ProductNation Archives - Page 17 of 28

27/01/201424/01/2014

Consumer Mobility and E-Commerce Zinnov study

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

NCR Consumer Mobility and E-Commerce Zinnov study from pn.ispirt.in

04/01/201404/01/2014

Innovation in India: Where do we stand at the end of 2013?

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.

03/01/201431/12/2013

101 Takeaways from the First ProductNation Boot Camp #PNCamp

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:
1. What is the problem you are solving? What is the validation?
2. 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.
3. 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.
4. 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.
5. 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.
1. Customer interviews and surveys. Low fidelity. This might help in validating the problem, but it does not validate your solution.
2. 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.
3. Concept videos. Similar fidelity to landing page.
4. Paper sketch. A little more fidelity as now prospects can see how you are planning to solve the problem.
5. Digital wireframes. More fidelity as they can visualize how your solution might be and whether it is of value to them.
6. 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.
7. Working prototype. High fidelity. Immediate feedback on whether your solution solves their problem.
8. 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.
1. Never ask customer what they need – instead observe what they do.
2. Never ask for their feedback – instead watch them use it.
3. 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.
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.

02/01/201416/01/2014

Announcing InTech50 – A showcase of 50 Innovative Product Companies to Global and Indian CIOs, Product Company executives, Investors and Analysts

InTech50 is a showcase of some of the most promising software products created by entrepreneurs from India. A panel of Chief Information Officers (CIOs), Venture Capitalists, and Product Leaders from previous successes will decide the fifty companies that make the cut to InTech50 selection criteria. These chosen companies will receive advice, on-going mentoring, product marketing support, and funding to scale their offering to the global markets.

So Why InTech50?

The founders of InTech50 truly believe that the Indian start-up ecosystem is on the cusp of explosive growth—in innovating for the enterprise, society, and for social causes that will alleviate the quality of human life. We bring global experience, wealth of knowledge in dealing with global markets, and true enterprise-level insights to help these companies scale their vision.

InTech50 provides these entrepreneurs with a platform to showcase their innovations to folks who are visionaries in their own way and have the knack of seeing possibilities very quickly. The platform will create possibilities that we can think of but more importantly it will create a network that will evolve in ways that we cannot predict in any way!

Why apply?

InTech50 will help software product companies enter global markets through our network of early adopters, partners, co-innovators and investors. Our platform helps your company with exposure to these powerful members of the ecosystem in your geography—India!

Winners of the InTech50 are acknowledged as the most promising in their space, and receive every effort—from product strategy, UI, product marketing, sales and global partnership—all designed to help them succeed in massive scale.

Please visit www.intech50.com for further details on who can qualify.

When and where will it be held?

Intech50 will be held on Apr 9th and Apr 10th @ Bangalore, India.

How much does it cost?

It is absolutely free for applying. 50 companies will be shortlisted by the Advisory Board comprised of global and Indian CIO’s, product company heads, venture capitalists, and analysts. The selected companies will need to pay a fee of Rs. 25,000 to cover expenses for two attendees. Only the 50 shortlisted companies will get to attend the event. So what are you waiting for, go ahead and apply, the last date is 31st Jan 2014.

01/01/201401/01/2014

iSPIRT wishes you a Happy New Year!

Since our inception a year ago, we have been relentlessly working toward the cause of creating an amenable ecosystem for software products development in India. We greatly appreciate your support in helping us reach where we are in such a short time.

We have done a great deal over the last one year to implement and achieve our goals and the pursuit of our vision is our primary and unwavering focus. Whether you have been an iSPIRT member or are just following us, we want to assure you that our first priority is to serve the cause of software product industry in India.

As we welcome 2014, we are both proud and grateful for all we have achieved thus far with your invaluable support – be it in terms of ideas, inspiration, guidance or feedback and look forward to our mutual successes in the future.

With best wishes,
The iSPIRT ProductNation Team

30/12/201330/12/2013

Common Questions about Founders

Is there a right age to become an entrepreneur? Any age is a good age. The founders of Microsoft, Google, Facebook started their companies when they were very young. Steve Jobs, who founded Apple at an early age, continued to show amazing entrepreneurial capabilities in his second stint at Apple which began in his 50s. Young professionals in their twenties have amazing energy, and understand the pulse of today’s generation. They can conceive products that others with set thinking cannot. The young have no fear of failure. In the thirties, one has a good blend of work experience, drive, network of contacts and knowledge of the business. Those in the forties and fifties have significant experience, busi- ness connections, understanding of the market, and financial security to risk a start-up. A younger entrepreneur may be more hands-on and seek mentors to provide a guiding hand and connections. Someone older might operate more like a Chief Mentor and get a young, smart team to execute.

