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My wife forwarded me an article recently that Booz & Co. had written on India’s leadership challenge. You can read the full article here.
This confirmed something I have long suspected. While there are great leaders in the Indian business, there are very few great companies. Let me explain what I mean by that. In the business, we are in, i.e. IT, some companies have done very well financially, and yet, if you talk to employees at the very same companies, you will realize very quickly that folks aren’t happy. That they feel they are under-valued and under-utilized. That they have limited growth opportunities. That they are stuck in a rut. That has made for companies that can execute well, but cannot innovate.
That niggly attrition problem that so plagues the India IT business? Well, guess what, it doesn’t have anything to do with making an extra buck somewhere else. It has everything to do with having equally dreary workplaces that stifle growth. So if one has a choice to make a little more money doing the exact same mind-numbing work, well, that’s what one does. This is not just me talking. Check this out
I can empathize. I’ve been there too.
So what’s the point of this post? After all this is supposed to be a blog about the software product business in India.
The reason I write this is because we have an opportunity to create an eco-system of companies in India that are creative workplaces. Where individuals want to have fun and innovate. If we want world-class innovation out of India it has to start with the work culture. So to that end, I jotted down some thoughts on what we should be consciously thinking about.
Money is only a motivator in the short-term – Many companies believe, IMO incorrectly, that giving people great compensation is more than enough. This thinking is especially prevalent in sales groups within companies. While you have to compensate your employees adequately and at wages that are competitive, money is really not a great motivator. And if this is the only carrot you have, there is nothing stopping your best employees from seeking greener (more carroty) pastures.
MBAs are great managers(leaders), NOT – Many years back, just starting out in the workplace, there was a clear hierarchy in new hires. There were the MBAs (preferably from IIMs) at the top of the heap, then there were the engineers (preferably from IITs) in the middle, and then were MCAs. The MBAs were fast tracked on to management roles whereas the rest of the people were expected to be the worker bees. That is a ridiculous way to build an organization. Many years later, the thinking persists and the results are evident. A degree does not make a great manager. Empathy and interpersonal skills, among other things, do.
Doing a job well is not a predictor of management/leadership talent – I have seen this many times in my work life. In one particular instance, a person who was a fabulous individual contributor was an exceptionally bad team player. Well, he was elevated to a very senior position because of the fantastic work he had done as an individual contributor. I have lost touch with him so I don’t know how he fared. He is a very smart individual so I assume he figured things out but the company had done no favors to him or the company, by not grooming him for that role.
Just some thoughts on a topic I feel strongly about. I keep hearing of all the fabulous things that are happening in the Indian product eco-system and I am excited about that. But we must always be aware of the cultural baggage we come with. And the cultural baggage has a strong authoritarian component to it. Where commands are given and dissent is not tolerated. If we want to build a generation of leaders that can spawn multiple companies doing innovative work, this needs to change.
But all is not doom and gloom. Things are changing. One of my clients, Moonraft Innovation Labs, a UX design shop out of Bangalore has created a relaxed work environment to foster creativity. Titles are fluid, no assigned seating and an entire floor devoted to artsy endeavors. The quality of work they are putting out shows their approach is working. This is just one example. I am sure there are many more. The objective should be to drive the old command-and-control structure into extinction.
Agree. Disagree. Or have another viewpoint. Would love to hear your thoughts.
Aurus Network was founded in 2010 with the vision to make quality education accessible to masses at affordable prices. It is revolutionizing the way distance/online education is delivered. Aurus offers CourseHub, its flagship product, which is a cloud-based solution for educational institutions (higher education, test prep and training,schools, etc.) to capture, store and deliver (live or on-demand) lectures online. The company has been funded by Indian Angel Networks and is the recipient of Microsoft Bizspark 2012 Startup Challenge in cloud category. This is a review of their flagship product CourseHub and the company.
Introduction
When I was in college and bunked classes (which was fairly often; it was hard to get up for 8 am classes), what usually got me through the course were the notes photocopied from one of the studious guys of the class. It was not the best solution, but was good enough. Then, in my 3rd year, my college introduced a special studio classroom where one of the course professors used to hold his lectures – a sound-proof, sanitized room where the professor used to write on a paper with marker which would show up on screen for us, and for recording. The recording was supposed to be available as a bunch of video cassettes (yes, I am that old!) in the library. It was painful to attend these classes because they felt so unlike a classroom, and of course, it was too complex to watch these recordings so I never watched any, and photocopied notes continued to save the day.
I was 15 years too early! If it was 2013, I probably would be sitting in a regular classroom whose lectures were being recorded, and recordings were available right after the class, on my course portal online, in an easy-to-consume format on the various devices I own. Recorded (and indexed) lectures would allow me to have lectures-on-demand, which is so cool.
This is what Aurus Network offers through its flagship product CourseHub. It is a cloud-based solution for educational institutions (higher education, test prep and training schools, etc.) to capture, store and deliver (live or on-demand) lectures online. CourseHub is also offered to corporates to manage remote training sessions and schools for capturing their classes.
There are 3 primary usage scenarios for CourseHub:
Lecture Capture: A lecturer captures his/her lecture for offline viewing by students or for creating blended learning content (for MOOC or other delivery mechanisms).
Self-paced learning: A lecturer’s class is recorded to be viewed later by students to allow them to review the content at their own pace. Lecturer can edit the video and add pop quizzes and assessments online. This is usually used by universities.
Extend the classroom: In this scenario, a lecturer’s class is streamed in real-time to remotely located classrooms or students. This allows the lecturer to have a very large classroom and have it closer to where the students are, without spending time in physical travel or money to build a single-location large classroom. This is usually used by training and test preparation centers.
For all of these scenarios to work, the capture device needs to be set up in a studio or classroom, which is a 1-time activity. This is typically done with a server class machine connected to internet via high speed broadband connection (higher the speed, better is the quality of video streamed and stored) and a capture device (HD camera and microphone) connected to the machine.
Development
The product was conceptualized in Nov 2010 in response to the problem posed by their first client. Their V1 was released in Nov 2010 and V2 in Feb 2011 with the first deployment and roll-out to 10 centers across India. Their tech team comprises of about 10 people, who are working on various technologies like video compression, video streaming, computer vision, large scale load balancing and engaging front end technologies.
Most of the innovation in the product has been achieved by applying technically simple but important insights about customer behavior and preferences. For e.g., one of the USPs of the solution is that they are able to deliver almost HD quality videos at as low as 200 Kbps, while other conventional solutions (web conferencing, video conferencing) require atleast 1 Mbps or more for the same. This has been achieved by prioritizing the encoding parameters which matter more for the viewer while watching educational videos (like clear audio, sharp writing etc.) rather than doing a one-size fits all kind of video encoding.
Features
Some of the product features are as follows:
Record video with any HD camera and microphone
Enable automatic focusing on teacher with Intelligent software based tracker
Teachers can teach in their natural style
Schedule captures in advance
Automatic archiving to create media library in the cloud
Integration with client’s website
Integration with Learning Management Systems like Moodle, Blackboard, etc.
Differentiators
There are a few standout features in the product which are well worth the mention:
They can deliver HD video quality at 200Kbps, which makes this available to all students who have a broadband connection. Other solutions use much higher bandwidth (around 1 Mbps in some cases). The reason they are able to do this is because they can optimize their compression algorithms using their knowledge of what is important for students (clear audio and writing is much more important than clearly visible instructor for example).
No human intervention is required (after initial setup) to capture, store and deliver lectures, they have fully automated the solution (including tracking the presenter, managing connectivity disruption, etc.).
It is a cloud-based solution, so clients can try out their solution without any hardware setup.
Aurus provides a home-grown Learning and Content Management System which allows their clients to manage users and lecturers, edit video lectures, and add quizzes and assessments to the videos. This means that the clients get a complete product.
