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“We are getting the world to gain confidence on enterprise products developed out of India” – George Vettath, CEO of Kallos Solutions

ProductNation interviewed George Vettath, Founder and Managing Director of Kallos Solutions to learn about the journey of his company in the Enterprise software space for the past decade. In this interview, George explains how his background and experience helped in creating a superior product, and provides useful tips for entrepreneurs in this space to get more effective. Read the full story here….

What was the motivation to start your company? 

I had been working in the enterprise software space for over 16 years prior to taking the entrepreneurship leap. Around 2003, I was fascinated by the model based development – a technological innovation that started emerging in rapid software development. I immediately recognized an opportunity to leverage this new model, using which I could reduce time to value to a customer by five fold. Besides this, at that time, I had a different point of view on the direction of strategy with my employer. Both of these led me to start Kallos in India.

Why did you choose India as a location? 

First, I wanted to give back to my country that helped me get global exposure, via sponsoring of my MBA at Sydney University, Australia. Secondly, my initial working years were spent at CMC and RAMCO Systems, during which I had developed a good understanding of the needs of the Indian customer. Thirdly, my roots and extended family are here. All of these were principally responsible in my decision to start my venture in India.

Starting a new company in the enterprise space, under conditions that prevailed a decade ago should have been very challenging. What gave you the confidence to pursue this path? 

Like I mentioned earlier, during my professional career, I was already exposed to the nuances of dealing with Indian and global customers. I was part of the core team at RAMCO which was tasked to build its ERP product. Further, as global head of product management, I was given the responsibility to broaden the reach of RAMCO products to 8 different countries. The experience of selling these products in different geographies, dealing with competition – primarily SAP that came in to Indian market and virtually uprooted us, reconfiguring our strategy to survive the onslaught of global vendors, was the primary source of my confidence. I realized that I could still make my mark, despite all the heavy competition, as long as I had a sustainable competitive advantage against all these vendors.

Can you tell us on how you could translate your thoughts into a real sellable product – and one with a competitive advantage, over the past decade? 

From 2003 till about 2006, we focused on building the product suite on the principles of model driven development. I bootstrapped the company during this period, by executing US projects on the side. From 2006 onwards, we started aggressively reaching out to customers and began delivering product centric solutions, based around the PaaS infrastructure that we had developed in house. The business model was to keep the PaaS in-house, but leverage the platform to deliver rapid solutions and customizations, around our ERP/CRM and HRMS products. Thus, we differentiated ourselves with others in the marketplace as providers of product and platform centric customized solutions, delivered within relatively short timelines.

Another aspect to note is that we did not concentrate on hyper growth. We took a very long term view on the road to profitability – knowing fully well that as the product matures, growth will follow. We also did not adopt aggressive marketing tactics. All we did during the past decade was to wait for a disillusioned customer tap our door after he or she had burnt their fingers trying to adopt a MNC vendor based solution and failed. I realized that the most difficult area in the Enterprise suite implementation is in addressing the variance of requirements across customers in their respective supply chains. Here, we leveraged our development strength to rapidly customize solutions as per customer requirements. These aspects have enabled us to sustain the edge against competition over the years.

Interesting insights… Can you share to us your moments of wins during your journey thus far? 

We have provided solutions to over 170 plus customers thus far – and each one is an important milestone in itself. If I need to recollect the ones that had most impact to the organization, I would think the win we had at CSS Corp for our CRM solution, and wins at Bluedart Aviation (subsidiary of DHL), Scope International (Subsidiary of Standard Chartered Bank) and many services based BPO Organizations for our HRM solution as the key ones. Some of our international wins from the KGK group in Hong Kong and LCC in the Middle East for KServeHRMS, are also milestones since it was the early international sales of our products. The CSS Corp win validated our PaaS play, as well as demonstrated that our solution could scale to support a workforce of 400 users as early as 2007. The Blue Dart Aviation, Scope International and BPO HRMS wins gave us confidence to ramp up KServeHRMS as our current flagship product.

The KGK Group in Hong Kong initially bought the HRMS package for deployment at one of their offices – but after successful implementation there, they expanded to roll it out in many of its group companies in the Far East. An e-publishing firm in Delhi, Aptara Corp was able to effectively use the operational workflow automation solution for its 1100 employees. Power2SME, a Delhi based SME aggregator standardized on our ERP offering and went on to get funded on account of our backbone solutions. These are some experiences that I can recollect…

Over the years, you also would have your share of lost opportunities. Can you shed light on a few key ones?

As regards to lost opportunities, I think we focused initially on selling KServeCRM and KServeERP instead of KServeHRMS. We realized a bit late that the gap in the market was really in the HRMS space in India. We had the best in class HRMS solution and even those customers who had deployed MNC based solutions had not availed of the HR part for a variety of reasons.

The second one in terms of missed opportunity would be our lack of focus on going global earlier. International product sales are more profitable since they are tax free, and easier to implement due to maturity in their processes. In fact, the global customers that we have today – all of them came to us directly based on the good feedback and performance of our products in the field.

Having traveled the road thus far, what advice would you like to give to product entrepreneurs operating out of India?

Over the years, I have seen many companies start off and then shut down. While the reasons of closure could be many, I would advice all product entrepreneurs to have a proper focus on cash flow management and customer management, especially if you are addressing the domestic market. Software is not something that is understood fully by customers in India, and so, you need to work on getting them to understand the hard work that you are putting in to make them successful. Once they see the intent and integrity, customers will never hesitate to pay.

On a related note, personally, I spend about 2 to 3 hours every week for the startup and product ecosystem. I also aggregate the key challenges faced in this region to the appropriate policy makers in my capacity of being the Regional Chair for NASSCOM Emerge Forum for the past 2 years. I feel that over the past two decades a bunch of like minded folks have provided confidence to the world that we can conceptualize, build and sell enterprise products out of India. I urge all the fellow entrepreneurs in this space to reach out to us, collaborate and ensure that we take this momentum forward, and to greater heights. 

 

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Emotionalizing the software products… uh…what?

I recently delivered a workshop on building winning products. The audience identified that it was important the customers loved a product in order for it to be a winner. It also came up that consumers increasingly want to buy things that thrill and delight in addition to simply doing what they were designed to do. Today, things around us from Gillette razors to Apple devices exude desirability and emotionally engage consumers. People look at their possessions as a means to provide them self-expression and extend their personality. They also crave for great experience in the journey of whatever problem they are trying to solve. They find the mere discreet functions and features unexciting.

The new focus on emotional experience is consistent with the psychological research that confirms that people value emotional experiences more than even the product functionality. Statements like this from users, “there is shortcoming in my iPhone, but still I love it”, are commonly heard now-a-days. Indeed, “Form follows function” has given was to the more emotion led approach to design: “Feeling follows form.”

Why build emotional connect

Technology people live in a rational world and they think the rest of the world too. This is however, far from truth. Emotions drive peoples’ attitudes and behaviors. Rational thought can lead customers to being interested in the product and be happy with tangible gains from its functionality. However, it is emotions that drive customers’ desire to own the product, pay any premium and recommend it to their friends. Emotional engagement promotes loyalty and revenue growth thru word-of-mouth. There is a proven ROI in emotionalizing software.

How does this impact software? Well the software is becoming an ever growing component of the plethora of devices and services that proliferate around at home, workplace and other places. This means software has enormous possibilities for creating emotional experiences for the consumers. It makes it imperative that software developers fulfill this consumer expectation.

How to build emotional connect and satisfaction

People think about and experience life through a set of deep rooted metaphors. The metaphors help them make sense of the plethora of experiences through these metaphoric lenses.  Emotional experiences happen thru the five senses – vision, hearing, smell, taste, and touch. Software products and services are abstract in nature. Unlike other products (devices, autos, homes etc.) they can mostly leverage only vision and hearing for the emotional experience.

Keeping the challenges in mind, here is a set of steps that the author found useful in this endeavor.