Is it necessary for an entrepreneur to have some experience? Is it better to get this at a small company or a big one? The right experience in technologies and domain related to your idea can be a significant advantage. Learning happens in any sized company. By working in an early stage company, you will have lived the pressures and dynamics of building a product ground-up. You understand the importance of being flexible and adapting the product based on early user inputs and competition. At a larger company, you will have experienced a mature organization structure, with different teams focused on specific objectives (engineering, support, sales, marketing and operations). You understand the importance of collaboration, brand building and continuous product innovation to stay ahead of the competition.

Should the founders develop a product related to their previous job? You must be very clear about the terms of the Non-Disclosure Agreement (NDA) signed with your previous employers. Any work, including, but not limited to research, algorithms and source code, that you did for your employers, belongs to them. Even information such as client and employee lists, salaries, contracts, is con- sidered highly confidential. When you exit the company, do not take away anything related to work, whether in printed or electronic form. If you are a relatively senior person in the company, and start a new endeavour in the same space, your previous employer may keep a close watch. This is especially true if your company becomes their competitor. It is best to pick an area that leverages your technical expertise, but is in a different space from your previous company. Maintain a document that is a dated record of how you conceived and built the product. This will enable you to file for patents or contest any legal challenge. NDAs generally restrict any solicitation of employees for at least one year. If several founders worked in the same company, ensure that you did proper suc- cession planning and your exits were non-disruptive. It is best to maintain good relationships with your previous employer. They are part of your professional network, and they could come handy in the future.

Does it help if the founders have worked together for some time? This can be a significant asset. You will have experienced pressure situations together, and learnt to understand each other’s approach and thinking. There is mutual trust and no ego issues. It is good if the founders have relatively complimentary skills and temperaments, but with shared vision and ideals.

Is it okay to include family members amongst the founders or the key team? It depends on whether you want to build a professional organization or a family run business. If the former, any relation or friend should be included purely on merit, meeting the same criteria that you would have from any other founder or hire. Involving a close family member or friend has its merits and pitfalls. A significant advantage is that you know the person, perhaps share a close bond, and have mutual confidence. However, family members and close friends often have in-built expectations from each other. These may be in conflict with deci- sions that need to be taken for the benefit of the organization. At times, other employees may perceive, rightly or wrongly, that family members were granted extra privileges or favours. While many successful companies have been founded by related individuals, there are equally spectacular examples of feuds in family owned companies.

Should the founders and initial team work from a founder’s home? Working from home is fine in the initial days while the prototype is being built. It helps if part of the home can be set up as a small office. However, it is best to shift to an office once there are more than 3-4 people. Working in a start-up means long hours and stress, and separating home from office is important. Home should be a place where you can unwind and leave the cares of work behind.

Reprinted from From Entrepreneurs to Leaders by permission of Tata McGraw-Hill Education Private Limited.

18/12/201316/12/2013

DNA mysteries of Products and Services

It has been an interesting coincidence on the last few occasions in different discussions and industry forums I participated in, they have attracted a good amount of the classic “Products and Services” in IT deliberation. As such, this is not a new debate. It is common to see patrons from the products world root for it by generating IP and for the services gurus illustrate how they are able to tailor deliveries as per customer need to make good revenues.

In the various roles that I have been involved in be it front line sales, to working with target customers, to addressing markets through the channel, or driving product management for products of different types right from enterprise to small and medium businesses that are deployed on-premise or delivered as a service; I have realized it is more than “this versus that”. At the face of it, running “product or services” businesses largely seem to be two different ball-games. They do have different DNAs. However, in addition to the different focuses that are essential on some aspects; these also involve some common influences that need to be capitalized upon. And no, it doesn’t end there. An important element of success viz the customer expectation is undergoing an interesting shift. A customer increasingly expects…a solution! They are neither looking for a product or a service in isolation, but instead for a solution that delights and delivers timely value. In this post, we will explore the characteristic differences—the DNA differences between IT products and services; and some common factors that have a bearing on the business opportunities and performance.

