt. Model Engineering College, Cochin and has worked with EMC Corporation prior to WeavedIn.
Dheepan leads technology and backend at WeavedIn. He is a graduate from College of Engineering, Guindy in Tamil Nadu and has experience working with Apigee, Hashcube and other startups. While Jibin leads the mobile side of technology. A hard core techie brings experience working with companies like Infineon particularly in the embedded technology.
The Product: Put together their brains they have introduced ‘Weaver’, a new species of product in the retail segment that takes care of virtually everything about a retail store. It has three facet benefit system that solves pressing problems in sales, inventory management and customer experience of retail businesses. Weaver works on native android on the front end and has a powerful web based backend. The technology stack which powers our backend is LEMP (Linux, (E) Nginx, Mysql, Python). The product has a 2048 bit SSL encryption to protect customer’s data transfers.
Weaver handles store’s key sales problems via cloud based POS system along with its automated inventory management. It helps retail businesses to enhance their store management and in-store customer engagement experience. Their analytically driven dashboard ensures store owners/managers are updated with every single aspect of the store on real time basis on their move. It has in-built facility to generate bills for your sales either on paper or the smarter way through an email or a SMS. It helps in managing accounts, vouchers and other important sheets along with monthly tax data and Profit & Loss statements.
Weaver creates purchase orders, share them with vendors via SMS/Email, updates inventory once the items arrives, links them as components (or whole) to sales catalogue. All this components mapped to keep a watch on inventory status and get automatic alerts if inventory falls below a threshold.
In regards to customer engagement, Weaver helps store managers to stay connected with customers by capturing their details to be able to give them personalized experience. Weaver ensures data is always protected and derives maximum value out of it.
The USPs: Weaver has:
Cloud based touch device that integrates multiple activities of a store to a single interface in its hardware plus software package.
High level of automation in terms of inventory management that helps the store owners save money
Simple user interface design that minimizes the learning curve for employees and promises higher level of customer engagement
Scalable model in an affordable package, that gives absolute value of money with pay as you grow model
In this niche segment some of the players like Posiflex, Wincor Nixdorf, IBM catering to the upper segment of the pyramid and are present on an international level. While other players in the international market are Revel Systems, Square Register and Shoppify POS. Indian domestic market has players like Gofrugal, shawman, Lucid, Posist. Posist is a cloud based system that works from a browser and is a near competition in terms of the features.
In the next 12 months Weavedln is focused on sales networks and developing partnerships to enhance the product feature set. Weaver is designed to plug in the brick and mortar stores to the cloud. Productnation team would wish Weavedln team luck in their plans to build a set of features that would leverage the same and would add value to the stores.
We are a few days away from InTech50 – a very warm welcome to CIOs and technology leaders from all parts the world to Bangalore. These leaders are responsible for bringing about Innovation in their corporate environments and are congregating in Bangalore to see the 50 best Enterprise Indian startups – the InTech50 list!
This gathering is a huge step for the Indian product ecosystem because it brings, for the first time, CIOs and technology leaders to India to see the early stages of broad spread software product innovation. The smartest CIOs already leverage product startups to infuse innovation in their business. I congratulate the top 40 companies who are picked already and look forward to the announcement of the remaining 10.
These have been carefully selected by the Advisory Board from the 200+ Indian Enterprise product companies that applied. Below is a list of luminaries who are going to be present for the occasion. Let’s all welcome them to InTech50:
➢ PATRICK FUNCK SVP, CIO Accretive Health Company Vertical: Hospital & Health Care Company Size: 1001-5000 employees
➢ DAWN PAGE, Managing Director, Citibank Company Vertical: Financial Services Company Size: 10,001+
➢ JAY JAYARAMAN, Vice President, Global Strategic Innovation &Technology Alliances Colgate-Palmolive Company Company Vertical: Consumer Goods Company Size: 10,001+
➢ CHANDRA VENKATARAMANI, Chief Information Officer, Convergys Corporation Company Vertical: Outsourcing/Offshoring. Company Size: 10,001+ Employees.
➢ JACK PRESSMAN, Executive Managing Director, Cyber Innovation Labs, LLC (“CIL”) Company Vertical: Information Technology and Services. Company Size: 51-200 employees.
➢ CHRISTOPHER T. HJELM, Senior Vice President & Chief Information Offier, The Kroger Co. Company Vertical: Retail. Company Size: 10,001+
➢ ANUP NAIR, Senior Vice President and CIO Vantiv Company Vertical: Financial Services. Company Size: 1001-5000 ➢ Damon Frost Director at P&G Company Vertical: Consumer Goods. Company Size: 10001+
➢ KSHITIJ MULAY, India IT Leader (GBS) Procter & Gamble Company Vertical: Consumer Goods. Company Size: 10001+ employees
➢ TARUN SAREEN, Head, EMC IT – APJ COE and APJ Theater Lead EMC Corporation Company Vertical: Information Technology and Services Company Size: 10001+ employees
➢ PARTHA SRINIVASA, SVP and Group CIO, HCC Company Vertical: Insurance. Company Size: 1001-5000 employees ➢ Piyush Singh Sr. VP and Chief Information Officer Location: Cincinnati Area Company Vertical: Insurance. Company Size: 1001-5000 employees
➢ GREG TOEBBE, Sr. Vice President Great American Insurance Company Vertical: Insurance. Company Size: 1001-5000 employees
➢ KETAN MEHTA, CEO of MajescoMastek Co-founder and Board member of Mastek Company Vertical: Information Technology and Services. Company Size: 1001-5000 employees
➢ STEFAN VAN OVERTVELDT, CTO of MajescoMastek Location: Mumbai Area, India Company Vertical: Information Technology and Services. Company Size: 1001-5000 employees
➢ GEOFF SMITH, IT Strategy/Leadership CIO Roundtable Company Vertical: Management Consulting
➢ MAHENDRA VORA, Deals and Partnerships Vora Ventures LLC Company Vertical: Management Consulting
➢ ROB HEIMANN, Director River Cities Capital Funds Company Vertical: Venture Capital & Private Equity Company Size: 11-50 employees
➢ RAVI KOKA, Head of Insurance Products Polaris Software Labs Inc. Company Vertical: Management Consulting Company Size: 51-200 employees
➢ PHANENDRA BABU GARIMELLA, VP of Engineering, Aurea Software Company Vertical: Computer Software Company Size: 201-500 employees
➢ KARTHIK SUNDARAM, President & CEO, Purplepatch Services LLC Company Vertical: Marketing and Advertising Company Size: 11-50 employees
➢ MARK A. BUNCH, AVP and Enterprise Architect, Great American Insurance Group Company Vertical: Insurance. Company Size: 1001-5000 employees
We will soon be sharing another list of Innovators who will be participating at InTech50
The elected products that represent inspirational and pioneering concepts in software will be showcased at InTech50 , a two-day event to be held at Bangalore from April 9 -10, 2014, where global CIOs and transformation leaders will be present.