  1. Develop customer empathy to gain deeper understanding of the customer, their needs, wants, deep desires and values.
  2. Understand that people respond to feelings, remember stories, and take actions based on deep rooted metaphors. Therefore
    1. Identify metaphors people live by. Metaphors vary by culture. Metaphors change with time.
    2. Use metaphors to create the symbols, icons, colors, texts, workflows etc.in interaction design.
    3. Use storytelling techniques in internal and external product communication like product vision, requirements, specifications, prototypes, press releases, product positioning statements, tag lines, advertisements and documentation.
    4. Keep customers and their pain points and value props alive thru the product development where daily engineering and feature decisions can easily lead to overlooking who the customers were and what they wanted.
    5. During product development
      1. Personify user / customer during software development. Use personas.
      2. Build not features but complete scenarios of customer problem solving.
      3. While making engineering / business decisions constantly ask – will that persona like the change? Does the decision breaks down any end-to-end scenario?
      4. Post product development
        1. Create emotional connect at every touch point like sales transaction, support and upgrades.

We shall delve deeper into each of these steps in forthcoming blogs.

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Quick Research / Usability Methods: Lean Usability Testing

(Post 3 of a series on quick research and usability techniques. Start-up’s can use these techniques fairly easily to connect to and understand their end users better, as well as maintain usability standards on their products.)

Previous posts in this series showcased two discount usability engineering methods – ‘Expert Usability Review‘ and ‘Heuristic Evaluation’. Both these methods are ‘expert based’ – i.e. an interface is reviewed by design or usability experts vs. getting feedback from end users – and are used to identify usability issues on an interface.

Post 3 introduces lean Usability Testing – A ‘guerrilla’ version of traditional Usability Testing.

Before discussing the how’s and why’s of ‘lean’ testing, here are a few basic points to better understand Usability Testing and why it’s important in context to start up’s.

USABILITY TESTING BASICS

Usability Testing (UT) is a research method used to gain insight into product usability.
It is a time bound ‘show and tell’ method where a moderator asks representative users to use and/or talk about the product being evaluated, in context to key task scenarios.
A basic test typically starts with open ended ‘interview style’ questions, followed by a longer scenario based ‘show and tell’ session and ends with a debriefing session.

Usability Testing can be conducted at various points of the product development lifecycle.
Although there are several types of usability tests and techniques that can be used, testing can be broadly classified into ‘Formative’ and ‘Summative’ Testing.

Formative Testing can be conducted at any stage of development. (Initial paper prototype / high fidelity prototype / even post release)
The objective is to aid iterative design. Formative Testing is typically qualitative in nature and the goal is to find specific pain points and highlight areas of improvement.

Summative Testing is done only with designs that are complete or near completion.
The objective is usually to judge the design against quantitative metrics (like efficiency or productivity) or against competitive products.

Find out more about Usability Testing and how you can plan for and conduct a test, at Usability.gov.

Steve Krug’s demo video is also a good starting point to get started with Usability Testing.

Demo Usability Test

 

 

 

 

 

 

WHY TESTING IS IMPORTANT: THE MALCOVICH BIAS

The Malcovich Bias

The UT method is particularly relevant to start ups, where the environment is characteristically ‘inspired’ and ‘driven’ by a shared product vision.
In order to pull in the best talent and sustain momentum, start-up leaders ‘sell’ their product to themselves, to their investors and to their employees.

While this can energize teams and enhance productivity, it also fuels the ‘Malcovich Bias’.
(‘The assumption that ‘target users’ use things / see things / care about the same things that the ‘product / design team’ does.’)

In a high-pressure, super charged start up environment, it is easy to become ‘product / vision focussed’ rather than focussed on the people who are ultimately going to use the product.

Usability Testing puts start up teams in touch with their end users and their reactions to the product that is being built.

And seeing people struggle with what seemed standard or obvious reinforces the fact that assumptions made about the product or its features may be very different from the way users actually perceive or experience it.

LEAN USABILITY TESTING

That said, traditional Usability Testing can be difficult to incorporate into tight budgets and product timelines. However, several specific elements add to the cost, duration and complexity of testing, and can be substituted with lightweight alternatives that help make ‘Usability Testing’ leaner.

Lean Usability Testing is easier to fit in because it is cheaper and can be done more quickly than traditional testing. And more so in context to Agile Software Development – where a key practice is quick and incremental development.

For example, did you know that testing in a professional facility can add to the cost, but is usually not a ‘must have’?
At a basic level, a test can be conducted very effectively in any room that is quiet and available for use without interruption.

Other (cost effective) alternatives to a professional / formal testing space include:

  1. Remote (Moderated) Usability Testing
    Remote Testing follows the same objectives and a similar process to traditional ‘lab’ usability testing. The obvious difference is that the moderator and the user are in two different locations. (e.g. The moderator in his office / the user in his office or home)
    However, with good screen sharing and screen recording software, usability testing can be conducted easily and effectively with a remote participant. Besides saving costs related to renting or setting up a formal testing space, remote testing reduces the costs of accessing geographically dispersed target users.

    screen sharing software

    Recommended screen sharing software – WebEx, Adobe Connect, Skype, GoToMeeting

    screen recording software

    Tech Smith’s Camtasia Recorder is an easy-to-use tool that can be used to capture remote testing sessions for later reference and analysis.

  2. Guerrilla Testing: This is an impromptu method and therefore should not be tightly scripted or planned. The distinguishing characteristic of this method is its spontaneity.

    The method essentially involves:
    … taking your product to a public space
    … identifying and recruiting people who are interested / fit a broad profile from among a pool of strangers
    … conducting the test right after

    If your product is generic or targeting a wide audience, you can conduct guerrilla testing on the street / in a coffee shop / at a conference;
    For niche or specifically targeted products, a more specific space that is likely to be populated by your target users would work best. (Like outside a college for an educational product, or inside a mall for a product related to shopping.)

    Besides cost and time saving, Remote Testing and Guerrilla Testing are good DIY research options for start-ups who want to get end user feedback.
    They are easier to plan and organize than traditional usability tests. Several of the challenges related to scheduling and set up in traditional testing are no longer applicable here.

    Remote Testing

    Find out more about how you can set up and conduct a Remote Test at Usability.gov, Quick and Dirty Remote User Testing (A List Apart)More about Guerrilla Testing at – UX Booth

  3. In-Context Testing
    In this case, the researcher pre-recruits participants, and then schedules and conducts tests in the context they would typically use the product – rather than having participants come in to a formal testing venue.Testing in the participants natural context of product usage not only cuts costs associated with a formal facility, but adds richness to the test. Contextual influencers that would otherwise be invisible to the researcher now become added inputs to the research.

Coming up soon – How to be leaner in participant recruiting, selection of testing equipment / software, reporting and more…

Post 4 will discuss multiple additional ways in which start up’s can conduct a Usability Test at leaner costs and timelines.

Are you a design thinker evangelizing or facilitating user research and usability methods within your start-up?
We would love to hear about your experience / answer any questions that you have about the research and usability methods you use.

We invite members of the start-up community to volunteer their screens / functions for use as examples in upcoming posts showcasing additional research techniques.
Email me at devika(at)anagramresearch.com to check whether your screen is eligible for selection. 

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Thrillophilia is making experiential travel mainstream

Travel by no means is a small industry for Indians. The country is brought up on the lure of the annual pilgrimage to a new destination each summer when the schools close for vacations. Be it visiting family and friends in new towns or high end travel to other countries, we are willing to spend money for it. A survey commissioned on behalf of Trip Advisor goes on to say that Indians will spend more on vacations this year and within the next 20 years the number of Indians flying abroad would peak six times the current figure.

But how does it connect with the three year old Bangalore based Thrillophilia and its co-founder Abhishek Daga? Avinash Raghava and I had a freewheeling chat with Thrillophilia to find out about them. Read on the excerpts:

What is Thrillophilia? 

Thrillophilia is a three year startup in the adventure travel space. They focus on solving the pain point of finding and experiencing unique activities and things to do in India. Enabling adventure seekers to move beyond the hotel-as-a-destination to experience what the region has to offer by focusing on itineraries as exciting as kayaking in Goa to walking tours in old city of Mysore.

How did it all start?