The landscape—A holistic view

Let us start with a holistic look at some key characteristics of what constitutes a product and a service. The marketplace typically includes an offerings continuum. At one of the two ends are pure-play products and at the other pure-play services with combinations in between. It can be illustrated as below:

The DNA differences—A closer look

If we take a deeper look and closely evaluate this in context of IT products and services, around which this post is primarily focused, it involves some common influences, but with distinctly different DNAs to run both businesses. The evaluation of key indicators across these businesses includes consideration for common factors, but with different approaches. For instance, both product and service type of offerings involve evaluation and use of technology, assets and resource planning, cultural bearings and so on. A comparison of DNA differences for some key indicators is included below:

Common influences—A quick digest

As we can see, there are some distinct DNA differences. For instance, meeting a market need versus single customer requirement; transactional approach versus relationship driven, internally focused culture and processes versus tailored to customer. At the same time, aspects like technology, people, and processes are the common influences that can either enable or inhibit effectiveness in either model. They serve both as an opportunity and a challenge! The previous section has covered how the approaches vary across indicators. Let us now briefly assess the common aspects that can greatly influence outcomes.

Technology: Technological advancements are constant. With every technological paradigm shift, right from main-frames to distributed systems to the cloud, with the change in technology capabilities available, businesses have looked at methods to leverage these for maximum benefits. So for a provider, irrespective of the nature of business, they have to constantly find ways to stay abreast of technological advancements to be in a position to lead the market or advise a customer with right solutions. For instance, if we take a look at one of the hottest shifts around SMAC (social, mobile, analytics and cloud), it is not prudent for either product or services companies to ignore those. Products need to evolve to cater changing customer preferences, interaction methods and deployment models. This is not just limited to product companies. These shifts need service companies to ensure their offerings weave these in to truly to ensure customer delight in-line with newer preferences.
People: One of the most significant contributors to the success of any business is the people assets they have. Knowledgeable, motivated, productive and enlightened workforce is needed for runnnig both products or services successfully. Ensuring the workforce it kept current with the market and technology demands and on the soft side ensuring they’re productive is of paramount importance. This of course is an obvious one. But going wrong with this could have the entire game go south even if all else is right.
Process: Processes are a great tool any company can have through which preferred frameworks can be pressed into action for a more consistent and repeatable outcome. These could be applied to internal focused activities like training and development, knowledge sharing, documented development methodologies (e.g. Agile, etc.), sales methodologies and so forth. Processes can help with managing OpEx for both frameworks. Similarly, they’re applicable even to external focused aspects like processes to demonstrate thoroughness of approach, for compliance and so forth. How far to adapt really depends on appetite and culture; which varies from company to company.
Success factors: While the measuring metrics might differ across lines of business, it is a fact that there is no better way to walk towards success than to be driven by results that ensure customer success and delight. This is an essential metric to keep track of that cannot be overriden or ignored in either business.

Looking at all of above, one can think of products and services as two separate circles having distinct DNA differences with some overlap of common influences. All of these put together, put organisations in a position to meet the need of tomorrow. Let’s take a look at an illustration that highlights these put together:

The Ultimate structure—Solutions shift

At the same time, given the economic challenges, the markets becoming buyer markets, general shifts in buying patterns, need to respond to businesses faster, and need to demonstrate value and return on investments (ROI), the focus is increasingly on the “customer” than just a product or a service that is up for offering. Customers today carefully evaluate every penny being spent. They expect to realize value from investments faster. Customers are tired of siloed approaches either by just having a product deployed and not having a working solution, or having a solution frame-work, but the underlying products not being stitched to deliver the value the customer expects from the investments made. Gone are the days where companies could deploy a product and take months or even years to tweak it to customer need. Or suggest a service without having their own skin in the game when it boils down to technology or products involved. Customers today expect product companies to not just deploy a product, but to provide a working solution tailored for their needs. Customers today expect services companies to have the required levels of expertize, coordination and relationships with involved products and technology stacks, to effectively tailormake a solution to meet their needs faster. They do not expect the ball to be dropped in either of the cases to have prolonged deliveries. Customers today are looking for working solutions. Customers today are looking for faster realization of value. Customers today are looking for a positive experience to respond better to business needs rather than being tied up with large IT projects. They need to be delighted—truly!

The shift is really towards using products and services together effectively to deliver effective solutions. Irrespective of their primary DNA, every company will need to evaluate how they can work out the entire DNA strand to have a solutions structure!