How we picked out the Top 10 showcase products:
It is quite an honor to be in the InTech50 considering there was an overwhelming response for product nominations.
An esteemed panel of Chief Information Officers (CIOs), venture capitalists, and product leaders from previous successes have evaluated the nominated products.
The products have been selected based on their capabilities and uniqueness, while having the potential to transform the world around us.
The Second 10 finalists for InTech50 2014 Most Innovative Products (in alphabetical order) are:
Contify is a Web Intelligence application for enterprise and teams. The product mines virtually all relevant online sources for information and converts it into easily accessible qualitative and quantitative insights on customers, competitors, and markets.
i7 Networks is a 100% Agentless-way (ZERO-Touch) of detecting all personal devices, secure quadrupled fingerprinting (US patent-pending) of devices and apps etc. and provides network behavioural analysis. It then denies access to infected and compromised personal devices connecting to the network.
KiSSFLOW is business process automation software that is deeply integrated with Google Apps environment. KiSSFLOW is the #1 app in the Google Marketplace in its category and has more than 5000 organizations and active users spread across 120 countries.
Kreeois a “Collective Intelligence & Unification Platform” for Companies which addresses three important aspects of effective information/knowledge management – Expression, Organization and Discovery (EOD). It provides a unified platform where information is shared/aggregated in various contexts and is intelligently organized around various concepts of relevance.
MindTickle is a cloud based learning platform which enables businesses to create, deliver, manage and track online courses. It is easy to create courses on MindTickle by uploading or embedding existing content (videos, PPTs, PDFs, quizzes, etc.).
RazorFlowDashboard Framework helps you build interactive dashboards in HTML5 that work well on all modern devices. You can configure components of the dashboard using an intuitive API, which will intelligently render the dashboard according to the capabilities and form-factor of your user’s device.
RippleHire is a technology product that gamifies employee referrals and enables social recruiting. By empowering the most effective way you hire (Employee Referrals), it reduces your hiring cost and effort and unlocks the multiplier in your employee social networks.
Sapience is an innovative, patent-pending software solution that delivers over 20% increase in Work Output, from the existing team. Sapience achieves this through Automated Work Visibility, without requiring any change in process or extra management effort.
SignEasy is a simple and convenient app for businesses and professionals to sign and fill documents from smart phones and tablets. You do not need a printer, scanner or fax machine. SignEasy is currently available on iOS, Android and BlackBerry.
Seclore FileSecure is an Information Rights Management (IRM) solution which allows unstructured information (documents, emails, drawings, images,) to be remote controlled. It is possible to share information but have control: WHO can access the information, WHAT can each person do and WHEN does each person use the information.
Those who know me well have heard a lot of stories about my experience at Zoho when they transitioned from AdventNet to Zoho. I worked there between 2001-2004 when it was quite a new thing in the indian product ecosystem to talk of Product Management etc. During that period, the company went through a very significant phase of transformation which I was fortunate to be part of, see & learn from close quarters. Today, Zoho was named 4th best Cloud company to work for – makes many of us very proud.
The first thing that struck me was Sridhar’s focus on leveraging data. It went to a point where we realised that inefficient code can put paid to aspirations of leveraging data. And he rethought the data model for our suite of products ground up. The larger ambition was “Deliver software as service, not as installable“. This was in 2003! Back then, the company had about 5 big platform products (SNMP, WebNMS etc). Rethinking the data model, writing and enforcing code that didn’t obfuscate the database (most code was in Java, so it was easy enough to write inefficient code) were tough but important changes he brought about.
Sridhar cared a lot about how teams were organized – large teams are an inherently inefficient lot! Sridhar had the view that teams should be less than 7 people, cross-functional. The reward for growing a team beyond 7 was that it will be split :). His view was that since “Software will be delivered as a Service”, the company should transform from 5 big ships to a 1000 speed boats. To do that, each team team had to focus on a specific market, build and ship a unique product. By 2004 when I was leaving for Yahoo!, there were already 18 products underway. Before the end of the last decade, they were doing over a 100 products!! To go from 5 to 100 in just a few years is quite something.
There’s a lot to lay by the founding DNA of a company and what it can accomplish. While building Credibase which I’ve cofounded a few months ago, here are a few lessons I took away that we try to practice:
Data is God
Focus on the User and all else follows
Small teams create great work
Code always goes from Simple to Spaghetti, but never comes back
The Rickshaw Rising Challenge finale took place in the first week of February 2014 in Mumbai. Fourteen entrepreneurs representing 8 teams went through a two day long boot-camp. Read more about Day-1 and Day-2.