Market Adoption
Typical market for CourseHub in India are test preparation and training institutes like Career Point, Career Launcher, etc. and universities. CourseHub is sold on a monthly/yearly subscription model, for example Rs. 20K a month can get you 500 hours of lecture time (1 lecture + 99 students in a 1-hour lecture will constitute 100 hours of lecture time) and 50GB of storage (500 hours will fit into 50GB). However, for someone in the market for such a solution, there are many options to choose from:
VSAT based classrooms (Hughes is the biggest player) – These are expensive to set up and require dedicated hardware, but offer highly reliable infrastructure
Internet-based classrooms (like Aurus) – Some of these require expensive studio setup, while others, like Aurus, can work with regular hardware.
Ad-hoc systems: You can use youtube (or other video streaming sites), Google Hangouts and some local capture method to enable a large part of functionality of capture, store and distribute, and save some money. Operational hassle will be larger.
No system: this is still not a critical need for educational institutes and a large number of these institutes just don’t have any solution in place.
For all these solutions, technology is an important piece, but so is the overall package (that includes setup, operations, essentially IT-free solution), since the clients are not likely to be tech-savvy enough to manage these technological solutions.
Currently, Aurus is the technology solution provider of type #2 – allowing their clients to create internet-based classrooms. They have about 30 clients out of which around 20 are actively using their system. They have a healthy pipeline of future deals, sales cycle tends to be long and seasonal (because of academic session dependency).
The Roadmap
With the goals of capturing more clients in India in different segments (Corporate, Training and Test Prep, Schools) and also expanding outside India, Aurus has an ambition pipeline of features and innovations.
Product Roadmap
Over next 12 months or so, Aurus intends to deliver the following to its clients:
Launching a completely Do-It-Yourself version of CourseHub, which will allow institutes based out of India to use the product
Launching more features to allow professors/trainers to effectively analyze student performance and take pro-active actions
For professors, adding multiple ways to lecture capture in their classrooms – using a dedicated capture appliance, an android app or manual uploading
Technology Roadmap
Aurus hopes to deliver following technology enhancements in this period:
Enhanced Capture – Enhance and decouple capture process from software so that the solution can work with any kind of capture device and hence can allow them to go global. This includes allowing the use of high-end camera (which ship with Android OS) and remotely controlling it from server through an Android app.
Deep LMS integration – Current LMS integrations are very shallow since it uses LTI. Deeper LMS integrations will enable more complex use cases to be supported.
API solution – Allowing API level access to the video catalog to enable integration into client’s portal will allow CourseHub to be more tightly integrate with client portals.
Competitive Landscape
Companies offering such a solution (capture, store and distribute – live or on-demand) are very hot in US. Echo360 is a Steve Case backed venture that focuses purely on universities and offers socializing the learning (learn in groups and collaborate using social tools) and flipping the classroom (use classroom to discuss and clarify doubts rather than lecturing). Sonic Foundry is a public company, and Tegrity is a McGraw Hill company, both offering solution similar to CourseHub.
One of the reasons for this space being hot is the fact that flipping the classroom is becoming the craze, and with MOOC (Massively Open Online Course) also being the next big thing; capture, store and distribute of video lectures suddenly seems like a key technology piece to allow everyone to offer a MOOC.
In India, it is still early days for flipping classrooms and offering MOOCs. CourseHub is primarily being used to extend the classroom, and make star lecturers available in remote classrooms, in addition to using it for self-paced learning by making recorded lectures available for later viewing. However, as Indian universities catch up to these concepts, Aurus seems to be well-positioned to be a leader in the space if it plays its cards well.
The Road Ahead
If I have to go to college again, I will probably bunk again (while managing the attendances somehow since they are mandatory now). When I do so, I will probably still go for photocopied notes because they are so brief and quick to go through. I would really love to look up appropriate pieces of short video clips of the lecture when I get stuck in the notes so having notes and videos cross-indexed will be so useful; also useful will be the ability to find other lectures on the same micro-topic and try to really understand it from different perspectives. Essentially, videos become any other type of content which can be searched, used and mashed up together to create learning assets that are reusable and easily consumable.
Aurus is a pure technology provider in education space. It becomes apparent when you go through their solutions, their brochure, or the cool features they showcase on their website – they are technology-heavy. However, education sector doesn’t yield itself well to pure technology players, primarily because technology is hard to use, and very few institutes have technical/IT teams on their rolls. So what they need is complete solution (including service, personnel, etc.) so that it becomes plug-and-play for them. Aurus needs to be on top of its clients’ complete technology needs and should be willing to offer various value-added services.
Blended learning holds lots of potential, be it universities, training institutes, corporates or schools. Aurus seems to be well poised to help them deliver on this promise through technology.
Being an Associate in a Venture Capital firm is a dead-end job*, that you can’t leap without entrepreneurial experience. And, entrepreneurs hate you for your pesky, clueless mails. Here’s hoping to help you out – and help ourselves.
Dear Associate / Analyst,
I know I took a big stab at you [1] and went public with it. I know you are trying to do your job, but the way you are going about it right now sucks big time. If you are wasting the time of an entrepreneur – and especially one in my fold and care [2] – well, you can expect more coming your way.
That said, I know its pointless to be critical instead of being helpful. So here are some tips to be awesome at what you do:
1. Introduce yourself with your title
You represent the firm, but what you do there will set expectations right with the entrepreneurs. Most Firms have a lousy habit of not even updating their current website and partner list, so an Introduction that says “Hi, I am So-and-so, an Associate with XYZ firm and I work closely with Partner Mr. X on Deals related to a,b,c sectors” would make it a better intro.
2. Be Clear
Please do not make claims about funding and all – Try very very hard not to set false hopes. We know the power you have is only to get names in a pipeline. Not even the principals have power to make that claim [3], so be very clear why you are reaching out to a startup – “To get the startup in your list of startups to watch” aka the dealflow pipeline. Entrepreneurs are racing against all the odds set against them, letting them know that this is a relationship building excercise, not a funding excercise, will also give them the opportunity to prioritize accordingly.
3. Think twice, thrice before asking teams to work on a document
I have met startups who sit and slog making market projections and research – well, thats kinda your job, isnt it? – and in trying to make business plans with five year projections.
Hint: the startup still doesn’t have a product, they don’t have a customer and they don’t know who might pay for it. That’s a hell of a lot of variables, and what you are asking them to produce is nothing short of writing fiction. Let us do more realism and less fiction, please?
4. Be hands on.
And by that we mean, be useful. If you love tech, what we really really lack in India (and globally) are guys who can look at a product and give feedback. If you sign up, give the product a try, recommend it to a few users, get them to try and send the team an email with genuine usability, functionality and customer feedback, guess what? its two birds in one stone – you don’t have to ask questions about who uses the product anymore because tada! you yourself know, and you also get on the good side of startups and the advisors / accelerators who are helping them.
5. Can you get them customers?
If you are talking to a startup that has its beta / product launched, can you push it internally within your team and your portfolio and get them to adopt it? You might have to build a system where your portfolio entrepreneurs get a single point/vote in the companies you are looking at (Tell them Y Combinator does stuff like that, internally to sell it) – which helps in two ways;
a) You get an entrepreneur’s perspective that can really help startups and
b) if they are solving a real problem, they might get paying customers.
6. Add Meaningful Value.
You know that there are only four defined roles in a VC firm, and you are at a dead end job if you are not an entrepreneur because its not easy becoming a partner, climbing up the associate route. You know what will put you up there? Proving that you can work with entrepreneurs and can be the second mind (head). So be selfish. I have been blown away by the value add some of the associates and principals like Anshoo of Lightspeed, Anand Daniel of Accel do for companies (in India) – so much so that I ask teams to talk to them. See, how it works?
All of this gets you on the good books of entrepreneurs, startups and folks like me. If you are an awesome associate/analyst, I’d love to meet you sometime and lets do this work together. We are all on the same side of the table. [4]
Do Entrepreneurs really Care? Here’s a requote of a quote from Kris Nair’s blogpost [5], of Sampad from Instamojo [6]:
I hardly see an investor saying that:
Hey, I used your product and it’s awesome / awful / sucked etc and I think you can do this or that from his/her experience which can help the founder achieve little bit more on reach, retention or revenue metric of the company.