Travel had always been a passion for Abhishek and his co-founder Chitra. Who would then seek to travel and explore new destinations in and around Karnataka owing to their Bangalore jobs. But the problem they faced while planning for getaways was beyond finding the right destinations extending to seeking right vendor.

What began as a simple blog in 2009, Thrillophilia concentrated on providing content on ‘what to do’ based on their own experience and recommendations. With enough content and traction on the blog they slowly evolved Thrillophilia by 2010 as a side project with a small team consisting of sales leads. The initial focus and traction came from corporates and bigger brands who were now routinely seeking offbeat experiences for their team building efforts. Thrillophilia seemed to fit in perfectly with its offering.

Enter 2011 Abhishek mentions about breaking even, the entire efforts up until this point had been self funded. With a cash positive nature of their business they also raised angel funding from an NRI investor to help with the growth.

Where is Thrillophilia right now?

Abhishek claims 200% year on year for their startup with 400 tours and 500 experiences live right now with another 1000+ coming up in the next few months. Even though corporates still dominate that number is fast decreasing as the offering and the focus shifts from a B2B to a B2C product. For Indians the most popular destinations tend to be in Goa and Karnataka whereas for the international travelers Rajasthan and Kerala catch their fancy.

Thrillophilia recently launched a market place to get vendors under an umbrella banner and increase the product offering, a move which could be beneficial for the repeat customers on the platform. With nearly 600 vendors onboard Thrillophilia is aiming to meet the milestone of 30,000 travelers and 3500 experiences in the current year. Ground based travel is what dominates the offerings, but water based experiences still matter at 12% with airborne activities coming at 3% on Thrillophilia.  


Next on target?

With a dedicated scout team to help match and vet the outdoor offerings, Thrillophilia will spend the coming time to strengthen its marketplace offerings with the vendors many of whom are still standalone operators relying on voice/sms for their business. The other efforts will go towards online campaigns over social media and repeat customers.

Competition in the space

To say Thrillophilia is the sole startup building a product in the travel space would be wrong. The experiential travel space is heating up with competition coming from Delhi based Travel Triangle and TLabs backed iExperience with GSF-500 Startups backed Tushky all adding their healthy mix of spin to the sector.

Hope you give Thrillophilia a spin for your next adventure holiday. I for one am definitely pinging Abhishek for recommendations for my kayaking holiday!

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First B2B Bootcamp for product startups – last day to apply

The last date to apply for this bootcamp has been extended to 16th August especially for Product Nation subscribers.

TiE-IQ Bootcamp is a no contract and free  60-day bootcamp where the participating startups will have an opportunity to create products, launch companies and walk away with their spoils and a lot of learning.

This first edition of the TiE-IQ Bootcamp is restricted to B2B technology product startups. It builds up on the successful bootcamp conducted by IQ earlier this year. Selected startups will walk in to the TiE-IQ Bootcamp with just a minimum viable product (MVP) and take back the following :

  1. Mentorship and Workshops by entrepreneurs leading successful startups to help you.
    • Refine and finish the minimal viable product (MVP) into a ready to buy product
    • Market your product
    • Get the first few customers
  2. Peer Learning
    • Learn from some of the best startup brains developing B2B products alongside.
  3. Working Space for two months in the heart of Mumbai.
  4. Software credits with some of the bootcamp partners
  5. Interaction with some of the best brains in the venture investment world.
  6. Demo Day: Your chance to pitch to investors in Mumbai  (and Bangalore – to be confirmed)

Who should Apply?

  • Enterprising (co-)founders and technology enthusiasts who want to build disruptive technology products or services for the Indian or global market.
  • Teams with 2-3 members that are capable to design, code and release a beta version of their product to market & sell it.

How to Apply?

To apply, visit this page for more details on eligibility criteria, and how to apply. The last date is extended to 16th August exclusively for Product Nation subscribers. For updates follow the twitter hashtag #TieBootCamp.

 

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The Virtual Medical Assistant – Practo.com – a cloud based service that covers over 8,000 doctors…

“Why isn’t there a place where we can store all our medical information?” is the question that bugged Shashank ND, Founder of Practo.com. Jamming together with a classmate from NITK Surathkal, they found a solution and founded Practo.com – a cloud based service that covers over 8,000 doctors and manages the records of nearly 3 million patients. 

Shashank, I was looking at your website and I was intrigued by the fact that you actually started this business because of a personal experience. Do give us an insight into how you started?

My father was to have a knee operation, and we had visited a couple of hospitals where we had some tests done and got some reports. The doctor advised based on the reports that my father required surgery. Now obviously I was concerned and we wanted to take a second opinion and have these records shown to a doctor in the US. It turned out to be a quite a clumsy and cumbersome affair. I had to take a photograph with my camera then transfer it online and then the doctor in the US responded to us asking for more information and then it suddenly struck me, if all the information was available in a secure repository that could be accessed easily 24/7 we wouldn’t have so much back and forth and delays.

But I wanted to double check things so the next time I visited my ophthalmologist I asked him to give me the prescription on email so I could keep a digital record of it. He told me that the system he used was 10 years old and didn’t support this functionality. He went on to say, if someone can give me a system like this I will gladly use it. So my imagination started running wild and I thought of a system where all our personal health records could be available digitally.

Fundamentally, we have a Facebook where we keep all our personal information, we have a LinkedIn where we keep all our professional information, I just wondered why there isn’t a place where we can store all our medical information. If you really look at it, doctors need records because they become more efficient in servicing patents. Patients are keen on information digitally stored because they don’t have the hassle of storing stuff physically as it is also subject to wear and tear. The problem was really the intermediary software and that’s the gap we stepped in to fill.

Did you have to invest a lot of time in educating the doctors on how to use the software or what potential benefits they would get? 

Honestly, the first few we didn’t have to, because they proactively told us that they need it, so it was more about convincing ourselves to quote for the software. All the doctors who came to us already had the problem, so they were contacting us to build the software, rather than us convincing them about buying it. But after the first few, we had to really sell the proposition to the other doctor’s.

So what’s the revenue model, you charge the doctors to use this or the patients, how does it work?

No, we charge the doctors. We give the software to the doctors and doctors pay us on an annual basis. Now what does the software do for the doctors, it helps them with four main things, one- it helps the doctors in scheduling, so all the appointments, reminders to the patients about their appointments are done through our software, it basically ensures that without any manual information the patients are reminded about their appointments and the patients visit the clinic on schedule. So the dropout rate because of being misinformed or not informed comes down drastically.

The second thing is EMR or Electronic Medical Records, just like my father’s report or my eye prescription. We allow the doctors to maintain all the digital records on an account of the patients. Now this information can be inscribed, a prescription, printout, and every type of medical information that can be stored about the patient.

The third thing is billing, so doctors who are doing billing manually or on MS Word or any other intermediary software can now do it on ours.

Finally we have built a functionality to generate reports; reports allow the doctors to keep the history of patients. So for example the doctor will come to know how many new patients they have seen in a month, such data could never be accessed earlier by a and we allow the doctors to see how many patients they have examined, the money they have paid, how much has been expensed, what is the profit for the month.

Shashank, you have a young team. I looked at that photograph on your website; they are all youngsters, average age, probably 25 or so, how do you keep them motivated and charged up to kind of support you in whatever you are doing? 

One of the thing that has worked for us is that even though I started the company, we ensure that everybody feels that this company is theirs by making sure that some part of the responsibility is completely given to them. Take our website for instance, the person who designed it used grey as the background color and frankly I hated the color but it was his design, it was his work, so even though I did not like it I allowed it to continue.

I make sure that each and every creator has ownership, and that’s what keeps them motivated. The other thing we did is to add experienced people to the mix and now we have about 30 people in the company who provide the experience to the team members who are inexperienced so that they can learn a different dimension of the corporate world. This keeps everyone going.

Finally, the idea that we set out with never changed. Whatever we embarked on from day  one continues to stay. This is a very good thing that binds us all together. 