17/12/201316/12/2013

Fireflies lighting up the sky

Some years ago, Infosys and Wipro put Bangalore on the global map. Now, Bangalore is once again marching ahead. It is creating a new kind of technology ecosystem, which is culturally different from what exists today.

Today’s tech-ecosystem is about a few ‘hathi’ firms doing IT Services. Metaphorically, this is about manicured lawns, straight rows of carefully planted flowers and an occasional oak tree. In contrast, the new ecosystem is about hundreds, nay thousands, of small tech product startups. It evokes the image of a vibrant forest with fast running streams, wild flowers and bamboo shoots. If you think of the current ecosystem as a cathedral, then the new one is a bazaar.

Behind the cacophony of the new tech ecosystem are two powerful trends. The first one is about Software as a Service (SaaS). Gone are the days of buying big servers, expensive software licences and bulky implementation services. Increasingly, business software is just rented and used by employees much the same way you and I use Yahoo mail. This seemingly small shift has momentous implications.

Since a software company doesn’t need an army to sell and deploy its business application anymore, size is not an asset; focus is. So a plethora of small single-minded startups have emerged. And some of them like Zoho, InMobi and Fusion Charts are making waves around the world.

The best days are still to come. SaaS is spreading like wildfire. Doctors’ offices are using it for less than a price of a Café Coffee Day latte. Apartment complexes are using ‘ERP’ type SaaS business software for Rs15 per apartment per month. Lots of small companies in Peenya and Okhla are using world-class payroll and leave management SaaS business software for Rs10 per employee per month.

Basically, SaaS is going into nooks and crannies where no business software has gone before. Just like mobile phones brought telephony to the masses, SaaS is bringing useful business applications to all SMBs. Indian startups are at the forefront of this emerging revolution.

Complementing this SaaS trend is a grassroots movement for strengthening the tech ecosystem. Gone are the trade bodies; in its place have come in volunteer-driven think tanks and communities like iSPIRT and HasGeek. Much like the Aam Aadmi Party, they use bottoms-up participation to fuel a collective process of creating public goods that everybody consumes.

Entrepreneurs help other entrepreneurs by putting their winning (and even losing) playbooks in the public domain. All this is inspired by the amazing success of the open-source movement that created Linux and Wikipedia. Based on all this, a new glow is visible. Look out for the fireflies lighting up the sky.

09/12/201309/12/2013

Stay Classy! – 8 Rules for 21st Century Marketing!

As this article is being written, possibly one of the greatest Viral campaigns EVER is being rolled out for the movie – Anchorman 2 – The Legend Continues set for a release date of December 18th, 2013!. It’s a sequel to the 2004 movie Anchorman, a stinging parody of 70’s and 80’s ego maniacal TV anchors in the US!

Stay Classy! – is the catch phrase he signs off his newscasts. This also sets the stage perfectly for what it takes to do Marketing in the 21st Century, especially for product companies!

This trailer already has 4.6 million hits as I write this!

The interesting thing about this campaign is that Will Ferrell, the actor who plays Ron Burgundy has been in character for about a month now and has done various things like do a whole series of TV ads for Dodge! Like this one that already has 3.6 million hits on YouTube. As a Brand Ambassador he, surprisingly, says dumb things about Dodge but that makes these ads funny, watchable, water cooler conversation and word of mouth material! (The ads are hits in Canada as well as The Globe and Mail attests from Toronto!).

He goes in character to late night talk shows like this one, promoting a fictitious book he wrote about how to survive a prison riot and has a testimonial written by himself on the top of the book!

Or when two days ago he showed up as Ron Burgundy and hosted a whole 30 minute local Newscast at a local TV station in Bismarck, North Dakota as a co-anchor saying the same dumb things his character would in the movies but in a real live newscast!

What’s the point of all of this? – The last week or so, they have been getting free public relations worth billions of dollars, all of these being covered breathlessly by every channel and every newscast in the US! That’s Marketing in the 21st Century – Blurring the lines between media of every kind – network, cable TV and Social Media like YouTube, not to talk about these links being tweeted and re-tweeted by everyone that finds these things funny!