You know where to start to build moat – almost always it starts with what most others wouldn’t care doing or looking at. Be an awesome associate – don’t suck.
Pixel Jobs, designed by the talented folks at Sparklin, is a refreshing look at the boring world of job portals. The problem to solve was simply, “How to get a job post seen by the best creative talent?” An old fashion job-board served as a physical metaphor to yield a clean, simple and inviting job portal cheekily named – Pixel Jobs. It has nifty filters to make searching easy and a straightforward form that allows you post a job in a few minutes.
On April 3rd, Avinash and I had freewheeling chat with the young founders of Team Sparklin – Gurpreet Bedi and Himanshu Khanna – on the hows and whys behind the product.
How did it all began? Are you trying to become Cleartrip for the job space?
“Pixel Jobs really started based on internal need of hiring the best designers. Sparklin started a Facebook group last year to reach out to the designers through personal networks and within a short time close to 1200 people had signed up. That clearly indicated a need for a specialized job site for designers. There are already sites for coders, so why not for designers. This is purely a niche product,” on the why.
“There was a concern on excessive moderating to ensure the postings to be creatively-relevant and accurate. I had to overly moderate the Facebook group for the first couple of months. But then everything kind of fell in line. The relevancy and quality of postings sort of improved on their own. Very little moderation was required. That’s when an open job forum became a viable next step. We still moderate but only for completeness.”
So what is the initial marketing strategy?
“We have deliberately taken a slow approach towards marketing this portal. First, we want to ensure that the platform is robust enough to handle large volumes. Second, by only allowing a selected well-known companies in the creative domain to post (for now) will increase the quality and credibility enough to not warrant a serious marketing push,” elaborating on the initial word of mouth approach.
How is the product going to evolve over next few months? Semantic search, LinkedIn connect, company-based hosting, additional views, etc. are some gaps.
“This is only a version 0. We are improving the product on a daily basis. All these features and many more are in the pipeline and you will see a gradual improvement over next few months. For instance we are working on an Android app to launched soon and targeting companies to use Pixel Jobs to host jobs on their sites. They can just use our embed our code with their branding on their site. There is a big need for this. For example, some of our clients already have a job board on their site but prefer to here.”
Even though the initial version is impressive, there are some user experience improvements to consider. For instance, extending the card metaphor by not going to the next page for a more fluid interaction (too many new windows), introducing category tags as alternate searching mechanism (search only for graphic designers), making search more central to the experience, introduce shared vocabulary (minimal difference between UX Designer and UI Designer), personalizing content based on previous searches and making it easy to follow-up on interesting jobs.
“We agree with all these points. Most of these are being worked on currently. For example, in the Android app you can favourite your job and city. Only those jobs will then be shown by default. These will help personalize your experience. Easier to do this on Android for now and eventually we will introduce them on the web as well.”
How do you plan to distinguish the experience between job seekers and posters?
“This will be a very important strategy once we build some traction and gain volume. For now the obvious focus is job seekers which will help drive better companies to the portal.”
Why is there a disconnect between brand Pixel Jobs and the URL (jobs.pixelonomics.com)? This could split the brand between Pixel Jobs and Pixelonomics. Better to build a single brand for consistent messaging.
Without elaborating on this too much, “We will merge these very shortly under a new brand name in the next release. We could also launch series of boards across other verticals as well – mobile developers, etc. under the same brand.”
It will be hard for the creatives to search on cluttered and difficult to use popular job sites from now on.
When you see Yahoo offer $1.1B in cash for Tumblr or it pays $30M for Summly, the reactions around the world range from kudos to the founders and initial investors, to “I’ll have some of what they are smoking”! But most of the time, there is some sanity behind all that madness but there have been times when it has been more of insanity as at the peak of the Dot.com boom, in the early 2000’s. The question is a confounding, personal one, whether it’s your start-up company that you are trying to value, or considering investing in one. Company valuations are usually a science when it is a mature company with products already in the market, with revenues and profits. It moves more to the Art side of the continuum, the more early stage, the start-up is. It is different if you are consumer or enterprise focused, pre-revenue or post, traditional software model or SaaS based. It is better to be armed with a toolkitof various valuation approaches, picking and choosing what may apply in a specific situation. Typically valuations could be arrived at as a cumulative of various components all added up together as appropriate. Some of the approaches that make up this toolkit, when and where they may be applicable, are:
a. Asset Valuation: If the company has a product and is making revenues already, the current contracts, and those close to signing, may have their own value and these need to be added up to the revenues and hence, the value of the company. The cost to replace existing assets can also be used to add to the valuation, especially inacqui-hire kinds of situations – where a company buys another company for its engineers and talent, rather than the products themselves. This may be of special interest in start-ups based in India. How much time and effort would it take for another company to assemble the talent and experiences the employees of your company may represent? In the simplest case you can add up all the recruitment expenses for assembling the talent you have over the years adding a premium for the time-value of the whole thing!
b. Similar Company Comparisons: There is nothing like comparables with recent valuations of companies similar to yours, in business model and stage of development. Other companies that have received funding recently may be good justifications for your own valuations. This is why networking not just with VCs and Angels but also fellow startup company founders and chief executives is important. They should feel comfortable enough with you to share this kind of highly confidential information with you! Think about it!
c. Market Size and Growth Potential: For those that think “why should Tumblr be valued at $1.1B”, have you looked at the first year revenues of Google and Facebook? In no other industry would you see companies go from $0 to $1B in as short a time as some of these companies with just ad revenues! Traditional brick and mortar companies would take decades to reach this level of revenues! According to Yahoo!’s May 20 letter to shareholders, Tumblr site has 300 million active monthly users, meaning, Yahoo! is paying around $3 per user, while Facebook paid around $30 per Instagram user; apparently Yahoo! is doing a good deal. So as this article on The Motley Fool says, it’s all about traffic, stupid! Eyeballs may not be dead if you can make it work still, although it will be harder these days! This is where we may want to think about the advantages of going global vs going for the Indian market alone! The Indian Smartphone Market has grown from 4% growth to 6% growth from 2012 to 2013! So it may may still make sense to focus on the Global consumer smartphone market instead of the Indian market alone if you want to grow fast! But the SMB market in India seems to be large already and growing at a reasonable rate! So if your startup is focusing on the Indian SMB market, market, more power to you!
d. Intellectual Property, Barriers to Entry and Ecosystem Building Potential: Think about Microsoft SQL server or The Oracle Database Management system. Think about the millions of people around the globe that make a living out of these ecosystems – providing skills in these products, skills in the applications built around these products, having jobs around the globe with companies that use these products and applications built around them. Those are ecosystems! These are worth trillions of dollars just around the ecosystem building potential of these! Google and facebook are in the process of building their own ecosystems now. If your Intellectual Property is anything like this, you may want to increase your valuations proportionately. What barriers to entry have you built around your technology? What prevents any tom, dick and harry from replicating what you do? If that’s solid, it’s worth a lot of money and you can confidently reflect that in your valuation and articulate the same to your investors. Here’s a link that explains different kinds of ecosystems you can build!
e. Income Valuation Approaches: If your start-up already has revenues and profits, the Income Valuation approach may be used to arrive at the income component of the valuation. The usual methods used are Discounted Cash Flow (DCF)methods. At their essential simplicity, they are estimating future revenues and profits and arriving at the Discounted Present Value of those profits given an interest rate. For example, if you are projecting profits of $100, $150 and $300 at the end of years 3, 4 and 5, what are their current values? What amounts today if invested at say 8% would yield incomes of $100, $150 and $300 in years 3,4 and 5?, You add those profit values as of today and calculate valuations based on those! Usually Earnings Before Interest, Depreciation and Taxes (EBITDA) are used instead of Net Profits since EBITDA reflects much more accurately the exact earnings potential of your startup!You can also use some rough rules of thumb for valuations based on sales – Horizontal Software between 1.35x and 2.1x. Vertical Software from 1.4x to 2.1x. Consumer Software a bit lower, 0.5x to a just under 1x sales. Infrastructure – 1.5x to 2.5x sales. Internet and Software is 2.19x to 2.7x. IT Services, which is people intensive, is lower, 0.6x to 0.74x. The actual numbers don’t matter as much as the difference in how different kinds of startup companies are valued, in relation to each other and why.
f. Scarcity Premiums: The basic principles of Economics – Demand and Supply may apply to startup company valuations, just as well. If too many investors are chasing after a limited number of shares available in a start-up company, the valuation goes up! This is the reason you need to create an imbalance between investors interested in your company and the number of investors and the money you are willing to take in – creating a scarcity! This is also the reason you need to start build as big a network of investors way before you need them to invest in you! You expand your demand way ahead of time! However, Scarcity Premiums can come back to bite you in your next round of investments if you have oversold your value and cannot meet your revenue, profit or product development goals before the next round. Down rounds are no fun! If you raise this round at a high valuation and the next round is a down round, your company may be perceived as a failure. That’s why you need to be careful about taking money at higher valuations, even if you could!