On Day 3, they pitched their business to Robin Chase (ZipCar), Harish Hande (SELCO), Judith Pollock (Shell Foundation), and Madhav Pai (EMBARQ India).
We are truly excited to announce the results of the Rickshaw Rising Challenge.
Ubida
The first award of $50,000 and 6-months business support went to Mukesh Jha and Janardan Prasad of Ubida from Pune. The company addresses auto rickshaw hailing problems on the consumer side and optimizes rides and income for drivers.
AutoRaja
The second award of $25,000 and 6-months business support went to Aishwarya Raman and Anubhav Agarwal of AutoRaja from Chennai. AutoRaja runs auto-rickshaws on call with the aim of creating dignified lives for drivers by increasing business and facilitating access to finance, healthcare, and education.
Three Wheels United
The third award of $25,000 and 6-months business support went to Ramesh Prabhu of Three Wheels United from Bangalore. TWU addresses problems in the auto-rickshaw ecosystem through financial services, alternate channels of revenue, and bringing in a shift to cleaner engines.
We would also like to congratulate our 5 other finalists and 38 other applicants to the Challenge.
We look forward to finding other channels to support and work with you.
They (you’ll never know who these wise people are) say, well begun is half done. If you ask anyone connected with iSPIRT, I’m sure all of them will agree that we’ve definitely begun well, but definitely not on the ‘half done’ part!
That definitely doesn’t take anything away from the impact iSPIRT has had in the short period that it has been in existence. From organizing India’s first bootcamp #PNCamp, conducting over 23 PlayBook Roundtables across segments like Sales, Marketing, Product Management, driving a focused initiative on driving M&A opportunities for Indian startups to even driving a policy intiative to work with the government and its organization, iSPIRT has indeed created a strong impact in the Indian Product Startup ecosystem with over 300 companies impacted and over 220 product entrepreneurs touched.
And the reason those involved with iSPIRT – Founders, Fellows, Mavens & Saarthis won’t agree with the ‘half done’ part is because they believe there’s a lot more to be done in the coming years.
On the other hand, it is quite hard to imagaine that so much has been done only one year of iSPIRT’s founding! To mark this occasion, a get together of all those connected with iSPIRT was organized last Saturday in Bangalore.
The well-attended event saw participation from various sets of people associated with iSPIRT and from across different spectrums of the product startup ecosystem. In attendance were iSPIRT Founder Circle Members, iSPIRT Fellows, Mavens & Saarthis, representatives from iSIPRT’s partners for different initiatives, key people from the investor community and the media as well. iSPIRT’s anniversary party provided for a good reason for the different stakeholders to come together for an evening filled with great conversations & fruitful interactions.
There was an interesting twist at the beginning itself. At the entrance, each participant was to pick up a card and write their names on it. The card also had a pledge that they’d take towards promoting & helping Indian product startups by ‘paying it forward’. One would then write their names on it and hang it to the ‘tree’ in the center of the room. On the way out, one would pick up a random card (of course, ensuring that it’s not one’s own) from the tree and then connect with the person whose details are on the card! That’s a pretty nice way of getting people connected and having them know one another.
The evening began with each participant introducing themselves and sharing how they’ve been associated with iSPIRT and their experiences and learning. This brought out very interesting perspectives. There were ‘customers’ of iSPIRT – those who had benefited from the various initiatives of iSPIRT, there were ‘angels’ (Founders Circle Members) who were looking to help other startups grow by making their valuable resources available to other product startups and there were the iSPIRT ‘team’ members – Fellows and volunteers who firmly believe in the ‘pay it forward’ philosophy. There were also those from the media tracking product startups who shared their views on how iSPIRT has impacted the ecosystem
Awesome energy, signs of a path-breaking product revolution, great bunch of ‘karma yogis’. Happy Birthday #iSPIRT! pic.twitter.com/zoAzo0AKGN
The conversations gathered pace as the introductions happened and the participants stepped out to the lawns to launch the fire lanterns. It was quite cold and there was a slight breeze because of which the lanterns wouldn’t light up easily. But entrepreneurs being entrepreneurs, they wouldn’t give up so easily. We did manage to launch quite a few lanterns and it was quite a sight to see the lanterns float high in the sky! Reminded one of Sharad’s blog post – Fireflies Lighting Up The Sky!
Dinner, drinks and some more conversations followed! It was an evening well spent – reminiscencing about the wonderful year that iSPIRT completed, meeting interesting people from the product startup ecosystem & having interesting conversations with them and going back with a stronger resolve to do our own bit to indeed transform India into a ProductNation!
With the raging trends in mobile adoption space and incredible growth of e-commerce, we at Zinnov recently concluded a study on “Consumer Mobility and E-Commerce”. This study overall covers mobile and ecommerce space in the NCR area. This first-of-its-kind consumer led study highlights major trends shaping the industry in the mobility space and clearly spells details like the kind of spending that is happening on devices, the various payment mechanisms, device change trends, purchasing patterns of apps and devices and their usage on different OS platforms. I am hereby sharing a few study snapshots for your reference:
On an average, NCR consumers spent INR 18,230 on buying a smartphone; 10% of all smartphones were bought online in NCR
16% of all smartphone users in NCR also own a tablet device
83% of the NCR consumers never paid for a mobile app; 63% of consumers never clicked on a mobile ad
50% Consumers in NCR use E-Commerce Websites to Research on Products before Buying them Offline
34% of NCR consumers shopped online at least once a month; at least 25% say that they do not intend to shop online
35% of respondents use mobile devices for e-commerce purchase in NCR
As the new year approaches, its customary to review the year that has passed. Here is my take on where we stand on innovation at the end of 2013.