Jerome McCarthy’s four P’s – Product, Place, Price and Promotion still capture accurately ALL the different aspects of Marketing but how people make it relevant for the 21st Century is pretty interesting and worth the attention of Product Companies! Here are 8 rules for 21st Century Marketing:

1. Making the most creative use of Social Media

Most product start-ups these days are aware of and use Social Media like facebook, Twitter, GooglePlus, Tumblr, Pinterest extensively and that’s precisely the problem! You become part of the noise. How do you stand out among all this noise? You do something creative and unusual like the Ron Burgundy campaign above! And it takes a heck of a lot of creativity to come up with stuff like that (may be not to that scale given the nature of many start-ups) and execute for a small start-up. However, you would notice that the above campaign still relies on the inherent virality of social media and word of mouth! The 21st century has made it possible even for a tiny start-up to go viral and get the publicity it needs, if their campaign is interesting and at the same time achieves the end goals they shoot for!

2. Exploring the use of Big Data for your 4 Ps

Big Data with respect to product start-ups has much less to do with the size of the data than with your use of it. Do you have data on the Audience, Channels, Content and Yield for your marketing efforts? Audience has to do with understanding your own customer segments. What channels have been effective for you? What Content among the different types of content you use to promote your product has been useful for you? What has been the most cost effective ways in which you have been able to convert or maximize the yield for your efforts? What price points have yielded what kinds of conversions for you? Do you have the data and the charts to track these? It’s never too early to get started with these kinds of efforts!

3. Checking out unusual and creative avenues for learning your customer needs

Are you trolling reviews of your Competitors’ Products yet for ideas on what your customer needs exactly? What do they say is lacking in them? Those are precisely what you need in your product! facebook or Amazon was not the first company in their categories to make it big! Having someone already in the same market as you should not be a deterrent! Here’s The Amazon Whisperer , an amazing example of how a few people built a multi-million dollar company just reading Amazon product reviews looking for the words “I wish this product had….”, then making that product in China and selling it in Amazon to begin with and then expanding to other channels!

4. Using all the 21st Century Creative options available to you for marketing

The 21st Century has made possible the most creative uses of Graphics, Sound, Movement captured in videos with just smartphones or tablets. They can be made with professional quality with editing software. Your prospect base may have access to broadband at home and if not, very likely, at work! Are your marketing efforts making creative use of these new possibilities? Most product start-ups may have a demo video of their software recorded with screen capture and a voice, up on YouTube. How many of them show a real user telling you their story and show you how their tool solves your problem? Watch this video of a Biometric Identification System in use! Notice how they talk about problems, benefits, problems, benefits, problems, benefits! This is not a Ron Burgundy type funny video but I bet it talks *VERY EFFECTIVELY* to their prospects! So where’s your video that talks about the problems your product addresses and the benefits it brings?

5. Making your content customer centered and not YOU focused

A blog is a must for every product startup – or so they think! It is very useful to convey very broad discussions about the problem you are trying to solve when you don’t have a product ready as yet and you are in say, stealth mode! However, the game changes completely once your product is out and is in use. Not many may be as interested in your technical esoterica, as they are about the problems you are addressing and the benefits your solution brings! The 21st Century has made available such a huge glut of content in many different forms and people have only a sliver of their time each day for all of them, if at all! The content needs to be interesting, current and relevant for them to spend more than a few seconds! Turn them off with your own tech talk, they may never come back again!

6. Having true conversations with your customers, not just one-way communications from you!

Are your Social Media conversations anything like this? They are talking about the untimely death of actor Paul Walker of the Fast and Furious movies.

Redbox defines itself as being in the entertainment business and so sprinkles its facebook presence with conversations like the one above – relevant, timely and engaging! No matter what your product is, there is always a larger business you are a part of and having conversations like the one above is possible if you are creative enough! Resist the urge to talk about your new releases or features all the time! The 21st Century is all about interactions and this is a good example of what those are!

7. Exploring all of the 21st Century Pricing options available to you

With the ability to keep track of demand and supply at any time, it is possible for some products to be priced with Variable Pricing or Dynamic Pricing! This may not be applicable to all software products but the question of Free Trials vs Freemium Vs Nothing Free Pricing may be possibility with most start-ups. All of them are subtly different from each other, they need to be discussed in detail with respect to your own product, may be A/B tested before choosing one over the other!

8. Creating enough compelling calls to actions to your prospects

Calls to action can be for a variety of things you want your prospects to do – Sign Up for a Free Trial, Request a Case Study, Sign up for a Freemium account and show them a version with limited capabillities, etc. Here are some fine examples of such Calls to Action! And, here’s an interesting article on how to go about designing some, step by step!