How do you really take care of balancing the expectations of various stakeholders – investors, customers and your own employees… 

That is a great question and obviously it is a tough ask, but I have this pyramid of priorities that I have created in my life. Whenever a major decision is taken, I have a mental image of the pyramid. At the top of the pyramid is the company vision. The second block pertains to the needs of the customer; the third relates to my employees, fourth is the investor and fifth is me. So I ensure that any decision that I have to take, it is a combination of these priorities.

So where does this go from here? Are you looking at international market, what is your vision, what is your roadmap for the future? 

Our approach is very clear – we want to enhance the patient’s experience of healthcare. We also want to help doctors to be more effective in doing several things – working in their clinic, treating patients and learning new things among others. So with two fundamental principles of helping the patient and helping the doctor, we believe we can concentrate on healthcare for all of us. Implementing the solution in India certainly is a focus but there is no reason why it cannot be scaled and implemented overseas so we have set up base in Singapore and already gained a customer there.

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Data and User Experience: Two ends of the spectrum

Every product that you build has to be used by people.

This is irrespective of “who may pay for the product“. This is an often brought up topic of “User vs Customer“. And if the product is used only by machines and not by real people, then it’s perhaps best to call it “technology”.

As far as technology products are concerned, a significant factor of differentiation they claim and deliver on is by leveraging data about usage and user behavior. And in a product team, the cycle goes this way:

  • Product Manager thinks up the product (you can assume that in all these steps, others also contribute meaningfully, as product creation is both an intensely cerebral and collaborative exercise)
  • Designer helps visualize the user experience
  • Engineers code it and get it ready for prime time

The plot:

1. Roll out the current version of your product
2. Get users to use your product, engage with it and contribute inputs (read Data)
3. Collect usage and behavior data, analyze it and generate ideas for the future features
4. Design & develop the new features
5. Start from Step 1 again

If you notice, in this iterative and cyclical process, the two constants are Design new features (UX) and Collect more data. While this cycle goes on, imagine the various changes that happen to your company:

• People added/removed
• Infrastructure modified (change offices/locations etc)
• Technologies changed/added
• Investors changed/added
• Markets discovered/validated
• Pivots created/executed/dropped
• And the list can continue

But the core 2 tasks remain: Design UX for your user, Collect Data from your user, both of them aimed to improve their value proposition. This prompts me to call Data & UX as the two ends of the spectrum of building a tech company. It’s very interesting to note that if Data connotes Scale, UX connotes Empathy. To build a successful company, I imagine that one needs both Scale and Empathy and not just one of them.

What do you think? Let me know in the comments.

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“Social Commerce – Enabling trust and higher conversions in online transactions” – #PNHangout with Vipin Agarwal

In this #PNHangout, we spoke to Vipin Agarwal, who is the co-founder of enMarkit and an ex-VC turned entrepreneur, about his journey in conceptualizing the product, his team, the tools and the product management philosophy and what a typical day in his life looks like!

Give us a brief introduction to what enMarkit does.

Enmarkit comes from a combination of the words: ENabling and MARKETing. We offer product based solutions to merchants who want to start selling online without these merchants spending too much time or money on creating their websites or struggling to deal with outsourcing agencies. We offer simple plug and play solutions to the entire eco-system of companies, SME’s and entrepreneurs using a SaaS model.

We have two live products –

  1. enMarkit FAST (Fast Anywhere Secure Transactions) Payments Solution – helps anyone start receiving payments online instantly. This solution embeds seamlessly on any given website, blog, Facebook page or any social media page.
  2. enMarkit ONE Store – The socially integrated solution that enables anyone to create an online store within a minute. This web-store has payment gateway already integrated at no upfront costs, giving the merchant a ready-to-use storefront that he can start sharing with his clients instantly.

Besides these, we have a couple of products under development that would, we believe, go a long way to revolutionize the online commerce ecosystem even further.

How did you meet your co-founder and how did you bring this concept to life?

As a venture capitalist I was exploring bottlenecks that entrepreneurs and companies faced in the online transaction space and in the midst of trying to find technology enabled solutions that could solve this I had met Ekta, who was the Amazon head for market places in India. It took about 6 months of back and forth conversation with Ekta before we started. Finally we chose to tackle the online transactions space head on.

We took inspiration from the user behaviour when a person shops for something from a mom-and-pop store. We realised that the entire product discovery, transaction conclusion and post-transaction behaviour of a person in real world is not reflected in the current transaction models of websites today. Buying is inherently a social phenomenon – and yet Social Commerce has distinctly been untouched in all e-commerce business models today.

It is very common to find founders juggling multiple roles in the early stages. What role do you play when it comes to product management?

In my current role I interact with multiple teams and different kinds of customers to bring our product to life. Although I do not have a background in coding, I do have a very strong opinion of the product features that come over from the use case scenarios laid out by interacting with our customers.

With feature additions we constantly communicate with the registered merchants on our platform to get an idea of what their requirements maybe. We usually break our customer demands into two buckets, soft and hard. Soft requirements are minor changes which can be made in our user interface, which improve the user experience and aesthetics of the product. With hard requirements, that are more complex and require a larger change in the product itself, we consult with the front end and back end teams to ensure the changes roll out smoothly, these could be issues such as improving load times, etc.

It’s interesting to note that some of the biggest critics we have for the product are the internal team-members! Pitching an idea and getting a go ahead is one of the biggest hurdles our product has to cross even before we even start the test marketing campaigns. The benchmarks set by our team are very high and that reflects in our products as well.

When did you know enMarkit was a market fit?

I had personally made over 2000 cold calls, talking to merchants and demonstrating a prototype to target customers before going whole hog on product development. Even though our product was in its early stages, we received tons of feedback from our users. Out of the 800-900 people I personally met, almost 70 people had actually committed to using our product after it would be ready. Once we knew that we had their support, this encouraged me to continue building the product further. After adding the social commerce features in our future iterations the market for us grew larger.

From 2012 to 2013, your product must have scaled extensively. How did you ensure the product and teams also scaled the right way?

EnMarkit started off as a social commerce platform which was built with direct contact to our customers. How we ensured continuity and evolution of the product and teams was by not throwing all the features on day 1. We request for a feature, build it, get some feedback and if it does not work as planned, we junk it. It was this type of ladder approach that has allowed us to build our portfolio of products.

What has been your most challenging problem and how did you tackle it?

Our product development philosophy has always been to build, evaluate and either junk or deploy the feature depending on the feedback we receive. Some-times junking the product affects the team morale, as the team may have spent time and energy building it. The solution I’ve found to this is to make the team understand that even though the work was great, the market wasn’t ready a feature like this.

What are some of the tools you use to maintain communication between the tech, design, business and sales teams?

There are various teams that work on various parts of the same problem, so it’s usually my role to maintain these interactions between the teams and keep the teams in synergy. Team management internally is always a challenge.

I keep a Gantt chart with me to keep a track of the timelines of the proposed and actual build times and ensure that is matched by the team. I also ensure that if a task is a road-block for another task, that timelines are maintained so that there isn’t a delay.

Some of the tools I do this with are Trello(for project management) and although very basic we use Google Docs and Excel sheets track progress.

Could you briefly tell us what a typical day for you is like at enMarkit?

Before, I get to work, I usually allocate a little bit of time every morning to catching up on the latest news even before I leave for the office.

After reaching work, I allocate some time every morning for catch up meetings with my team. We evaluate the work we will do today and how the backlog looks like.

Around lunch time, we usually take a little a little longer break of 45 mins. We usually discuss all the industry news between the team.

Post lunch, I usually allocate a couple of hours to talk to our customers.

Towards the end of the day is when I sit with the many teams again, often getting into a detailed conversation of the progress made today.

How do you divide your time between: executing your current tasks b) planning for the future c) emergency

Since it’s just the first year of our product, we do spend a considerable amount of time in firefighting. I usually plan for the future with my co-founder Ekta to evaluate the roadmap of our product and what should be communicated with the rest of the team.

Where Ekta and I help each other out, is that I work as a product manager/salesman with a lot of ideas and demands for feature requests and Ekta is usually adept at giving me an idea of the challenges that we may face in implementing these features, and also the estimated time it may take for the team to do it. By the end of this meeting, we usually end up with a list of tasks in terms of priority that can be handed over to the teams.