Positive Highlights of the Indian Innovation scenario in 2013
Innovation in the public/strategic sectors took two important strides. The first was the successful launch of the mission to Mars (Mangalyaan) which demonstrated India’s ability to undertake complex scientific and technological projects at low cost. The second was the initial operational clearance for the Tejas Light Combat Aircraft by the Indian Air Force.
The emergence of a new generation of Indian technology companies like Vigyanlabs, winner of the Nasscom Innovation Award in the Technological Innovation category for 2013 was another positive development. Vigyanlabs solves an important problem (high consumption of power by data centres) with a system solution that is backed by a US patent.
Some of the most important innovations took place in the political sphere. Two new entities demonstrated the potential for such innovation. The success of a young political party, the Aam Aadmi party, in the Delhi elections demonstrated the value of a grassroots approach to politics backed by creative use of the social media. In Bangalore, the Bangalore Political Action Committee B.PAC seeks to be a catalyst for “good politics” by supporting candidates with a clean record. B.PAC also trains aspiring politicians.
Another timely organizational innovation was the launch of the Indian Software Product Industry Round Table (iSPIRT), a think tank devoted to the promotion of India as a power in the software product industry. Two initiatives of iSPIRT – one to connect Indian product companies with the requirements of India’s large small and medium enterprise (SME) sector, and the other to create a vibrant market for acquisition of software product companies (“M&A Connect”) have shown the potential of efforts to close the gaps that hinder the emergence of a vibrant product ecosystem [Disclosure: I am associated with iSPIRT as a member of its Founders’ Circle.]
Market-driven innovation efforts by large multinational companies such as Renault (with the Duster) and Gillette (with the Guard) showed that some MNCs are coming to grips with what it takes to innovate for the Indian market. Yet, the overall MNC innovation scenario in India was mixed with some companies scaling down their efforts to use India as a base for emerging market innovation.
The Indian Industrial Innovation Scenario
2013 was a decidedly mixed year for industrial innovation in India. One of the mainstays of Indian industrial innovation, the transportation sector, had a poor year. Despite several efforts, Tata Motors was unable to revive the fortunes of the Nano, and sales remained muted. Mahindra’s earlier success in the SUV market with products like the Scorpio and XUV 500 was eclipsed by determined efforts by MNC automotive companies (Renault with the Duster, and Ford with Ecosport). By all reports, the initial results of Mahindra’s acquisition of Reva (India’s pioneering electric vehicle company) have not been great either with their first post-acquisition product, the E20 seeing only moderate success. Neither Tata nor Mahindra had successful launches during the year. In contrast, MNCs had several successful launches including Honda’s Amaze and the SUVs mentioned above.
Zydus Cadila successfully completed trials for what may become India’s first new chemical entity to reach the market. But the Indian pharmaceutical industry faced several setbacks as prominent companies came under the scanner of American and European regulators, and big names including Ranbaxy and Wockhardt faced regulatory action. Since, their ongoing operations in the bulk drugs (APIs) and generics space provide the cash to fund their innovation efforts, any setback to these businesses could have a long-term negative impact on the Indian pharmaceutical industry.
Traditional Indian business groups have begun to realize the importance of a more structured approach to innovation, but are struggling to evolve appropriate processes to do so. My co-author, Vinay Dabholkar and I received enquiries from such companies in different sectors, but few of them translated into specific assignments.
The Innovation Ecosystem
Reflecting India’s overall struggles with enhancing innovation output, India slipped two positions on the Insead/WIPO Global Innovation Index in 2013. India’s biggest weaknesses are in the institutional environment, and in higher education and R&D.
The latest available R&D statistics (pertaining to 2009-10, released on September 2013) show that India’s R&D expenditure as a proportion of GDP is static at around 0.88% since 2005-06. But, there are two important changes to note. The sectors accounting for the largest proportion of industrial R&D spending – pharma and transportation – continue to be the largest, but their share has come down to 27.7% and 14% respectively from 45% and 17% respectively earlier. This is a positive development as it shows other sectors increasing their R&D spend faster. The other interesting development is that private sector industry now accounts for 28.9% of all R&D expenditure and the entire industrial sector (private + public sector) for more than 34%.
One piece of good news is that the proposed Inclusive Innovation Fund has taken a step forward with an in-principle approval of the first tranche of funding. But the operational details still seem some distance away. It looks unlikely that the Fund will be put in place before the next general elections, and it remains to be seen whether the next government will see it through to fruition.
During the year, the Department of Scientific & Industrial Research re-jigged its schemes for supporting R&D by industry. New schemes include “Patent Acquisition and Collaborative Research and Technology Development” (PACE) and “Promoting Innovation in Individuals, Start-ups and MSMEs” (PRISM). As far as I can make out, the PRISM scheme is not too different from the TePP programme that was quite popular earlier. The PACE programme provides loans for companies to acquire patented technologies and then work on them further. In the past, the common problems of government support schemes included processing time, centralization in Delhi and inadequate scale. Let’s hope the government is able to address such issues this time.
Another useful development is the incorporation of innovation into the Results Framework with which the Performance Management Division of the Government of India measures the performance of government ministries and departments. This will hopefully result in a greater focus on innovation in the government.
Conclusion
2013 wasn’t a great year for innovation in India. Industrial innovation, in particular, seems to be at the crossroads. I hope that a focus on innovation will return once we have a new government in place later this year.
The inaugural edition of PNBootcamp at Pune is the best thing to come out from iSPIRT yet – in my opinion. For all the startups that missed this bootcamp, I strongly recommend staying tuned to pn.ispirt.in for the next playbooks and bootcamps.