As a start up company, you owe it to yourself to take a systematic approach to valuing your own company and conveying your logic to your investors if they ask for it. In the worst case, experienced investors may choose the methodology that gives you the worst valuation and you can be ready with your own bargaining position with careful, considered logic and a better valuation!
Price is what you pay. Value is what you get. – Warren Buffett
Manav Garg’s career exemplifies the statement “where there is big risk, there is big reward”. Throwing up a lucrative, six-figure plus salary and bonus as a commodities trader to start a software company that would build a commodities trading product required guts. Manav took it in his stride and today has built a world-class company that competes globally with its commodities trading software. He’s also built a company – EKA Software – that is domain driven and highly customer centric. In this interview with ProductNation, Manav talks about the origins of his company and some key factors that went into building it.
You began a career in trading commodities. So when and how did you foray into the software industry?
Yes, I am not a techie. I used to trade commodities enjoying import and export for a firm in Mumbai. But during this time, I saw a need for software for commodity trading. So, I spent more almost 24 months meeting with customers as a trader, trying to understand how to fill the gap and how systems would be a boon to traders like me. Since I have no background in software, I researched for a year on the requirements of the commodity trading industry, how it works, how to install a system for a particular pain point. I moved to Bangalore, and set up shop, hired people and started out, spending almost 50% of my time meeting and talking to people on the benefits they would get from the software. This was how I educated myself about software.
So you are saying that your entrepreneurial spirit was lit by your ability to identify an opportunity. While there are opportunities everywhere, the main point is you need to have the guts to take a risk, and the research to back it to believe that the opportunity can be translated into business success.
Obviously, in my experience this is exactly what happened — careful research combined with my intuition that this opportunity will be a success. Many times too much research is done with no action. I do not believe in market reports. I believe that research and study done by yourself and through interaction with customers and feel of the market is what will make your product a success.
How do you identify customers and ensure that they will give you the right picture while your product is being built?
Since I was in touch with customers for 24 months before starting the business, it was easy to contact them. It is important to know how to convey the right message to your customers, tell them about the kind of solutions you are proposing. Moreover, if you are connected on LinkedIn through your professional contacts and friends, you can easily connect with customers.
I don’t think it’s a big a challenge to identify customers. I think the biggest challenge is the right approach. I recall when I contacted people whom I have known for at least five years, be it in Hamburg or Amsterdam, we were able to relate because they felt that I understood their pain points and were confident that I would bring to the table valuable solutions.
So your next step was to build the team. So how did you form the right team, especially the founding team?
You must be passionate about your product because then you can speak with conviction about the advantages of your product.
When I started, I used the personal contacts route. At that time, I did not know anybody in the IT sales or products fields. All that I was confident about was that Bangalore is a good place to do business in the IT field. I met people, worked with them for some time, and they helped me understand how the whole industry works.
For product development, I also reached for professional assistance to some of the larger technology MNCs who had more experienced talent. Since I did not have a software background, I decided to concentrate on sales from inception.
For any start-up I think it is very important to decide from an early stage as to what is the main driver in the business. If you are doing business applications then sales is key driver, if you are doing online sales then marketing will be the key driver and if you are making tech based products then technology is the key driver here. But if it is very important to identify the key driver that will then help decide the skill set of the team.
Today, what would you say are the key things that differentiate EKA in the market?
For many years, people have been trading in rice, sugar, wheat and metals. It is important to have a good supply chain to manage this trading. And for this you need excellent software that simplifies the supply chain. This was the challenge as a trader I was trying to overcome. We basically cover that need in EKA today.
A lot of our competition, mainly in the US, is focused on crude oil, gas, trading industry. We were the first one to focus on the commodities industry and therefore had an edge in the market. We carved a niche for ourselves.
Please share with newer entrepreneurs the learning’s that you have had over last five years, especially amidst the challenges you and other emerging companies in India face?
The biggest challenge is putting together the right sales team. The product might be good, but it is the taking of it to the market that will bear fruit. You also need an efficient global online distribution model. Another serious issue is how to retain employees. How do you convince people that your product is here to stay for a long time and not just a couple of years. Emerging companies need to convince employees that their products are not fly by night, but bring value to customers and, thereby, employees over a longer span of time.
These are exciting times for us in the Indian software products industry. The air is pregnant with cautious, yet very strong optimism that some truly great product companies will emerge out of India in the coming years. There is a significant shift in the mindset of Indian entrepreneurs, with a focus now on building great products and not just good enough products. A talent pool of highly qualified and experienced professionals who have worked with MNCs across various functions and roles is now available. The support system has also gotten stronger with more angel investors, accelerators and incubators, focused events and meetups with founders, entrepreneurs and experienced professionals coming together, sharing their knowledge and helping each other. Entrepreneurs now have more exposure to the Valley and other innovation hotbeds and international markets by virtue of their interaction and participation with accelerators, investors and entrepreneurs outside of India. More importantly, we already have examples of successful Indian product companies that have built products for the world and are now well-established names in their businesses.
I’ve stated this earlier as well, that it is my firm belief that the software product industry will lift India out of its poverty. While I strongly believe we’re firmly on track to make the prediction come true, I would also like to strike a note of caution. Having been in the industry for close to 25 years new wearing multiple hats and seen it evolve, there are some observations I would like to share with the readers.
Rome wasn’t built in a day. It’s probably the most cliched phrase, but I think it makes sense repeating the cliche once more in the current context. As entrepreneurs and investors, it is indeed important that we celebrate key wins and milestones like funding, new hires, entry into new markets etc. However, we also need look at the larger, long time picture and focus on what is needed to build a meaningfully successful company, a company that creates value for all the stakeholders – founders, employees, investors and most importantly the customers. And it is that part, of envisaging the larger picture and actually painting it, which is a true test of one’s faith in their core beliefs, their endurance and perseverance.
It is said that dramatic changes happen in a dog’s lifetime. Dogs usually live between 10-15 years on an average, and if they were to follow technology they’d be witnesses to some incredible and eventful happenings. Ten years maybe doesn’t seem like too long a time for us humans, but I were to borrow from the tagline of a very popular coffee chain, a lot can happen in ten years! Rewind ten years to this day, and this is what we would be looking at. Facebook, Groupon, Zynga did not exist. Google’s AdSense & LinkedIn were just about to be launched. On the mobile side, Nokia was the largest vendor of mobile phones and Samsung hadn’t introduced mobiles phones in India yet. Seeds of iOS and Android had probably just been sown in the minds of their creators. In the fast-paced world we live in, it’s very easy to miss how much can happen in what now seems like a short period of ten years. But if you take a step back and notice each of the happenings, you’ll realise how impactful and significant these changes are.