The 21st Century has seen the proliferation of variety of new devices like smartphones and tablets. People engage in social media more extensively at home or at work. They are also very handy for anyone making pictures and videos of professional quality. Big Data and Cloud Computing have enabled the collection, analysis and use of massive amounts of data for many uses including marketing. There are many more inexpensive options for cash strapped product start-ups to explore creative ways to do marketing. It’s time to take full advantage of them!

You can buy attention (advertising). You can beg for attention from the media (PR). You can bug people one at a time to get attention (sales). Or you can earn attention by creating something interesting and valuable and then publishing it online for free. – David Meerman Scott, marketing speaker

04/12/201306/12/2013

Bangalore: 30th Nov 2013 | Design Thinking round table with Eskild Hansen

On a typical Saturday morning in Bangalore, a small group of design practitioners and product folk got together at the Fusion Charts office in Koramangala. They were attending an informal round table discussion on the topic ‘Design driven innovation to help make the world a more beautiful and pleasurable place.’

As part of a design tour being organized by the Danish Government and the Ministry of Foreign Affairs, Eskild Hanson (a prominent Danish designer) was visiting Delhi and Bangalore. Members of iSpirit, Indian designers and design thinkers were invited to meet and engage with him on areas of common interest.

Eskild is a part of the Danish government strategic think tank that is developing and strategizing the ‘Danish Design Society.’
His previous workplaces include CISCO and Coloplast.
At CISCO, Eskild was responsible for establishing their first European Design Center in Copenhagen and during this period helped bring a fresh air to their previously ‘boring and bulky’ Wireless Routers. He won a Red Dot in 2011 for one of his designs.
More about his work at www.eskildhansen.com

Here are a few pictures capturing the event:

Participants introduce themselves at the start of the event

Eskild talks about a trend in executive roles – CCO (Chief Creative Officer) / CDO (Chief Design Officer)

Making a point about the importance of competing on factors apart from price, features and technology. (COMPAL and Quanta Computer – Virtually unknown – but producers of most of the worlds laptops!)

Technology as an ‘enabler of innovation’ (As opposed to ‘driver of innovation’)

: User Research – A tool to drive and validate innovation.

The interactive session was a great forum to hear each other’s thoughts on topics related to design and design thinking.
It also gave participants an opportunity to learn more about the Danish Design approach and their innovation related initiatives in India – www.icdk.um.dk.

To know more about the session, check out this sketch note created by Rasagy Sharma, an NID student – https://twitter.com/rasagy/status/407165458303836161/photo/1/large

04/12/201302/12/2013

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

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

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

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

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

WHO AM I?

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

For ________ (what problem)

Because _____ (differentiation)

As a result of ____ (your secret sauce)

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

WHY BUY ME?

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

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

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

Domain Knowledge

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

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

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

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

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

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

Product Market Fit

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Creating a Sales Team

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

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

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

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

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

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

Partnerships (Distribution and SI)

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

We discussed two kinds of partnerships.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Product Positioning

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

For your product positioning, consider the following:

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

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

Proof of Concept

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

Advisors

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

There are three common models for compensating advisers:

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

Conclusion

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

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

Please share your thoughts in the comments section below.

Tweetable tweets

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

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

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

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

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

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

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

02/12/201302/12/2013

iSPIRT invites you to participate in the Indian Software Product Industry Survey

As you know, the Indian software product industry is still in its infancy. Your active involvement is essential to nurture and grow this industry and realize our collective dream of building a product nation.

This survey is the first step towards developing a systematic and accurate understanding of the Indian Software Product Industry landscape. The data from this survey will enable iSPIRT to work effectively with various stakeholders (software product companies, government and venture capital) to build a strong software product ecosystem.

This survey has been developed by iSPIRT in collaboration with Prof. Sharique Hasan and Rembrand Koning of Stanford Graduate School of Business. The data collected will remain confidential and solely with iSPIRT. Any report generated from this data will be on an aggregate basis and individuals and companies will not be named. Should you have any questions about the data or its usage, please reach out to me at vardhini(at)ispirt.in

In this survey, we are asking you to provide basic information about your company, your hiring issues, as well as your funding and ownership structure. You should expect to spend about 20 minutes to complete this survey. We would appreciate that you answer each of the questions in the survey, except for those that are marked optional. We understand your time is valuable and we truly appreciate your participation.