There were two themes in the bootcamp:
‘Discovery Hacking’ for those companies who have not yet figured out the product-market fit.
‘Scale Hacking’ for those companies who have figured out the product-market fit and are now looking to build a repeatable and scalable business model.
The participants were divided into cohorts of 15 and these cohorts took part in day long highly interactive discussions facilitated by practitioner entrepreneurs who have ‘been there, done that’. It was very heartwarming to see the ‘pay it forward’ maxim of iSPIRT in full steam. Successful entrepreneurs disseminated their hard-earned learning from their journeys with the intent to improve the product ecosystem in India and ‘let a thousand flowers bloom’. Do visit the PNBootcamp website https://pn.ispirt.in/pncamp/ to look at the illustrious list of facilitators and volunteers.
While trying to figure out how to condense the 50 pages of my notes from the bootcamp into a blog post, I felt that I could do most justice by writing down the top 101 takeaways. Here goes:
Discovery Hacking:
The most common mistake that startups commit is to build something nobody wants. This is also the largest risk. The most important question to ask is – will my offering remove customers’ pain point? One must first confirm ‘the need-gap’ priority. Use tools such as surveymonkey, competitive analysis and customer interviews to see if the need is there and also if it is important enough that people will want to pay for a solution. People might say that this is a great product, but they may not want to pay for it.
Definition of a customer: “The person who writes the cheque”. Even if you have users, but no one wants to pay for your offering, then you don’t have customers. The customer is the person who pays you, and can be different from the person who uses your product.
Do not confuse validation of the problem with validation of your solution. Use the Minimum Viable Product (MVP) to validate that your solution is indeed solving the problem for the customer. ‘Build, and they will come’ is not a sound philosophy. It rarely works.
If not even a single prospect is jumping out of their seats for your solution, then the product-market fit is poor. It gets a lot harder after that.
Startup journeys are typically 4-6 years. You need to be in it for the long haul. Startup journey is very hard. There are times when it can be frustrating for days or months at a stretch. Consider the opportunity cost and your level of seriousness before starting up.
There are several distractions at each point during the startup journey. Maintain your focus on two important things – Sell and Code. If you are not selling or coding, be 200% sure how that activity is going to help your startup.
Building a business is bloody difficult. Learn from your peers and other people’s mistakes.
Focus on prototyping instead of pitching. Focus on delighting your customers.
Sell. Sell. Sell. Sell first even before building the product. ‘Sales’ is serious business. It is the most important aspect of building a business.
Investors are not always right. They just have their point of view based on their experiences, just like everyone else. Build the business. Investors will follow.
It is a myth that Sales involves lying and misrepresenting facts. The best sales guys are truthful.
It is a myth that one needs a business degree to do good business. Some of the best sales people are techies.
It is a myth that techies can’t sell. In the earlier days of the product, when it is not well known, it is the founder’s passion and vision that helps selling.
Hiring a sales guy early on is a mistake. Sales people should come later in the cycle when the business model is validated and you need to start scaling.
You are in the driver’s seat. Never take eyes off the road, ever. Keep laser focus on your business. Avoid distractions like media and news about other companies. There is no room for distractions in a startup.
Startups are founded typically due to emotional reasons, which makes it all the more important to have a disciplined approach. Also, friends and family encourage and we start off with a lot of personal biases. As far as possible, decisions should be driven by metrics, score cards and analytics. Create the discipline to value cold hard data over opinions.
You have to be very scientific in your approach. You need to have a good understanding of answers to the following questions:
What is the problem you are solving? What is the validation?
Who is your customer? What is your niche? Initially, you must target as narrow as possible and then expand to other target segments after you achieve success there. Become the king of a small hill first and then expand.
How do you sell? What is your cost of sale? If your cost of sale is more than the Life Time Value (LTV) of the customer, then it is not going to be a profitable business.
What is the size of opportunity? This is basically to get a sense of how much your business can potentially grow to. This question is important for your own personal goals and also if you wish to approach investors. If the size of opportunity is too small, it may not be worthwhile for you to try to build the business.
Who is your competition and what are the current substitutes? This is important to see if people are going to use your product. Remember that if you are automating something, one of the substitutes is doing it manually.
Lean Startup Methodology works. Every startup founder must be familiar with these concepts. Great books on this topic are ‘The Lean Startup’ by Eric Ries and ‘The Startup Owner’s manual’ by Steve Blank and Bob Dorf.
Use experiments instead of opinions. Most of what we start with are “Assumptions” and “Opinions” and not “facts”. No idea survives first impact with the actual customer.
The only way to validate our opinions and assumptions is through clear metric driven experiments. Convert the assumptions into ‘verifiable statements’ i.e. numerical hypotheses. For example, if show the paper sketch of my product to 10 potential customers, 2 of them will agree to give me a conditional advance order. Then run this experiment and measure the response. Based on the response, you must use your judgment to either persevere or pivot. Design tiny experiments which can be run in the least amount of time.
Do experiments with an open mind. Design the experiment to validate your assumption rather than just reinforce your bias. Savor any surprise findings from your experiments as that new knowledge will help you make better judgments.
Do all your experiments with your Minimal Viable Product (MVP). You can add scalability, security and other aspects after you have got a paying customer. A general rule of thumb is that it should not take more than 3-5 months to validate your assumptions.
There are different kinds of MVPs with varying fidelities that will help validating your assumptions.
Customer interviews and surveys. Low fidelity. This might help in validating the problem, but it does not validate your solution.
Landing page on your website + traffic driven using Google adwords. Also low fidelity, but helps in validating the problem and that people are looking for solutions.
Concept videos. Similar fidelity to landing page.