Any advice for other product managers?

I think product management philosophies vary from company to company, and I would suggest each product manager to use tools, styles that suit his/her personality. There’s no one mantra that fits all. The longer plan is balancing the requirements of the customers and the capabilities of the team.

Editors Note:

Every member of the product team is important. To succeed, a company must design, build, test and market the product effectively. That said, there is one role that is absolutely crucial to producing a good product, yet it is often the most misunderstood and underutilized of all the roles. This is the role of the product manager. #PNHangout is an ongoing series where we talk to Product Managers from various companies to understand what drives them, the tools they use, the products they work on, how they go about their day and the role they play in defining the products success.

If you have any feedback or questions that you would like answered in this series feel free to tweet to me: @akashj

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India as a Product Nation is in good hands – Insights from the Lean Sales Roundtable

The fate of the future of India as a product nation is in the hands of 20 somethings and 30 somethings.  Whether it is sheer luck or sheer brilliance or sheet hard work, or all three I don’t know, but what I do know is that the future of India as a product nation is in good hands.

I attended a Lean Sales Playbook for about 3 and a half hours.  I had no idea how the time flew as  Pallav Nadhani (fusioncharts.com), Varun Shoor (kayako.com), Paras Chopra (wingify.com) shared from their companies’ experiences.  The attendees got a great insight from these three founders on how to make sales and marketing efforts pay.  Every talk was littered with “what works and gets customers in the door” versus just some sales and marketing theory.

The team intensely discussed generating MQL, SQLs, role of marketing, role of sales, organization setup, hiring, compensation, etc..

The insights below are from Pallav, Varun and Paras – however, for purposes of confidentiality it does not state which company has done what specifically.  The below insights could have worked at one or multiple of these start up organization:

Leadership

  • The founder is the first sales person
  • “Founders must obsess about things that they want their teams to obsess about”.  One of the founders believes in Content Marketing and has written 180 articles himself.  Another founder is a strong believer in leading sales, and the third in building quality software himself.

Getting your first few customers

  • “Marketing is about finding channels that give volumes / returns relative to cost of the channel.”
  • What worked for initial sales was to work on “influencers”.  Identifying experts on various in-depth forums and working on them as initial customers.
  • Product is not different from “sales”.  The problem of sales comes only when the products’ value is not known – when the team doesn’t even know if the product should exist or not on this planet.  Do customers really require it?

 

Managing the Sales Funnel

  • The start-ups give a lot of focus to containing “churn”.
  • Converting site hits is monitored in a very rigorous manner by all founders.
  • Once the free trial starts, the impression formed in the first 2 minutes is critical.  Customers should not get a whole lot of options.  Its  a minimal set of 1 or 2 options so that making decisions on how to proceed is a no-brainer.
  • Its difficult for the customer to give large commitment at once – so try to get their commitment in small steps … and then get them truly engaged with the product.
  • Sales and trial requests are managed rigorously.  There are both automated and manual communications that go to potential customers.

Marketing

  • The marketing team has used among other initiatives –   SEO, Content Marketing and word of mouth.  Content Marketing has been used very effectively.  The articles have to be well written and the product has to be pitched subtly so that its value is understood and appreciated.
  • For SaaS software, the sales person is more of a “sales enabler” rather than an outright “sales” person.  Marketing and the Product do most of the work.  “Sales enablers” need to describe product features and not really sell.
  • One of the organization’s target market is the CMO organization, even though the person reached most times is an executive or a manager in that organization.  A lot of importance is given to reaching the users who will actually use the products – and not just the IT organization.
  • Drip marketing is also used effectively.  Information of a customer is collected in many ways.  E.g., you don’t ask the customer which industry they are from, but collect information on which demos they want to see and try to figure out the industry.
  • Offline conferences are more expensive.  One of these startups went for it only in their 7th year.

Building a Brand

  • Building trust and credibility with customers is crucial.  Its critical to have a website that speaks in the language of target customers (in the US and in UK).  Websites targeted at Indian customers and those targeted at US customers can be very different.  A lot of time is spent in identifying these differences and ensuring the website is culturally accurate.
  • All success stories are tracked and converted to case studies.  Potential customers are able to view success stories that are relevant to them and are from their industry.
  • Ensuring top class support, ensures that the brand continues to grow and strengthen.
  • Execution Excellence builds a brand.  Even though these are start ups, what really works for them is creation of internal Knowledge Banks.  EVERY mistake or gap a customer reports goes back into the Knowledge Bank and everyone gets trained.

Talent and Hiring

  • Ensure you are hiring good people, especially in Sales and Marketing.  When hiring at senior levels, e.g., a VP of Sales its important to know if he is working out or not right at the word start.  Taking 6 months to a year to figure out that he is “not working out” is a huge loss to a start up.
  • Get creative about hiring the talent needed.  One of these startups have used expats that have returned to India from various countries and do not want to leave their home state.    So, the recruitment team ensures that they hire Australian expats to support the Australia customers and UK expats to support the UK customers, etc.

It was enthralling to see the energy and wisdom in this young team.

Even as I left, a list of topics went up on the board.  Sales compensation was the top one and there were a few others.  Am sure the active discussion lasted for another couple of hours.

I left invigorated and excited.  Is there a way for these young, smart product companies and their founders to inspire and spawn a product culture in India?  Yes, I think there is and I for one am a believer.

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A product company can begin earning revenue only after the product is built.

A product company can begin earning revenue only after the product is built. Significant upfront investment is required in engineering and sales. As revenue picks up, expenses continue to mount for ongoing development and sales, and for establishing a new support team. It may take years before the company’s monthly receipts exceed the outflow. This is known as becoming cash flow positive. Adequate funding is therefore critical for a product company to survive.

As a rough estimate, a product business may have to invest anywhere from Rs. 50 lacs to 2 crores (USD 100K–400K) before they start selling. This is assuming that founders take very little salary. If this money is available somehow, the founders can concentrate on building and selling the product. If not, the company is forced to adopt non-ideal strategies. The previous chapter discussed options such as working on the product part-time, or generating cash by providing training, consulting or services. If founders have to multitask, it delays the product further, creating a higher risk for the viability of the business.

In the bootstrap phase, every rupee counts. Each aspect of the company’s operation must be optimally managed. At the same time, you cannot afford to compromise on product quality or delay the time to market. The two previous statements appear to be contradictory, but building a successful business is often about prioritising and choosing correctly between the conflicting demands.

The First Mile: Forming the Team and Signing Up Clients 75

For example, if cash in hand is an issue, PCs can be leased with conversion to ownership after 12–18 months. This is effectively like a loan (the interest is built into the lease cost). Hardware and software licensing cost can be reduced by using a common server and thin client for each engineer. You can have two servers to avoid single point of failure. Only servers need to be upgraded over time.

Making progress with limited funds is a struggle, but somehow enough money has to be made available through personal or angel funds, or some side business. With the right product, and after market validation with good customers and revenue, VC funding may become possible.

Can it be done differently? Let’s return to the film industry example. There are mega-budget movies in which producers spend enormous money on stars, sets, foreign locations and publicity. The film must attract a large audience, and earn hundreds of crores of rupees to become a super-hit. When that happens, the director is in great demand, and lead actors become superstars. If it is a flop, it is the producers who lose the most. At the other extreme, you have niche films that arrive relatively unnoticed or play in festivals. Made from a lean budget, the film may have an interesting script, excellent acting and good direction. The audience may initially be restricted to those who appreciate such movies, but it may grow by word of mouth publicity, making the movie a success.

Similarly, some entrepreneurs have conservative goals. For them, it is a lifestyle choice of being independent and having their own company. You will find many such businesses that are self-funded, largely debt-free, reasonably profitable and generating only modest revenue after several years. They usually provide a mix of services and one or two products. They keep adjusting their offerings over time to adapt to the changing market and available cash.

However, if your goal is to build a really successful company that gets acquired or goes public, then outside investment is almost a prerequisite. It is rare to achieve a revenue ramp that is steep enough to provide adequate cash.