We would be happy to share the survey findings with you. Please participate in the survey online at http://bit.ly/Product_Survey

29/11/201328/11/2013

What is win or loss means in the game of enterpreneurship

I have been interacting with various startup teams over the last several years, predominantly around ideation, product-market fit, funding, scaling, and strategy aspects of the companies. Before I was an investor, I spent a lot of time around product creation with two successful startups in the Silicon Valley and managing business in a large Internet company. In recent times, I have been spending a lot of time on the board of several Indian companies who are starting to scale. Over many years of this engagement with startups, I have come to believe in few things, and one of it is what I call “Rules of the Game”. The sporting analogy is deliberate, as I use it throughout this article.

The Rules of the Game

In India, most of the founders get into their entrepreneurial journey with very little preparation and knowledge. In fact, it looks like most of them jump in based on how their friends have done or the founders in the company they work have done. Some of the serial entrepreneurs are starting to plunge in their second attempt, much more prepared and know a lot more about how the game of entrepreneurship is played. However, most of the entrepreneurs haven’t thought through the rules of this game, especially, the difference between a win, a draw and a loss in the game of entrepreneurship.

What is a win, draw and a loss?

Most of the entrepreneurs start their journey with an intention to solve a problem that they have identified is important and useful. If one has setup a small company with a tiny team, has solved the problem well and has great number of customers, and customers are paying, the game is already looking interesting for you. If you are making profits, and you are paying yourself a market salary, and you are self sufficient with enough room to grow, make no mistake about it, you are winning the game.

If you have raised money, built a great team, an outstanding product, a defensible growing business and you know how to take the company to profitability, and you are geared towards an exit or have already done, you are a role model. This is definitely a BIG win.

On the other hand, you invested time and effort in building the product out, you made attempts to find product-market fit, you learnt how to market, sell, and support customers, hired few good team players, and overall you have done every thing possible. However, you come to know that the business model is not viable and you cannot service customers within the budget. After all fixes to business model, if things don’t change you may decide to shut down and look for your next gig. From my point of view this is definitely a “draw”. It is draw because in the process, you have learnt a lot of things around entrepreneurship; the rules of the game and you come out very strong in your next gig.

A loss is when you are caught in a rut. You have built some sort of a solution, you have few customers, but they are not very happy. You are not able to scale the company as the product-market fit is not yet accomplished and at the same time you have just enough revenues to pay your bills and manage your employees. You know at the bottom of your heart that you can continue the way it is for several years, but you don’t see a big change. This is a classic “loss”.

I’ve always believed that the loss is where you don’t want to be, because of the uncertainty about which direction you need to take. Conversely, a draw can be bounced back from. Everything you’ve learnt and gone through is invaluable. You’ll be a far better entrepreneur the next time around.

But is there a better way to learn, to get the experience of the win, draw, loss without actually playing the game? That would be brilliant, wouldn’t it?

Ideation vs. Execution

Of course there is a better way to learn. In fact, there are reams of startup literature out there; the best of them are free, actually, and your first step should be to read them and read up on your domain as much as you can. In fact, I have even counseled people to do nothing except read for a month before getting into the game. Read interviews of very successful entrepreneurs and grasp around “why” they were successful. What was the context under which these folks operated and how they tuned their operations to be successful against others is a great learning. This knowledge is out there. You just need to take it and apply to your world.

However, most of the time, reading and understanding isn’t going to be enough. Reading about it and executing it are two completely different things. This is where the value of the ecosystem and mentoring becomes very useful. A mentor can take all that knowledge you have imbibed and help you translate it into meaningful, decisive actions in your context. And again, the quality of such mentors matter. A mentor who makes a business out of ‘guiding’ startups is not a mentor. An excellent mentor is very articulate, keen observer, and some one who has gone through their own iterations of their idea, started a company, learnt every thing possible about their customers, and eventually was able to scale the company. Your best bet is to find such mentors and interacting with them is of significant help.

In a fledgling software product ecosystem like ours, finding enough successful mentors to support many of our startups is very tough. This is where, I see the value of efforts like the inaugural #PNCamp. Throwing in just-started practitioners with experienced practitioners and having them help each other is in my view, the best thing that can be done to push the ecosystem to accelerate faster. I am hoping that many other such practitioner lead hangouts happen in the country to boost our eco-system to next orbit.