Paper sketch. A little more fidelity as now prospects can see how you are planning to solve the problem.
Digital wireframes. More fidelity as they can visualize how your solution might be and whether it is of value to them.
Concierge MVP or Fake-O-Backend. High fidelity. This is where you manually process the customer requirements without putting any code or systems in place. But the customer is able to use your service to solve his problem.
Working prototype. High fidelity. Immediate feedback on whether your solution solves their problem.
The product itself. Highest fidelity. Typically, MVPs should not have this level of fidelity.
The cost of change (a.k.a pivot) increases exponentially as the product goes through idea, prototype and launch stages. Also, the emotional commitment increases at each stage which makes it much more difficult to make those changes. So try to make any changes as early as possible.
Do not make large investments without validating your assumptions. Among your assumptions, pick the ‘leap-of-faith’ assumption which is most important and validate it first. If the ‘leap-of-faith’ assumption fails, everything else fails.
If you are in the business of ‘marketplace’, you need to validate your assumptions from both the suppliers and the consumers. Validate the supplier side assumptions first as they are the ones who will be making money in the marketplace. If you cannot validate supply side assumptions, there is no need to validate consumer side assumptions.
First do the value experiments to figure out if there is a real need your product is solving. Once you have figured out that you are building something that some is willing to pay for, then run pricing experiments to figure out the right price for your product. Pricing experiments can also be done using A/B testing. For different sets of users, try different price points to figure out what price you want to finally decide. Simplicity is generally a very good thing, particularly in pricing models.
Ideally, get an advance purchase order or a letter of intent (LOI) before writing any code. This also validates that you have found a buyer. Sometimes, we might a ‘user’, but that person may not have the buying authority. In those cases, you might be building something that is difficult to sell. It is better to sort out ‘who is the buyer’ assumption as early as possible.
For startups, it might be sometimes difficult to get an advance purchase order. In those cases, validate the buyer assumption by seeking non-monetary commitment from the customer. For example, if a pilot needs to be done, the customer might be able to offer you accommodation and food in their guest house and also commit the time of some of his employees.
Focus on one BIG problem at a time. For example, do not try to solve a BIG technical problem and a BIG sales problem at the same time. Focus on doing a few things well, instead of doing a lot of things.
Make it very painless for the user to give you feedback. This is the most valuable thing during ‘Discovery’ stage. Use this feedback and iterate.
Always have a way for the customer to get a free trial. There is no substitute to the user actually using the product to validate your assumptions. And reduce the friction to trial as much as you can. Make it as easy as possible and don’t make the user think or read. Case studies, videos etc. help. But they will not buy till they experience the product.
If your offering is a service (as opposed to a standalone product), do not give it for free. If people do not want to pay for a service, it means the need is not important enough.
Till such time that you have found the product-market fit and have got paying customers, do not hire a sales person. Hiring sales people is a scale problem, not a discovery problem.
It is usually good if your product idea comes to you because you are facing the problem yourself. This accelerates the validation of your assumptions and reduces the risk of making mistakes.
Customers will buy the product if it solves their problem, not because you are good at selling. The product should be able to sell despite a poor sales experience.
Getting the target customer right is very important. Avlesh Singh of WebEngage initially felt that engineers were his customers as it would automate work for them and keep the marketing guys at bay. But he realized that engineers were not buyers. They didn’t have the budgets or business reasons or the willingness to buy their product. However, the marketing folks were really interested in their product at it solved their business need. They also had the budget and they could see return on investment. It would also make them less dependent on their internal engineering teams. Pivoting the customer segment from ‘Developers’ to ‘Marketers’ was a major turning point in WebEngage’s journey.
Pricing model should be based on customer’s perceived value, not on some technical aspect. For example, instead of charging for number of HTTP requests, it might be better to charge based on number of surveys completed.
Derive your price based on market dynamics (current manual cost or pricing of competition) and not on your incurred costs. Build some differentiation in your offering and use that for price arbitrage.
For techie founders, one thing that needs particular attention is that techies are highly opinionated and look at things in black and white. We need to get over our strong views. One way to achieve this is by meeting and talking to different kinds of people and getting their perspectives.
By writing good content on your blog site, you can attract customers and establish thought leadership. If a person spends 8 to 10 minutes on your web-site, it is very likely that he will sign up for your free trial.
Quora is a very good forum to attract customers. Provide genuine answers without shamelessly promoting your product. People hate it and you can also get blocked on Quora for directly promoting your product. One tip is to include your product name in your Quora user name – that way when people see your name, they see the name of your product too.
What works for some other company might not work for you in your context. There are several factors at play and it is difficult to figure out. The only way is to run various experiments and see what works.
Think in terms of how the end user is going to use your product. The human element is very important. You must know your user well – really really well. Know the context in which the user is going to use the product – the user’s demographic, life style, social life, aspirations, work life schedule, how they work, and their aspirations. Create personas of the users. There are free templates available online to create target personas.
Feedback from users should shape the product. It is common to see several bug fixes or new features between version to version. But rarely do we focus on customer delight as the focus of a release. Customer delight should get more priority than new features.
You must observe how the user uses the product to get a deeper understanding. If you ask customers pointed questions, they will give pointed answers and hence it is not very valuable. Engineering, business development, product mgmt and UI teams should all experience first-hand how the user uses the product.
Never ask customer what they need – instead observe what they do.
Never ask for their feedback – instead watch them use it.
Never just listen to what they say – instead observe their behaviour.
There are free tools for capturing the user behaviour. They help you record the user experience through a web cam when they are using the product. Search for them online and evaluate for yourself.
Sign up folks from your target segment. Call 5 folks on a Saturday and observe their behaviour with the product.