A website offering advice and networking to entrepreneurs, StartupNation has designed an ‘Odds of Success Calculator’. The online tool rates a business based on eight risk factors. Interestingly, none map directly to the product idea. Two each are linked to the management team’s experience and market potential. But as many as four relate to finances: invested capital, difficulty in obtaining funds, quality of financial management, and degree of business planning. This indicates the importance of finances to achieve mega success.

There is no right or wrong goal—you just need to be sure about what kind of company you want to build and proceed accordingly. If you are ambitious, and are in fast growth mode with revenue exceeding Rs. 1 crore, then it’s time to approach institutional investors.

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

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iSPIRT Sales RoundTable – Startup Sales, Lead Generation, Channel Partners

First of all, huge thanks to Vizury for sponsoring great food and the premises to hold the round table. Many thanks to Aneesh, NRK Raman and Srirang for leading the session and providing valuable inputs. And of course, to all the participants for the energetic discussions and knowledge sharing.

Here are the key takeaways from my notes.  Please note that there are several nuggets of practical advice based on the experiences of the session leaders and the participants, and not just standard text book stuff. It was a great learning experience for me and I hope I can pass on some of it to you.

While we touched upon a lot of topics, we spent considerable time on startup sales, channel partners and selling to geographies outside India, and lead generation and qualification.

Read on to know more.

Startup Sales and Hiring Salespeople 

Best guys to sell during early stages of the startup are the co-founders themselves, even if they don’t have sales background.  Initially, you will stumble, but you will learn and figure out what works for you.  If founders cannot sell the product in the first 1 or 2 years, then you must seriously evaluate the viability of the business

Once you’ve made the initial sales yourselves, then you put in a structure. External sales guys need to have conviction in the product to sell it.  That will be lacking during the early stages of the company – but founders have that conviction.  Hence founders can sell better during the early stages.  One participant mentioned that for the first 3 years, he and his co-founder were selling and only later they looked at a professional sales person.

Getting the first reference customer is always the toughest part. One you have a reference customer, momentum will build.

Hiring an external sales guy is not a good idea at the beginning.  Identify folks from engineering and customer facing teams who have the aptitude or inclination to do sales and ask them to lead Sales.

Culture fit is very important in a sales person. Also, check if the person has spent 4+ years in a single company – that shows that he has been delivering results.  Sales people should also be pushing back to you.  This shows that they are getting feedback from the field and are informing you about market situation.

It is a good idea to raise investor money to scale up business development.  Investors are willing to invest in this once the product has been validated and you have a few customers.

You need to experiment to figure out what works for you. For example, for a company that made trading software, an ex-trader worked great as a salesperson instead of a seasoned sales guy, because the ex-trader was able to relate to the customer.

The sales person should have hunger and also have a good history of past successes.  Consider the age of the sales person too – in some industries, an older person might work better as the customers expect to see maturity.

Like pair programming, “pair selling” is also a useful thing to try.  This helps in DNA match, culture fitness.  Some companies have paired an account manager or a product manager with the sales guy.

In complex sales where there are multiple stakeholders from the customer’s side, ensure that you sell individually to all the influencers.

You need to pay close attention to how the customer buys.  Branding and marketing engine is also very important in “creating a desire in the customer to buy”.

Channel Partners (local and global)

When creating partnerships (in the context of channel partners and resellers) globally, be careful what works and what does not in that culture.

In general, partnerships work well outside your headquarters and you can have multiple non-exclusive partnerships.  People like to do business with a local person.

Look at the credibility of the partner.  Is the partner knowledgeable and up to date in your domain?  For one company, partnerships worked well in Brazil, but did work very well in Europe.

When you set up an office in other countries, you need to be aware of the labour laws regarding how easy/difficult it is to fire non-performing employees, taxation, accommodation etc.  Going with a partner alleviates all of this to a great extent.  However, you need to have someone from your team who is responsible for managing partnerships.

Remember that the main motivation for the channel partner is money. So make sure there is enough for them so you have their mind share.  Even if that means that the channel partner makes more money than you.  Initially, you need to be very involved so the partner tastes success. For example, you need to generate leads to the partner, go along with him to complete the sale and let him make the money from your efforts, initially. This will get them excited.

Similarly, if you want to have sales offices or channel partners in other locations, encourage well performing sales folks from headquarters to move to that location, stay there for a few years to set up processes, signup channel partners, hire local people and train them.

You can start by signing an MOU first and have some targets.  Then after 6 months of so, you can sign a formal partnership agreement.

One company also pays 20% of the salary of an employee of the channel partner.  Then you can have a joint business plan with your partner to set goals, metrics tracking etc.

You should look at your customer acquisition cost and consider pay a huge chunk (say 80%) of that cost to the channel partner.

While making sure that you do not have exclusive agreement with a single partner, be sensitive that having multiple partners in the same geography can lead to partner conflicts which in turn could be bad for your business.

Also, look at companies that sell complementary products. Maybe you can partner with them too so they make money by cross selling your product.

Channel partners are not really a must. If you can make your product easy to setup and use, then you can focus more on marketing, google adwords etc (e.g. SAAS models).  Also, in these models, you need to ensure that partners have good incentives as typically the ticket sizes are smaller and they don’t have opportunities to make money from “implementations”, training etc.  One company took an approach to let the partner decide the pricing in a particular geography with the agreement that a percentage of the revenue goes to the partner.

However, if the product is not easy and you need people on the field to educate the customers, you should definitely consider channel partners.

Sales Engine is similar to Engineering Engine

One of the biggest challenges faced by Indian product companies is that the founders do not have a sales background.  Our ecosystem has evolved to a point where we can build great products, but lack the sales acumen.  There was consensus among the participants that sales is much harder than engineering. Engineering, while no doubt hard, is still manageable.  We know the inputs, outputs, risks and mitigations with a high degree of certainty.  Sales is a different beast with lots of uncertainties.

Srirang guided us to treat the sales engine also similar to the engineering engine.

The three pillars for the Sales Engine are (a) People, (b) Processes and (c) Technology.

People: Competencies, Incentives, Org Structure.  As in engineering, there can be a magnitude of difference between an average sales person and a good salesperson.  So hiring the right candidate is very important.  And you have to set up the correct incentive program and org structure to ensure motivation and excitement in the sales team.

Processes: Strategy, Execution, Metrics.  Again, as in engineering, you need to define the strategy, the execution plan (who does what) and what metrics you are going to use to measure execution. 

Technology:  Enablement, Communication, Monitoring.  Sales team needs to be enabled.  For example, ensure flawless demonstrations and training to the sales people so their selling experience is smooth and they focus on the customer.  Use the right tools (e.g. Excel, CRM, SalesForce) to track and monitor their activities.

At different stages of the company, you need different kinds of pillars – which means you need different kinds of sales people, different processes and different technologies.

Lead Generation and Qualification 

The classic sales process consists of five stages:

  1. Lead Generation.
  2. Lead Qualification
  3. Relationship building
  4. Solution design
  5. Negotiation and Closure

Depending on the kind of product, some of the later steps might not be relevant, but lead generation and lead qualification are of primary importance.

Focused lead generation is better than generic lead generation.

Some companies have used databases of leads to generate leads and have found it useful for mass email campaigns.

LinkedIn is a good source to connect with prospects (with premium account, you can send InMail too).  After connecting, you can then try to have a call/skype to show your value proposition, if there is interest.

Someone mentioned that LinkedIn Ads worked for them.  On Google adwords, there were mixed reactions.  Some say it is costly, but it helps to put the word about the product. Google adwords can generate a lot of leads, but people also noted that there was a lot of churn from these leads (in the context of SAAS based business).

If you have a horizontal product, make a vertical offering. Your campaigns have to industry specific and you should talk their language. Customers are looking for a reference customer they can relate to.  This produces better results than targeting all verticals with a horizontal positioning.