Looking at the agenda and participants of #PNCamp, it looks like there will be an incredible amount of exchange of practical knowledge among attendees and also bit customized as each session being small (around 20 folks).

If you want to see an example of practitioner-lead-mentor, see the movie “Miracle” based on the real-story of US Olympic ice-hockey team winning against the invincible Russian team. The credit of the win goes to the player who turned coach; Herb Brooks who guides and empowers the team for a win that no one thought was possible.

All the best for the #PNCamp and thanks to Sairam for putting this together.

26/11/201326/11/2013

In Product Management, It’s All About Location, Location, Location!

Over the last few months, while talking to a range of Indian and Global tech companies, I noticed an interesting trend in the determination of location for key functions, specifically product management.

Global MNCs: During conversations over the last few months with some North America based technology MNCs, I observed that a lot of them plan to create product management functions for local markets and ensure better insights by placing the product managers in the local markets. By this, they plan product functionality and global roadmaps accordingly.

Most people who have worked with global MNCs will, time and again, have observed that products are not created for Indian (or emerging) markets. Most product managers continue to design products for their home markets (typically the more mature markets), with limited focus on local market insights.

India Based Product Companies: In a majority of these companies, more so the startups, senior management executives are either based out of, or are relocating to their largest markets (read North America, maybe South East Asia). The logical reason is to be close to the key markets and customers.

The rest of the functions (operations, product management and engineering, service delivery, shared services), continue to be based in India.

And this is where I started thinking about the ideal location for product management.

Typically, Indian product startups focus on building a customer base (and credibility) in India, and once established, extend to more mature and higher revenue markets e.g. North America. As they expand, they locate their sales teams there, but continue to have their product management teams based in India.

Extending the logic of creating products suited for the key markets, shouldn’t product management at Indian product companies be based in the potentially largest markets? The refrain often is that they cannot afford to have product managers based out of the higher cost markets.I recognize that there is no easy solution, and companies choose different approaches to manage this.

Location Options	Typical Company	Advantage	Challenge
Located with Development	About 50-60% of companies, Indian and Global	Ensure that the product development matches product definition	Not enough market exposure for the product managers
Split between Development and Market locations	Taken by SI firms, where the product manager travels specifically for large opportunities	Balance between development and market needs, being an effective bridge	Customer meetings are for closures, not for discovery – thus, not able to really get deep proactive insights into the market
Extended Product Management teams in the market	Taken by about 15% of companies, having an advanced roadmap	Get market feedback and also be able to effectively engage with the development teams	Presales / solution responsibilities are pushed onto local product managers, limiting market feedback and insights
Located in the Market	About 5-10% of companies (mainly Global)	Capture direct and deep market feedback to ensure product truly meets market needs	Limited engagement with the development teams

My belief is that while there may be no one answer, it is fundamentally linked to the stage the company is in, and the ability to effectively capture market feedback into the company’s product management teams.

The Location Matters

For product startups, however, it becomes extremely critical to get the right market insights (on an ongoing basis) so that they can actively differentiate and continue to retain their market edge as compared to some of their better entrenched competitors. Having local market feedback could well be the key differentiator that could help them build and deliver significant value to their customers. And could result in the long term growth and survival. When one evaluates the employee costs of keeping the product management function in the key markets against the opportunity costs, it becomes apparent that the benefits derived can easily justify the investments. However, the choice of the right product manager is also critical, otherwise you may end up getting pre-sales and reactive insights, which is not what the goal is.

Of course, an extreme option could be to follow Dogbert’s advice:

Look forward to your insights on approaches that have worked for product companies across multiple markets.

25/11/201325/11/2013

90 minutes at #PNCamp and the PR Engine cheatcode is yours

“There’s an empty slide in your deck reading user acquisition, which follows the slide showing hockey stick adoption. We’ll grow virally! Three words that fill up the slide nicely. Relying on virality as a standalone source of user acquisition is fatally flawed to begin with.”

That’s Sangeet Paul Choudary at his usual best. He probably said that a hundred times over, yet Startups continue to falter when it comes to understanding user growth and PR. The two are distinct, but underlying is a common trait, that about being remarkable. Have you extracted the remarkable ideas from your product and turned it into a PR opportunity? Or you think you are remarkable and still don’t get noticed?

Meet Sangeet Paul at PNCamp.in as he dissects the PR and Virality code step by step. It’s 90 minutes of pure adrenaline rush as you realize what can now be in your reach.