Be frugal and save money. Do not splurge during initial days.
Startup people have to be hands-on. Should be ready to roll up the sleeves and do all kinds of work.
You have to persevere. You will hear a hundred “No”s before your first “Yes”. Tip: People seldom refuse a cup of coffee. Ask for that small coffee meeting. If the customer sees value in your offering, he will give you more time.
Hiring good people is good. If they are good hearted, better. Focus on getting a team that can run as fast as or faster than you.
Luck is more important than competence. Competence is a must, but you need luck also to be successful. There are several factors which are not in your control but can have a major impact on the outcome of your company. However, you must run like the devil is behind you and not just wait for lady luck. When a lucky event happens, you must analyze it to figure out why the lucky event happened.
Sales, product management and engineering are three important pillars of a startup. Ensure you have specific individuals who are tasked with each responsibility. The same person can play multiple roles, but you must be clear on who is playing which role.
You must qualify the companies/individuals who will be suitable for your product. Not everyone is going to be your customer.
Scale Hacking:
Scale hacking is all about aligning and finding the business model after getting the product-market fit. The key to scale hacking is to find out what is working and do more of it.
Initial sales happen because of the founder’s passion. Sales people need a template for selling.
If you have a lousy product, nobody can sell it. The product should be great and the positioning should be right. Folks should be willing to buy it in spite of the sales experience.
There is no template for scaling. You need to explore different avenues and channels. Some of them will work for you and some of them won’t. Even when some are working, you should be exploring new channels as you might be missing out a very good revenue source.
You need aim to be in the top 3 players in your market if you desire to scale. You first have to be a player on par with competition.
You might have to change your sales pitch multiple number of times based on reaction from the market.
When the customer can visualize the benefits of your product, it makes a huge difference. E.g. if you say that the user can jog after taking your medicine – it can be visualized by the customer and have a bigger impact than just saying it will make you healthy. Visuals are very important (good graphics). Do not expect the customers to extrapolate mentally.
You have to show customers the solution to their problem. For example, freshdesk creates a site called customer.freshdesk.com and puts their logo there so the customer can see how the solution will look like. Also, they show role based dashboards based on who they are giving the demo to. Different people like to see different things and you need to customize your demo to how it will help them.
Marketplaces are something you should definitely consider for scale hacking. E.g. Google app store.
Integrations are the new SAAS channel. E.g. integrate with salesforce, basecamp etc. Then write a blog on how the integration works. Write to the business person at the Salesforce side and ask them also to promote your integration. Typically, they are also interested in promoting something that promotes their product.
Positioning is very important in the mind of the customer. For example, though Freshdesk does several things – the core positioning is that it is a customer support solution. For example, they provide invoicing, chat, time sheet also, but they do not position them as separate products – it is all under the umbrella of customer support.
Unassisted buying (e.g. purchase directly from the website) can get you only small tickets. If commitment is higher, customers need to talk to a live person and you need to invest in field sales.
Importing from competition is a 1.0 feature. Do not postpone it thinking it is not your core work. From customer’s point of view, it is very important to have his current data migrated over to your product. Otherwise, they may not even bother to try your product. Make it very easy for your customers to come over to your solution.
Customer’s attention span is very small. He might sign up for your product, but forget about it. For example, a customer might provide his email id and sign up, but might not even bother to go to his Inbox to click on the verify link. Hence, engaging leads is very important and focus your energies on getting them to trial your product.
Nobody likes to talk to a sales guy. Have a title like ‘account manager’ etc. and this person says that he is trying to help out with the evaluation.
Webinars are very effective for scale hacking. Offer a free webinar on a related topic and soft sell. There has to be enough meat in the webinar content itself which will be attractive and worthwhile for the attendee. In webinars, people do not want to hear your pitch. They want to see thought leadership and practical advice for them. If you can, have customers speak at your webinars. This is better than someone from your company speaking. For example, the title of a webinar can be ‘CMO of company X speaks on how to maximize ROI on Y’.
Once you start scaling, you must have support staff available in the time zone of the customer. This is very important due to global competition. In India, companies have different shifts of support personnel working from India but during the business hours of the customer’s time zone.
Pricing is a challenge. You should look at the current cost for the customer, price charged by competition and come up with your own pricing. If it is too high, it scares customers away and if it is too low, you end up leaving money on the table. But this problem is unsolvable. You can only do price experiments to figure out the price of your product in the market.
ShopSocially moved to small monthly subscription + cost per social action. This way they have a very low entry cost for the customer and as the customer uses more of their product, they will pay more.
Try to get a marquee customer in your portfolio. It will have a huge impact on your credibility and growth. Suddenly, prospective customers will look at you in a very positive way. So you need to be flexible on pricing during the initial days. Give discounts in exchange for case studies and testimonials. Or give discounts over larger timeframes. E.g. 3 months free if they purchase a 1 year license.
Evaluating a sales person is tricky, unlike an engineer where the results can be directly attributed to the efforts. Tip: Shadow your new sales hire for 3 months to judge for yourself if is good for your business. If there is a mismatch, let go of the sales guy as early as possible. Otherwise, the cost to your business is huge.
Always collect data on how people are using your product, which features they are using and which they are not. This should be one of the main ingredients for product direction decisions. If the product manager is sitting in a cube, then it is not good. He should be talking face to face with customers and getting real world feedback.
When you are trying to move customers away from a competitor who they have already purchased, you need to protect the customer’s investment so far. E.g. when a customer had 6 month license still left with your competition, you should offer 6 months free on your product to protect their investment. However, see if you can have the customer pay for the first month and then the next 6 months given free. This ensures that they are serious about switching to your product and have made a commitment to you.