The observations and insights from the points mentioned above hold a lot of meaning for us in the Indian software product industry. While it’s very natural and fair to expect things to move quicker, people to be smarter, government and regulators be more friendly, investors be less risk-averse and so on, but it is also important to remember that magic doesn’t happen overnight. However, small wins and milestones added up over time will see your product and your company achieve something significant over time. Moreover, as an entrepreneur, you’ll need to believe in non-linear growth and that there’ll always be a point from where your growth will take off and go the hockey stick way. Remember, that Angry Birds was Rovio’s 52nd game and they were almost bankrupt at the time they released Angry Birds. What if they had given up after their 50th game? Of course I believe in overnight success, and the only overnight success is getting a good night’s sleep! For all other kinds of overnight success, there are miles to go before one sleeps!
I’m reminded of a tagline that Timex watches had for a long time. (A Timex watch)…takes a licking, but keeps on ticking. That’s some inspiration for us entrepreneurs there! I’ll leave you with some vintage Timex commercials. Hope you enjoy them.
In the last 2-3 years there have been well designed products coming out of the NCR startup ecosystem. Mettl, Visual Website Optimizer, Paytm, and Oogwave, especially come to mind where Design Thinking has been an integral part of the product development process, and not an after thought by giving it just a cosmetic veneer.
There is a noticeable increase in design sensibility while attending various Meetups and pitching design services to startups. However, there is still a gap in how to make it happen. In other words, how do startups and product managers cover the distance between thinking of design and making it actually happen.
Please join us for our launch session this Saturday (May 18th) at the MakeMyTrip office. There will be a talk by Mettl founder, Tonmoy Shinghal, followed up a 3-hour workshop on how to practice Design Thinking in your company by Devika Ganapathy of Anagram Research. Not to mention plenty of networking opportunities during coffee breaks and lunch. Please check out the details and register soon (only 30 participants).
Redbox rents DVDs, Blu-Ray Discs and family video games in US and Canada. Redbox kiosks are found in 34,600 locations and are fully automated video rental kiosks! More than anything else I love using them because they carry the latest titles, are affordable and make me happy every time I do business with them! In my experience I have not seen a better example of INTEGRATED user experience design between their physical kiosks, their online presence, email, their mobile interactions and their social media activities. It seems to work as one single entity, seamless, with the same ease of use and brand identity throughout! Everything is so simple and easy to use, from the Kiosk interface to their website to their mobile apps! Let me explain!
First thing about Redbox is the name of the company and the color of the kiosk – a red boxand you can locate them anywhere. They are mostly everywhere in all major towns! Great branding start! Win#1!
Next to the box is a display showing all the latest titles that can be borrowed from the Redbox. You don’t need to wade through screens and screens of titles on the display. Many of these are outdoors and in the glare of the sun – hard to see the display clearly with that. At the top of the box are pictures of the 6 latest titles for your quick glance. Look to the right and you get an idea of other recent titles! DVDs and Blu Ray discs usually get released on Tuesdays and so I am guessing that the person who comes to load up these titles into every kiosk updates these pictures also in addition to servicing these machines. Love the way they have used physical simple displays to augment their electronic one! Win#2!
You don’t need to go all the way to a kiosk to make sure a movie is reserved for you. You can do it online and go pick it up from a kiosk. It will be held for exactly one day and then released if you don’t and charged a day’s rental since they are holding it for you. Plus you can return a DVD in any red box, even 1000 miles away!Win#3!
I love the way the same Brand Identity persists through the website. I can browse through what is available on kiosks near me without logging in! No need for them to have me log in till I find something and then you have a transaction to complete and you can log in! I love the way they postpone identifying the customer in a kiosk or online till there is a need to. I don’t feel rushed and i browse through movies without having to identify myself first, They make it easy for me and I love it! Win#4!
Based on your address and zip code, or just zip code it shows you locations by address and on a map next to it! Win#5!
While browsing by location of the kiosk, they show movies that are available in the Kiosk, new movies first, older movies next, DVD and Blu-Ray versions of the same movie next to each other. If you select a Blu Ray movie, an helpful window pops up to confirm that you do have a Blu-ray player. Many people may not have upgraded from a DVD player to a Blu Ray player and this is thoughtful! If a movie is available but not at that kiosk a label “Nearby” pops up and allows you to search other nearby kiosks and reserve them . Helpful to me and clever cross-selling! Win#6!
Whatever you can do online you can also do on a SmartPhone interface except now it can know your current location and show you the nearest kiosks. In addition, you can do everything you did online from a smartphone also. Here are some screen shots from their iPhone interface! Same look and feel, all the same functionality! Win#7!
They have also integrated their SMS promotions very well. You could sign up to get promocodes for discounts on rentals they send out, mostly on Fridays. The thing I like about them is their including a way to get off these messages in every message they send out! Also, unlike most other businesses, they are flexible and not rigid about the conditions under which they redeem these promocodes. I once got a promocode good for two rentals. Just to see how they have set it up I tried to redeem it on one rental. It still worked! I loved the thinking behind this – as long as I am interested in only one rental, allow the same discount for two on just one rental! Win#8!
The Kiosk, Online and SmartPhone presences are incredibly integrated with email! If I make a reservation, check out a movie from a kiosk or return a movie resulting in a charge on my credit card and a receipt, they send out email confirmations every time! And again I love the way they send emails for all stages of a transaction and maintain the same brand identity in the emails they send!Win#9!
Now a little bit about some little things they thought about.The DVDs and Blu Ray Discs have an identifying barcode printed in the small circle around the center of the disc. How does the Kiosk know that you have returned a copy of Ironman 2 and not some other random disc? This is how they do it – the kiosk reads the barcode and confirms that it is the Ironman 2 disc you have returned. That means that you can insert the disc in its sleeve only one way facing the reader inside! No problem! They have a large ARROW on one side of the sleeve and that matches a similar large ARROW in the kiosk! Win#10!
Now on to their activities on Social Media – Their way of engaging people on social media is also impressive. Here are some examples of interesting ways they engage people who like their page! I like the way they call their community activities “Outside the Box” keeping with the Box theme! Win#11!
There are many more little things that Redbox does well. Very recently, they are also getting to streaming movies online and that seems to be nicely integrated with their Kiosk/DVD business as well as you can see from their free trial page from this RedboxInstant page! DVDs and Blu Rays will go the way of the do-do sometime in the next few years and Redbox seems to be getting ready to cannibalize their own physical business transitioning into a purely electronic one! Great strategy! Win#12!
There are a hundred other small things that Redbox does well for the user! They seem to have tested these things from a users’ perspective and fixed many things in the process. They are a great example of thinking about things from a user’s perspective and designing things backwards from it! I am also positive that they would have tested these extensively! This kind of dog food is not possible without redbox employees or designers eating it themselves at some point in time!
Fine example of integrating physical and virtual user experiences with very well thought out approaches to call to action, marketing and respect for the customer!
For sure big fish can get you more meat but there also less number of those in that deep blue sea. Pound for pound, the fisherman still prefers to cast the net with small holes – getting easy food in copious amount.
Unfortunately the fisherman logic is somewhat lost to a vast majority of the enterprise companies in the world. India is home of a vast and complex array of small business. If you could catch them – the results will be equally copious. Let’s look closely at the small business owners:
Bigger businesses have more power. You may be able to get more revenue from them but making real bottom line – the profits will not be easy. Look at the example of telecom operator dealings with Mobile VAS companies. For every rupee received from the customers, mobile operators were able to keep 80 paisa while giving only 20 paisa to the original creators of the product.
Small businesses are actually big business before they actually became big. You catch them young if you can get them. And they will be loyal to you as they grow because you are so deeply ingrained with them.
With small business you have access to unpaid product managers. Think about the amount and quality of the feedback directly from CEO and founders of the small business you get. Those feedbacks are incredibly useful and can form the basis of amazing leaps in the value of your product. The best of all – it is all free.
Now that you happy and all gung-ho on reaching to cast the net, let me also talk about a bit about the stumbling blocks. Like everything in life, the benefits do not come easy. You have be careful about multiple when you are trying to sell to small business:
Selling to small business is the deal between you and the director of the company. It requires face to face meetings and real conversations. The trust does not come easy. This means, you have to spend your own personal time with the sales.