Metrics is very important in the sales engine.  You must be measuring and tracking customer acquisition costs. And track them at various stages of the sales funnel.  For example, let’s say you generate 1000 leads, out of which 600 are then qualified, 400 of them get to proposal stage, 200 get to negotiation, 150 closed and then 130 retained for renewal.  At each stage, you must count the man hours spent and put a cost for that.  This will help you improve your sales processes – particularly in the area of lead qualification as you can see what kind of leads are working and you can pursue folks who are likely to buy.

The first step is to establish Qualification Criteria. Then evaluate each lead and assign score to lead based on the qualification criteria.  Based on the score, put the lead in one of three action buckets – pursue, drop or nurture (i.e. keep warm).

Also, ensure you pay attention to negative attributes to qualify leads based on your experience and judgment – e.g. if a company has greater than 2000 employees, then they might not be suitable to your business.

Don’t take up a wrong customer at startup stage. It can be a drain on your resources.

There are three main aspects of lead generation.

  1. Publish
    1. Blogs
    2. Website
    3. Industry Magazines
    4. Whitepapers
  2. Promote
    1. Speaker in conferences
    2. Advertisements
    3. SEO
  3. Connect
    1. Email
    2. Cold call
    3. Road shows
    4. Referrals
    5. Social Media

Conclusion 

The discussions “raised awareness” and provided lots of data from practitioners.

The key thing to remember is that there is no silver bullet and what worked for someone else may not work for you. Kishore Mandyam went one step further and said that what worked for them six months ago might not work for them now!  While there is no magic wand, you can look at general guidelines and best practices from the experiences of 20 odd practitioners.

If you have any more tips or best practices, please do write them in the comments section.

Tweetable Takeaways

Best guys to sell during early stages  are the co-founders, even if they don’t have sales background. Tweet This.

Getting the first reference customer is the toughest part. One you have that customer, momentum will build. Tweet This.

Channel partners should make enough money off you. It is OK for them to make more money than you. Tweet This.

Invest in channel partners so they invest in your product. Tweet This.

Sales Engine is similar to the Engineering Engine. Tweet This.

If you have a horizontal product, make vertical offerings. Industry specific campaigns work better. Tweet This.

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The One Feature That Changed Social Networking Forever

What is the single most important innovation that Facebook ever came up with?

Before I answer that, let’s think of the real value for users on a social network. Social networks are a classic example of the platform business model where users create all the value and there is very little value until users come on board. Real value for every individual user, then, is the value that his network is capable of creating.

Most communication and networking products have never truly succeeded in capturing this value on an ongoing basis. E.g. I might be connected to a lot of users on a communication product but I need to be actively engaged in a conversation to benefit from these connections.

This is why the News Feed is Facebook’s most important innovation. It allows users to constantly benefit from the surge of activity in their network neighborhood. It’s a stalker’s delight, a lurker’s guilty pleasure. But the News Feed is the single most important innovation that changed social networking from a user-centric to a network-centric activity.

It changes the use case for an entire product category. Post the News Feed, social networking was no longer about staying connected with a friend or even with a group. For the first time, social networking was about staying connected with one’s entire network.

The move from transaction to engagement

The News Feed represents a leap in the evolution of online communication and networking products. Online communication and networking have traditionally been transactional in nature. Email has always been a transactional product. Chat is transactional as well. We use these products only when we want to engage in an actual exchange (of information) with someone else.

Early social networks were built along the same lines. Imagine the days of Orkut, Bebo and, even, MySpace. Social networking, back then, was an extension of the existing communication models around email and chat. You typically logged on to connect with friends. If you didn’t want to connect with friends, you just never logged on. The dominant use case on these social networks was transactional.

The News Feed changed that! It moved social networking from a transactional use case to an engagement-driven use case.

Engagement products need to provide a minimum guarantee of activity to keep the user engaged. Transaction products, in contrast, need to ensure liquidity and the assurance that the user can complete a transaction conveniently.

If you think of Facebook pre-News-Feed, users used the platform largely to communicate with others. The News Feed shifted value in the platform from mere connections (and communication) to content (and engagement).

First among equals? 

By no means is the news feed the only determiner of engagement on Facebook. The decision to allow developers to build out an app economy on top of Facebook and the creation of social use cases on top of Facebook (most notably gaming and gifting), clearly helped the engagement cause. However, across all initiatives that Facebook ever took, the one that has been most persistent and that eventually took over as the default home screen – the first ‘feature’ that a user is exposed to on every log in – is the news feed.

The representation of the network effect

In traditional social networking, the feature that the user kept returning to was his own profile, with some notifications alerting specific network activity. This is why having the News Feed as the default Home Page is rather important. It changes social networking from a user-centric to a network-centric activity.

The News Feed embodies the very concept of the network effect. It shows that the network effect isn’t simply a function of the number of other nodes you are connected to but also of the nature of the links that connect you with them. A user’s past interaction with other nodes is a great determiner of the strength of ties between nodes. A real world network would have certain ties stronger than others. The news feed captures this and creates a user-centric view of the network.

This is also why I believe Facebook deserves credit for pioneering the news feed. An activity stream or news feed like feature was already present in Twitter, and before that, on Flickr. But these never gave an accurate representation of the network and were at best, mere activity streams aggregating the activity at neighboring nodes. There was no focus on the nature of the link with neighboring nodes. This is where Facebook’s focus on optimizing the news feed algorithm creates a more accurate representation of one’s network than ever before.

A stronger network effect? 

One might argue that the news feed also creates a stronger network effect. With traditional social networks, you could have a few hundred friends but it was arguably the same 10 friends bringing you back to the platform. This meant that losing those 10 friends to another platform could signal the need for you to make the move as well. With the news feed, a stream from a much wider circle of friends constantly hits you. When the central use case shifts from communication with individual friends to interaction with the overall network (via the news feed), it could potentialy make the network more resilient to a situation with reverse network effects.

Beyond social networking

Moreover, this doesn’t apply only to social networks. Any business model which relies on user-generated content can benefit from a well-architected news feed. Even marketplaces, which have traditionally been transactional, are creating engagement with a news feed.

Design principles

The key design consideration is relevance. A news feed should help with personalized discovery. This introduces another tension. Relevance and personalization often tend to reinforce things that we are already interested in. A personalized feed should factor in some form of serendipity to ensure that users do not get increasingly served only those objects that reinforce their preferences. (Designing for serendipity is far from trivial and merits a post in itself, sometime soon.)

If you’re building a networked product, think of what embodiment of the network can be delivered to the user. The News Feed is brilliant because it takes a user’s network and individual actions and builds out something that results when the two are superimposed on each other. This is exactly how our social experience works in the real world. Our world is shaped by a consequence of the actions that we take with our environment. None of that is, of course, simple enough to be replicated through a mathematical model. But the news feed is a great approximation.

Tweetable Takeaways 

How social networking moved from a transaction-first to an engagement-first model.Tweet This.

How to build products that deliver value from network effects. Tweet This.

The one feature that transformed social networking forever. Tweet This.

Design principles for building products that capture network effects. Tweet This.

This article was first featured on Sangeet’s blog, Platform Thinking (http://platformed.info). Platform Thinking has been ranked among the top blogs for startups, globally, by the Harvard Business School Centre for Entrepreneurship

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Fellow Entrepreneur, Ask not what the Buyer can do for your company!

For about 2 hours in the RoundTable session, the intense discussion was centered around how to be ready for M&A. Buyers, who have an interest in your company will ask about your product, your markets, your customers, your revenues. As an Entrepreneur, what is your first ask in return? Usually they are any of the following. What will the buyer pay us? Is this the right time, should we wait for a better valuation? What will the buyer do with us post acquisition?

Jay Pullur, CEO, Pramati Technologies, helped us realize, that the first question should be, what will our company do for the buyer? What is the fitment of our product or solution in the buyer’s vision? You need to ask and most importantly answer this yourself. Don’t expect the buyer to answer this, if you are, then you are not ready for any deal. It was a moment of epiphany. Fellow Entrepreneur, the first step to readiness for an M&A is to ask, what your product does to the buyer’s company, not what the buyer can do for your company.