If you are in a commodity market where there are hundreds of competitors, then execution is the key differentiating factor. Of course, it goes without saying that the product has to be very good. If you are in a niche market, then value proposition is more important than execution. You might not have the best quality and completeness of the product, but if there is not much competition, then you should focus on the value proposition more than the execution of completeness.
Think hard on how you can leverage your happy customers. Ask for referrals. At every sale, try to leverage. Ask your referrals to write guest blogs on your site, case studies and testimonials. Photo testimonials are better than just text as they are more credible.
Leverage influencers. They can tweet about you. Follow influencers and include them with @X so they will notice you. Try to get them to follow you. Share signups and success stories through social media. As the company grows, you need one person dedicated for social media and working with influencers, establishing connections etc. Bear in mind that influencers love praise. It also helps if you can get thought leaders from academia writing about you.
Write thought leadership articles and blogs – maybe twice a month.
When you sign up a customer in a vertical, find out the competitors in their space and try to make them your customers. Folks pay more attention if they know their competition is using your product.
Set up Google Alerts on keywords so you get notified of new stuff. Then go there and leave your comments. Mention.me is another site similar to Google alerts.
LinkedIn groups is a good source of leads. Answer questions there. Also post questions yourselves on challenges in your domain.
There are tools like pardot, marketo, data.com for follow-ups. Use them if you see the ROI on them.
Conferences are not so great from a lead generation point of view. But they are good for showing your presence in the market place.
Don’t innovate on the business model, particularly when you are a startup. Go with tried and tested ones. Select the right sales model for your product depending on the kind of product and price of the product. Look at how your competition is doing it. Usually, it is better to follow their model during the initial days and then experiment later.
A recommended reading for all startups is “Most startups should be deer hunters”. Essentially, there are three types of customers – elephant, deer and rabbit. Catching elephants is very tough until you are of certain size. Catching rabbits is very tough to survive as they are spread too thin and even if you catch one, you get only very little meat. Hence try to catch deer – which are right sized for you.
For cheaply priced products, educational institutions are a good place for doing pilots and getting feedback.
In scale hacking, have a good sense of metrics on customer conversions. How much revenue is being generated, from how many customers, out of how many evaluations, out of how many leads, out of how many visitors? Measure, track and improve the rate of conversion at each stage of the funnel.
Once you have had success with your first product, you should consider other products for scale hacking. Build newer revenue streams based on the incoming cash of existing successful products
Hiring cross-continent is a very big leap-of-faith for an entrepreneur. You need to be very careful with the first set of people you hire in a different geography. Culture alignment is key to global success.
Taking funding for scaling is a very good idea. Investor money is like rocket fuel. You can either go up or fall down fast. You can go from ‘darling’ to ‘donkey’ quite fast with VC money.
All news is good news when you are small. So don’t shy away from publicity of any form. Of course, do only those things that you are comfortable doing.
Requirements should be driven by customers, where ever possible, instead of internally imagining and creating requirements which might not be of any value to your customers. When a sales person gives a requirement, ask ‘why do we need this and how will it help’ five times. If you can find a good answer, then the requirement is a real need.
When deciding on which new requirement should be added to the product – consider the return on investment. This is commonly overlooked. Usually, the latest incoming requirement is given more importance at the cost of an older one. Have a methodology for choosing requirements – based on factors such as number of customers requesting the requirement, the ROI that the sales team believes this will generate and if the sales team is willing to stick out its neck for this requirement. Always use data to make product decisions.
During scale hacking phase, ensure you have continuous customer feedback. Have a customer advisory board of your key customers and have a relationship manager who works closely with these customers. Get their inputs on new features you are planning to build. Having a good relationship with them also helps you know the pulse of the market, get inputs on competition and getting strong case studies and testimonials. Meet with key customers periodically.
Channels are extremely important for scaling. Be clear on how the channel can make money off of you. Partners should benefit because of you. Either directly by making money or leading to sales of something else. For example, in non-SAAS products, system integrators make money by implementation, customization and support.
Partnerships are for successful products. That way the partner can sell easily. They want a winning product. If the product is new and complex and it has a long sales cycle – partnerships might not be of use to you.
Partners can help you enter large enterprises as they are already on the vendor list. They can ‘white label’ your offering. Getting on to the authorized vendor list of large companies is itself a very complex and time consuming process.
Consider partnering with frameworks – e.g. building an add-on to an existing framework which has a good marketplace. That way, your discovery problem is solved to a great extent. Many companies die because they struggle to reach their prospective customers.
In SAAS kind of offering, traditional partnerships do not work as the partner does not make good money upfront. They do not want to wait for a long time to reap the rewards. SAAS partner ecosystem is not there yet.
Partnering with platform players like Microsoft, SAP, Oracle is a good idea in principle. But even there, promoting a startup’s product is not easy. They have very high qualifying factors for them to select your product for promotion. For example, you need to already have thousands of users. Partnering with platform players is a great strategy for scale hacking once you have a critical mass of users.
Engineer driven products are typically not so great in user experience. It might be worthwhile to hire/outsource to a UX expert. These days, coolness of UI is a very important factor.
Mobile centric or mobile first is a very sound strategy for growth. It is easier to find early adopters.
Conclusion
I hope that at least some of the 101 takeaways provided new data points in your startup journey. While there is no silver bullet and each startup has to go through its unique journey, there are several common themes that are generally applicable. And we can learn from those who have trodden the path before us.
Many thanks to iSPIRT and all the volunteers and facilitators of the Product Nation Boot Camp for this wonderful initiative.
A typical SaaS Agreement is akin to a “property lease agreement” whereby the user would pay rent for the property as long as it is used and on termination of such a lease, the user would cease from using the said property.