Small businesses today are on social media. Social media is very inexpensive way to reach to your target markets. You got to learn how to use it for your advantage. If you are a new age entrepreneur you probably already have mastered the art. If not, find your “Always-on-Twitter-and-Facebook buddy” and get some tips. Be very nimble because your customers are nimble now. For big companies, the sales cycle is typically in months. For small business, the sales cycle is in weeks. You have to match their speed with your own to close the deal.
If you are careful with these, I am sure you will have large diversified and loyal customer base – the best quality customer base any company can desire.
India is at a crossroads today. Gloom has replaced what seemed to be an unending boom just a few years ago. After a decade of rapid growth led by the services sector, the Indian economy has hit a plateau. While services exports continue to grow and create a surplus in services trade, they only constitute 35% of the country’s total exports and are unlikely to compensate for the deep deficit in merchandise trade that stands at 10% of gross domestic product (GDP). This deficit in goods trade is partly attributed to the services-led route of economic development taken by India in the post-liberalization era, in contrast to a manufacturing-led route to development that creates a strong base for goods trade.
From a national policy perspective, excessive dependence on services is akin to putting all one’s eggs in the same basket. For a country of India’s size, diversity, and global aspirations, a more diversified economic basket is an urgent imperative.
The current situation has created a need to nurture and bolster “products” or “goods” industries. But the challenging question is where to begin, and which industry might lead the charge. Given India’s rise to prominence in the last two decades as a software hub, could software products be the ideal place to start?
Unlike manufactured products, software does not need major logistics infrastructure, nor does it depend on inputs other than human capital. Further, software products can be delivered through the cloud.
Therefore, the software product industry holds the potential to circumvent India’s relatively weak position in manufacturing and yet capture a high enough degree of value to address at least some of our economic challenges.
In addition to the direct benefit of a healthy software product industry to the national economy, technology can bring about an order of magnitude improvement in the effectiveness and competitiveness of other sectors, be they industrial or social. Industries as diverse as healthcare and jewellery could benefit from standardized software applications that enhance their competitiveness. Therefore, a competitive software product industry will not only benefit the economy but will have a ripple effect across the society at large.
Though the aspiration for a vibrant software product industry is compelling, international comparisons show that we have much ground to cover. While the number of engineers in the Israeli software industry is only a third of those employed in the Indian product industry (including MNC captives), Israeli start-ups raise almost double the amount of venture capital that Indian start-ups do. Further, we have thrice the number of start-ups as Israel, but Israeli investors managed 40 times the number of exits compared to Indian companies in 2011. So far, India’s software product industry is punching below its weight category and needs a fillip.
In the past we have failed to realize our potential in products. Take telecom as an example. We have created mobile services giants like Airtel but have no telecom product industry to speak of. Our air force is one of the largest in the world and yet we haven’t been able to get the light combat aircraft (LCA) deployed in 30 years. We have somehow not been able to develop a product industry in India.
A challenge as big as this one is unlikely to have a one-shot solution. Yet, a vibrant product industry is unlikely to emerge by chance either. The solution needs to emerge gradually and iteratively, based on a continuous dialogue between software product companies, investors, policy makers and potential customers. Shaping policy, funnelling investments and stimulating the market can potentially steer the software product industry in the right direction.
It’s here! The India Internet Day(a TiE event) celebration is beginning, and you’re all a part of it. You may be an outelier, an insider, a veteran, an investor, a trend spotter, an experimentor or an industry driver, but this is your go-to event this year.
Why? We’re looking at the long-term horizon and paradigm shifts in the internet industry globally and translating that in the Indian context. We will debate and discuss strategic drivers of the industry and will attract the top players.
Eight Indian startups get their “4 minutes of fame” at the event – an unprecedented happening. No wonder that when we opened the call for applications, we received more than 55 of them.
The competition was tight, and the job of the jury was not easy. The jury – Rajiv Prakash(Next in Advisory Partners , Saumya Meattle (ModuleOne), Srikant Sastri (Vivaki), Vivek Agarwal (Liqvid eLearning) and Vimalendu Verma (Magic Software) – rated the startups on the following parameters: originality, impact, practicability and applicability of the Innovation. After a lot many conversations and debates, 8 companies were shortlisted.
The big question: Will you be there to see the innovations being put forward by these companies? Next year could well be your turn.
Bluegape helps brands in setting up fan merchandising stores. Fan merchandising is ignored by most brands in India and is also a unique way of promotion for brands.
Cite Communitiesis an open online community for management professionals and serves more than 28 lakh people worldwide. The community offers a free-to-use knowledgebase with a discussion forum. This is where professionals can share career-related queries, which are answered by experts and mentors. The trump card? Anonymity.
Dineout is a table reservation website that enables customers to book a table, online and on the phone, at their favourite restaurants in town. It provides fantastic discounts – something not on offer if customers go to a restaurant directly.
Huntshire helps solve the problem of finding the right talent in a given time frame. Right now, companies must post vacancies on job websites and wait for 30 days to get maximum applications. Post this, the candidates are screened. The entire process takes 30-45 days. Huntshire does all this in 3 days, eliminating the need for a two-step process.
PerfectMyEnglish is a Web and Mobile App enabling tangible improvements in English communication skills for students and professionals. They offer personalised mentorship, detailed analytics, spoken English skill remediation through VoIP services and end-to-end solutions, helping businesses and recruiters achieve key English training and assessment objectives.
NowFloats: With 850M mobile phones (over 90 per cent feature phones) and SMS being a pervasive technology, NowFloats enables creation and updating of websites through SMS for small and medium businesses in India. Smartphone owners can use mobile Apps.
MindHelix:Sentinel is the first app designed with women’s security in mind. The app can send instant alerts in case of any problems. A forced power-off of the phone or an improper exit of the application will trigger an alert to be sent. Prolonged signal loss will also cause a ‘fail safe’ alert SMS and email to be sent from the company’s server.
Mobile Harvest is a two-way oral and intuitive literacy neutral community and networking platform, much like an oral Wikipedia for our emerging billion. It attempts to bring the benefits of social media to people who are not comfortable with reading or writing.
Ashok was perturbed. In Jan 2006, an eastern European company had taken his source code, made minor changes and started selling it under an alternate brand name at a reduced price. Ashok’s company Chartengo was a pioneer in Adobe Flash based charting software that helped users create charts for data visualization. Its charts were perceptibly superior to any available on the market. The company had five employees and revenues of $500,000 in 2006. It used to offer source code with its USD 99 developer version of the product. A growing business like Chartengo was sandwiched between free libraries on the Internet and large data visualization vendors (revenues > $100 million) on the other. In between it also had to content with few hundreds of competitors. The possibility of a vendor infringing on Chartengo IP in some distant corner of the globe was high.
Chartengo did not have a legal team so they contacted a firm that specialised in copyright infringements. The firm quoted $250,000 to file a suit but there would be additional fees for court appearances. besides the unaffordable legal fees, Ashok was apprehensive about the stance an eastern European court would take in this matter. He decided to forego the legal route. He talked to development team and few experts outside. A surprise suggestion with overwhelming majority was – make your product code open source. They said open source code will make it difficult for infringers to compete. Why should customers pay for a code that is open source from the original vendor? Ashok’s team of developers was thrilled with the idea of open sourcing their code. It would accelerate innovation and save them time developing everything themselves. They felt perhaps the customers would also be happy. They could also see an opportunity for higher revenues. The open source would probably draw more customers, especially those who were sceptic of dealing with a small company like Chartengo.
Ashok had so far found it the best strategy to protect its intellectual property. He believed innovation would only happen if it could be exploited for exclusive financial benefits of the innovator. How could he even think of handing over his crown jewels to the infringers in the marketplace? The thought of handing over his IP to these hackers and letting them enter their random untested code into it thus contaminating its pure quality was appalling to Ashok. He clearly saw his competitive advantage evaporating with opening his source code. Yet, at that time, open source was rising like a tsunami? Apart from individuals hacking into your code, well-funded companies were also doing so. There was passion about open source. Even customers were enamoured by open source culture. It was turning into a religion.