Four hours of entertaining stories by both Jay Pullur, Pramati Technologies and Sanjay Shah, Invensys Skelta, 12 companies and about 20 participants got the opportunity to interact and learn many of the wise nuggets from these industry leaders. Not all elements of the session can be reproduced here, but below are some of the key highlights and learnings.

Wise Nuggets – Its all about Knowing (see below for details)

Wise men plan ahead. The pain or the gap that your company addresses should itself be strategically planned. Positioning your entire company, like a pretty bride will ensure the suitor will come. According to Jay, technology buyers in the US do several acquisitions in a year, so for them its just another transaction, they are not emotional about it, not attached to it, its just their job. So the interests of the suitor should always take precedence, otherwise the suitor will move to the next company on the list. Sanjay added that using an iBanker to help you in the match-making process or to source the right type of buyers is also a very beneficial activity. To sum it up, like for any Sale, Seller has to make it absolutely comfortable and easy for the buyer to buy. The checklist includes, but is not limited, to the following.

    • Know or Define the right fitment (addressing the GAP in the buyer’s arsenal is most important)
    • Know your Position (be clear on the landscape and position your product very clearly)
    • Know when to exit (constantly guage the pulse or the sentiment of both the market and the buyer, macro-economic conditions can play havoc, sense the weight of an opportunity)
    • Know your Buyer’s problem – Demonstrate that you know the Customer’s Exact Problem (POC, Story boarding the Pitch and strategy all come into play)
    • Know your Product (Don’t use flowery language and adjectives- show the customer, you are only solving a pain – which is not a glamorous job to do)
    • Know your Buyer – Gauge the buyer’s impending need to buy (They will usually reciprocate with the same rigor as you)
    • Know the Competitors, their strategies, their features, their benefits and most importantly their weaknesses.
    • Know your-self (You know that you have built a rocket or a rickshaw – if you are in a rocket, you should be on-top of the short-list)
    • Know your price (indicative pricing is most important – make sure all research leads to a best possible quote)
    • Know how to close (all the criteria for success should be met, there is no alternative for preparation and effort)
    • Know your readiness (systems/processes for closure, like record-keeping, employment contracts etc)
    • Know what the deal entails (who brings the deal – may be an iBanker, upper thresholds, lower thresholds, etc)
    • Know your Organizational structure (are you are platform, are you embeddable, do you need domain expertise)
    • Know the parties and their motivations (Eng Team in California v/s CFO in London – who is the deal maker, who is the deal breaker)
    • Know the term-sheet (if not hire legal guys or ibankers who can help).

Insights and Learnings

There were many learnings, which definitely are tied to the personal experiences. Some of the key ones are

When Jay sold Qontext to Autodesk he found them to be extremely professional and did not find any price penalty, or discrimination, because of the Indian-ness of it. In fact, he was able to sell it for a very good multiple. The best valuation/revenue multiple silicon valley companies to could get. So its a myth to think that a technology product from India, might get the raw end of the deal.

When Sanjay sold Skelta to Invensys, he understood the weight of the opportunity. Even though the conversation was not intended for M&A, both parties realized that its mutually beneficial to do so within a couple of hours of conversation.

Sanjay’s additional advise, raise adequate money at a comfortable time, and continue to stay relevant via media briefings, etc all the time.

    • Other general learnings were also discussed. To note a few,
    • Learn about Earn-outs, ESOPs, Liquidation Preferences (Be real to scale)
    • Invest if you have clarity on Exit (do everything possible for the deal to come to a fruition, POC, be aggressive, call the CEO if needed)
    • Learn about Black duck tests, acqui-hires, escrows for indemnification, etc.
    • Define the outcome post M&A and get consent.

Conclusion

Overall M&A stands for all your Moves & Acts. Its all about the Story, your clarity of all the characters and props in the story, and their acts. Commercial success is most important, direct accordingly. Re-takes’s are possible, in-fact easier provided you make your first venture successful.The hilarious moment and the most catchy line came from Jay. Someone asked about honesty and truth, during the process of due-diligence, for which Jay laughingly said, “Tell the truth with such conviction, that the buyer will lie to himself”.

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Are you a #MadeInIndia Software product company with solution built on SMAC stack that sells to Enterprise segment?

If yes here is a great not-to-be-missed opportunity for you to explore partnership with Zensar Technologies….then Read on.

Zensar Technologies is a technology partner of choice for global organizations looking to strategically transform, grow, and lead in today’s challenging business environment. ProductNation is pleased to partner with Zensar to make this opportunity available for Indian Product Startups. Zensar is looking at hungry, innovative product startups that have built exciting products based on SMAC(Social, Mobile, Analytics & Cloud) technologies from India and showcase them to their Leadership Team, with a goal of offering these innovative products for their existing customers, prospects and partners

Details of Zensar TechShowcase are as follows: Date: 7th September 2013 (Tentative), Location: Pune

  • Format 40 minute slot, with 20 minutes of demo cum presentation, followed by 20 minutes Q&A session for about 12 companies. Expected to be a full day event.
  • Audience – Leadership Team of Zensar and Key Vertical heads.
    • Areas where the Zensar is looking for Products – Mobile Solutions, Mobile Analytics, Device Management, Social networking, Web 2.0, Application Integration, Intelligent Customer Interaction Solution, partner interactions, and internal business processes. If you have an area which is not listed here, please do send us an email at showcase(at)pn.ispirt.in

What you get? An opportunity to showcase your product to one of the leading technology companies which has customers across the globe. More details can be found at www.zensar.com

  • An opportunity to get feedback about your product from the team that engages with enterprise buyer community, giving you great inputs for your future engineering and design decisions
  • An opportunity to partner and take your product to international markets. And all this with no sales qualification cost!

Interested? Great. Here is how you can participate:

  1. Provide the information desired in the online form by 20th August 2013(Now extended to 23rd August 2013). Completed submissions will be sent to the Zensar for short-listing and selection by 30th August 2013
  2. A selection committee will peruse the submissions, and based on their need and interest, will shortlist a set of 10 to 12 companies, and invite them to be present at the  Zensar TechShowcase Event, on 7th September 2013
  3. All expenses for the participating in this event will be done by the participants themselves. Zensar will provide the venue, and the audience.
  4. There are no participation charges for this event.
  5. If you have already provided information about your product for the ProductNation OutSights, please do send us an email at [email protected]

If you have any questions, please write to us at us at [email protected] and we shall try to answer them.

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Patent Holders Listen Up; The Government Wants to Give You An Award

India’s innovation problem is not something that an award can fix. But its a step in the right direction. The department of science and technology is calling applicants for the “National Awards for Commercializable Patents,” in a bid to make more innovative products available to the society [source]. The awards were first introduced two years ago.

The program seeks to recognize the innovative potential of Indian Nationals as well as Micro, Small and Medium Enterprises (MSMEs) who have developed innovations relevant to the industrial and societal needs.

The award will carry a sum of Rs 5 lakh and a certificate. Selected innovations may be also get an additional Rs 5 lakh on commercialization of the awarded patents. The selected innovators will also get to use the the TREMAP, a government initiated innovation program.

The primary objective of the program is to help commercialization of patented technologies and will give a greater emphasis to those that have good commercial potential but could not be commercialized due to lack of resources and expertise with the inventors. The other objective is to establish an enabling ecosystem in the country to facilitate linkages of the innovative technologies with market.

Any Indian national or micro/small /medium enterprise who already has an Indian patent can apply. The year of grant of patent should not be before the year 2010 and the working prototype should be ready.

In 2012, the award was granted to 8 patent holders including the ones that held the patents to improved grinding machine for paste and powder making in wet and dry condition of soft material and device for mitigating shock waves and induced forces during explosions.

The last date for receipt of applications is August 14, 2013 and more details and the forms can be found here.

The central government has also implemented a five year scheme through which small enterprises can claim up to 50% of patenting costs from the Government.

There are various reasons why commercial innovation is really low at Indian institutions. Deepam Mishra, CEO, i2india Ventures lists out factors including wrong incentives and lack of early stage investments among others. Hopefully, these initiatives will help at the early stage.

Reblogged from NextBigWhat.com