BSB is a start-up funded by Bharti & SoftBank building mobile products for the Indian market. Hike is a messaging app which allows instant messaging and group chat on your phone with friends who have Hike, as well as those who don’t have Hike. We caught up with BSB’s head of products and strategy, Kavin Bharti Mittal (KBM), to talk about Hike, right before he was getting ready to launch Hike 2.0, a major update to the messaging app.
Introduction
Hike is a pure Made-in-India product. BSB is based out of Gurgaon, and the product was built from scratch by this team. Under the guidance of KBM, who is also the resident UX guru, the team brought out a beautiful and highly functional product in Dec, 2012 when the team size was 15. They are 30+ now, and furiously working on next set of features, supporting users and handling the success!
Product Highlights
The product has been designed from grounds-up by Hike team.
The design is beautiful and minimalist.
They chose a more efficient protocol for communication (MQTT, which is less chatty than the better-known and more-often used XMPP).
In India, Hike allows its users to message to non-Hike users by converting Hike message into an SMS (each user is given 100 free SMS every month). This is a key differentiator for Hike, in addition to a cool and modern design.
Product Development
Following an agile development model, they schedule a release every 4 weeks with a stop gap release for performance and related fixes in the middle if need be. Such a schedule ensures that they are not hitting the users with too many changes too often, and still stay responsive to market feedback.
KBM controls the product UX and works with his designers to create detailed wireframes and mockups before engineering starts working.
They have a very product-focused culture and so engineering-design conflicts are minimal as everyone understands the need for a great design and works hard for it.
They work on multiple platforms in parallel, so lessons learned on one platform are quickly incorporated into other platforms in the same release cycle.
Product Strategy
Beautifully designed product – Made-in-India products are not known for good designs. Hike is a notable exception and this will help it gain ground quickly.
Messaging Hub – In the world of Facebook and Twitter, there is a huge amount of information generated and consumed by people, causing information overload. Hike aims to cut this clutter and allow you to create a closed network of friends with whom you share right amount of information. This is a good differentiation strategy.
Close partnership with carriers – With smartphone penetration going up all over the world and cheap smartphones being available, messaging applications are well-positioned to kill SMS (and jeopardize a large portion of carrier revenue). Hike can offer opportunities to carriers to offer value-added services and retain (and enhance) that revenue.
Adoption
The messaging app space is very crowded (WhatsApp, Facebook Chat, WeChat, Nimbuzz , etc.) and Hike is a late entrant to the party. Still it has created considerable buzz in the market and have some impressive numbers to show.
In 4 months since the launch (they launched on 12/12/12), they have crossed 5M users (adoption is measured by # of active users – sending at least 1 message a day) and growing fast!
Over 50% of their users use hike2SMS feature, which is a key differentiator for them
They have used rewards (Talk-time rewards, ended now) and incentives (50 free SMS for each successful invite) to good effect to create good buzz. However, as KBM says, buzz and going viral work only when you provide a good value to the users. Hike 2.0 is expected to bring in lots of features.
Using digital channels for marketing and support very well: Blog, support site, Facebook page and twitter handles (@hikeapp and @hikesupport) are all well used by users and well-responded by Hike team.
Hike 2.0 and beyond
On Apr 17, BSB announced Hike 2.0, a significant release which introduces ‘circle of friends’ notion and many other features. With Hike 2.0, you can now create a circle of friends (consisting of your close friends), post status and mood updates to them, and review their recent updates. This is similar to Facebook’s Improved Friend Lists and Google + . Read the announcement for full list of Hike 2.0 new features and enhancements.
‘Status updates’ are asynchronous models of communication (you don’t expect your friends to read and respond immediately, though this Facebook generation usually does!) while messaging is supposed to be synchronous – you engage in conversation in real-time and expect a response. With 2.0 release, Hike is positioning itself as the ‘messaging hub’ for mobile-first crowd, and taking a ‘closed group, more engagement’ approach (as opposed to ‘everyone reads everything about me’ philosophy). While this might pit it against Facebook and G+ in terms of functionality, I think this is good strategy going forward to capture mindshare of an audience who is a public enough to chat with anyone, but private enough to need the solace of ‘circle of friends’. This also attracts users like me who prefer private and deep conversations and shun messaging apps because of its openness.
As Hike grows beyond the feature-functionality debate, it needs to give more focus on back-end: messaging is critical for its audience and disruptions caused by planned maintenance or rush to get new release must be avoided at all costs.
The Road Ahead
My address book contains my US, China and India friends which add up to about 400 contacts. When I installed Hike on my phone (Nokia 710), I found hardly 5 friends who were on Hike (Hike looks for those who are on Hike and adds to your friend list). I did the same for WhatsApp, and I saw 80% of my contacts show up as using WhatsApp, including some of the people I didn’t think were in the target segment of messaging apps!
Hike has a long way to go, but I think they have started with the right product and are travelling in the right direction. May the force be with them!
When nearly two dozen product enthusiasts sit around a table passionately talking for 4-½ hours, expertly addressed by two product veterans – Amit Somani and Amit Ranjan, you can expect an information overload. And, it did seem like drinking from the firehose, trying to capture all the takeaways in the intense back and forth, where even a tea-break seemed imposed. A blast it was – this iSPIRT Playbook Roundtable Delhi edition on “Effective Product Mgmt & Delivery”, focused around learning for startups.
[This was the NCR session on Apr 13th. Initiated, as part of iSPIRT, by Avinash Raghava, and very ably facilitated & supported by Aneesh Reddy. Great facility and great Food by Eko Financials. Thanks guys, Awesome effort!!!]
iSPIRT Playbook Roundtable in Delhi (Click to see all on Flickr)
Thankfully, there was a structure, laid out initially across specific dimensions – Product Planning, Delivering, Hiring, Culture, Metrics, Customer. These themes kept repeating through the session with questions coming from participants across the breadth & depth of product management, and many times touching upon all the aspects of running a product company.
Here’s an attempt to sum up the takeaways from this long & exhaustive (not exhausting, yet!) session.
Planning & Delivering the Product
– Product Planning in many start-ups is not an elaborate exercise. It is typically handled by one of the founders, and “build and adapt as you go” is the norm.
– Delivering a great product is always an intersection of Engineering, Design and Product Management, with Product team in the driver’s seat. This intersection and collaboration is one of the critical factors in getting a great product delivered.
– Getting the Engineers and Designers to collaborate is one of the key challenges. As per Amit R, what helped them at Slideshare was the fact that they always hired Engineers with a flair for Design. A great developer as part of the product team is 70% Engineer & 30% Designer, as per him.
Product Metrics
Amit S emphasized that metrics are very important for product managers. When the team grows (when you can no longer rely on people to just talk to each other and get things done), the metrics-driven product management becomes critical. Touching upon the right hiring in this context, Amit S insists on covering the candidate’s thought process around metrics (with open questions such as – what would be your primary metric if you were designing the Delhi metro).
Metrics & the Rule of 1/1/1: This is one rule around metric that Amit S follows. What will be your metric for 1 Week, 1 Month, & 1 Year. Break it down, with crystal clarity and follow it up religiously. (A great resource for B2C space around metrics is a presentation by Dave McCleor – Startup Metrics for Pirates).
Some learning around Metrics:
– It is important to be clear of the vision, and how it connects to the primary metrics that you define. There’s a direct correspondence between identification of the key metric and the clarity of what the product is trying to achieve.
– Relevance of the metrics to the specific goals through the product journey is important. As one goes along in the product journey, the dimensions on which key metrics are identified may vary. Initially it may be customer acquisition; And then it may be engagement; then conversion; retention; life-time value; and so on.
Customers
One of the key questions around customer aspect of product management is – What is the right spec for the product? One of the biggest mistakes product managers tend to make, as per Amit S, is when they confuse the “Customer Requirements” with the “Product Requirements”! Sorting this out is the core to the responsibility of a Product Manager.
Some of the tips & tricks around Product Specs:
– When faced with a requirement, the first pass criterion (in B2B scenario) should be – if the requirement is relevant to at least 3 customers.
– There are various tools to interact with customers, and get feedback: Surveys, Net Promoter Scoring, Feedback through the product interfaces, and so on.
– Get the Information from Customers, Tone it down, Tune it further, and then arrive at the specs for “Engineering”.
– What should the spec typically look like? Default Rule of Thumb – 1 Page Spec. It should be very focused, very clear, in what the feature is trying to achieve, and at the same time not too long.
– A Good quality spec considers the “Least Granularity of time” with Clarity of thought. That’s from the Project Management perspective. From the functional perspective, Amazon has a good model that can be followed. Every Spec at Amazon is a 6-Pager Document – forcing people to establish clarity of thought and articulation.
– Another good alternative is the 1 Pager “Lean Canvas” by Al Ries.
– It’s also important to be clear on “What” requires a spec and What doesn’t. Both at Slideshare and MakeMyTrip, the team goes through multiple “Lights-on” stuff that they need to perform to keep the business running on routine basis. And these are fast-track enhancements and modifications driven by immediate business needs and marketing requirements. The Lights-on requirements are different from Core Functional Specs for the product roadmap.
– Another criteria that decides how detailed the spec should be is based on the number of users getting impacted.
– How do you handle customer requests with investment requirements that are not justifiable on the ROI? There are multiple considerations to this. The “Life-time Value” of the customer is important, and if such investments allow you to enhance it and calculate ROI in longer term benefits, it may still work well. There are alternative ways to look at this though. In the experience of Aneesh at Capillary, they had divergent requests that led to a very different direction for the Product and transformed it from “Mobile CRM” to “Intelligent CRM”. Another possibility could be to look at partner ecosystem and see if there’s a synergetic way to address these needs.
– How do you manage your customer requirements into “Not to have” features? How do you single out the noise? While it is nice to think of an ideal situation of getting the product requirements at the planning stage, when the customers use the product, they often come back with plenty of views that need to be funneled down. When you have to discard some requirements, it is important to “talk to a lot of people” to ensure weight. Also, some of the requirements die-down on their own, clearly indicating noise factor. It is a balancing exercise between reducing the hassles in customer feedback process and creating enough friction to dampen the noisy “Vocal Minority” (the term that Amit R uses to refer to the few customers that may be so noisy that their voice seems more important than is worthwhile for the product).
Hiring and Product Management Structure
As per Amit R, Product Managers should be (are!) Second-in-command in the sense that they decide the future of the company. Considering this, it is critical that one single product dimension doesn’t overweigh the hiring process. So, intake process for Product Managers needs to follow the 70% rule – The Product Managers need to be aware on all the broader and holistic dimensions of running the product business including sales, marketing, operations, design, and so on, with 30% depth on the critical Product Management areas.
Some of the specific tips on this from Amit S and Amit R, and some from participants:
– Determine if the candidate can think holistically and de-clutter the thought process in the crowded set of inputs. Ability to deal with ambiguity.
– Product management is typically a “common-sensical” thing. Look for common sense and intuitive angle.
– A great product manager would do well on what can be referred bluntly as “dhandha” (Money part of the busines). You cannot afford to have a Great product with “no” money.
– One of the participant companies built their structure around Customer Success. Majority of the Product roadmap is driven by the Customer Operations, Tickets, and resolutions – and driven by how customers used and viewed the product in B2B scenario. In such cases, they typically found it useful to move folks from Customer Success team into the Product Management areas.
– In case of another successful participant company, the CTO is playing the role of Product Manager and it is working very well for them.
On the relationship between the CEO/Founder and Product Managers. As per Amit S, Product Manager is the CEO of the Product, while the CEO is (of course) the CEO of the Business. One of the challenges for the Founders is how quickly they are able to let go he Product Management and start focusing on the business and Product metrics. Amit R also emphasized that it can work cleanly with the CEO focusing on the business aspects while Product Manager focused on the Product aspects while maintaining the alignment.
Where should the Product Manager Report? At high level one case say that it depends on where you are in the evolution of the product/company, and what the Product really means to the vision of the company. However, over time, Product Management needs to be separated from Marketing and Engineering. In essence, Product Manager shouldn’t report to the Engineering or Sales or Marketing. In corollary, there should not be a reporting into Product Manager as well. Product Manager is a “Glue” job, and is key to a healthy tension for the product direction.
Product Manager is WHAT of the Product – Defines what (functionally) should be built. Engineering is HOW and WHEN of the Product – Details out & manages “How” (technically) and “When” (schedule-wise) should the stuff be built.
One needs to also establish clarity on Product Management being different from typical Project Management. Also, there are strategic aspects of product that are owned by the executive management, however, you always need a “Champion” of the product that is independent of the other forces that drive the organization.
Importance of Data Guy! Another structural aspect that Amit R emphasized on (multiple times!) was the importance of a “Data” person in the Product Team. This role is almost as important as a Product Manager in the sense that Data & Analytics can play a key role in the product Roadmap definition. There are various flavors of the Data – Dashboards and reporting, Product Management level Metrics, Decision Science, for instance. Interesting to note is the fact that at LinkedIn, next set of products are heavily influenced by “Decision Scientists”. (Cue References: Hal R Varian, Chief Economist at Google and DJ Patil)
While there was a whole lot of structure to these discussions, we had some extremely valuable side discussions that link back to the Product Management, and very important to address. Here are some! 🙂
Positioning. For a clear direction for Product Management, the positioning of the product in the market is a key factor. How do you refer to the product? The answer to this question, in case of start-ups, seemed unanimous that the start-ups are too limited in resources/focus/energy to be able to create a new category. Aligning to an existing category with a differentiator is the key to early success. For instance, Slideshare referred to itself as “Youtube of presentations”, Vatika positioned itself as Parachute with Additional ingredients, “Busy” positioned itself as Tally with better inventory management and statutory reporting.
(Positioning is an important theme and comes with lot of related broader areas for considerations for Product Companies. We will have a round-table specifically around Positioning in near term)
What’s a Product? (A rudimentary question, I know! But worthwhile to hear the perspectives! J) How do you differentiate functional Product Management from the technical side of it? As per Amit R, “Product is the core experience or core touch-point for your end-consumers with your business.” It is worthwhile to note that the various types of customers may have different ways to access the product and there may be different ways to define the touch-points for every segment. For instance, Slideshare follows a Freemium model where 5% of the Paying customers may have a different set of touch-point experience from the rest of 95% free users. So various segments, such as Free B2C, Paying B2C, Paying B2B, and Partner B2B may all have different touch points with the same Product.
How do you get the Product Managers to champion the cause of usability and aesthetics? As per Amit R, in case of Slideshare, CEO happens to be from the usability background and that helped a great deal, since the thought process permeates across. It is important to engrain the usability in the way of the product management, since you cannot bolt it later, as per Amit S. There are various ways MakeMyTrip tries to do that. One of the eureka moments, for instance, for Engineers and developers was when they were shown a “live session” of a user through the Screen capture tool. It also helps to have the live user sessions in front of the product team. Some of these approaches can build that appreciation for the user actions in the minds of product team, over time with sustained effort.
Retention and Customer Lock-in: Slideshare has learned the harder way that ignoring Emails as a mechanism for customer engagement and retention is costly. LinkedIn relies on Email based “Customer retention” and “Returning Users”. Jeevansathi.com uses a strategy to map the customers in various life-stages and uses various Email and SMS templates to engage them even through the very short life-time of 3-4 months.
The Mobile Storm: As per Amit S, having a Mobile Strategy through this year and next year is critical for the product companies. Web is no more the only option, and for some products, it is becoming a mere secondary. Mobile First makes sense. The transactional figures for Mobile are increasing at such a rapid pace, that an afterthought based Mobile based functionality may not work so well.
If this is any indication of the things to come, the product ecosystem will benefit immensely from the initiative. Looking forward to the furutre editions, and share more!
