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The secrets of succeeding in the Indian SME Market – the iWeb Story

ProductNation caught up with Akshay Shah, founder and COO of iWeb Technology Solutions to understand how they have been successful in serving the Indian SME market. Akshay says that the ability of their company to provide customizable business solutions at affordable prices is what has led to their success. Read on…

What was the main trigger to start the company? 

The journey leading up to starting iWeb in 2005 is quite interesting. I come from a family of chartered accountants. I was well on my way to pursue CA as my occupation, after my B.Com. While preparing for my CA intermediate exams, I had some free time. During this time, as a hobby, I started following the dot com boom in the US and developed an interest in how Internet was impacting businesses and people.

Around that time, I happened to meet the CEO of a well accomplished IT business firm in one of the conferences. He heard about my interests and checked if I could help his company out in consulting with customers to deploy SAP solutions on a part time basis. The offer seemed interesting to me and I started to work part time. As I started interacting with customers and understanding the product, I very quickly realized that there was a huge disconnect between the features offered by the vendor and the price points at which they were being sold. I understood that there was an unmet need, particularly among the SMEs who wished to automate their business processes using IT.

This was the trigger for me to start thinking of starting iWeb. Along with Ketan Trivedi, my father’s friend, who also is a CA, we tried executing small projects for customers who we obtained from our contacts. The chemistry between Ketan and I seemed to work well. Also the initial work seemed to validate our thought process. Hence we started iWeb in 2005 formally to offer business solutions to customers.

The ERP products/solutions space is usually perceived as a mature and crowded marketplace. How have you managed to build a scalable and sustainable business in this area? 

This perception holds good for VCs and investors who are looking at exits and non-linear growth in a relatively short time dimension. However, in the long term, this will be a very lucrative business, if you play it right. If you analyze the SME market in India today, you will notice that effectively only 5% of the market is automated. So, there is a large scope for many vendors, including the big players to go after the rest.

The issue is not about the availability of market, or access to it. The key challenge in addressing the reminder of the untapped market is to be able to provide customizable solutions at affordable price points. It is here that we believe we have been able to crack this puzzle.

Can you elaborate on how you solved the puzzle? What mistakes happened during the process and how did you overcome them? 

From the beginning, we were pretty determined to build the entire ERP suite. In this zeal, we started to develop all the required capabilities of the product in parallel. However, we soon realized that during the startup phase, we could not manage development as well as customer acquisition with equal ease. We had bootstrapped ourselves and had no external capital infusion till last year. Hence we started selling only the CRM module to begin with, and over time, as we obtained a level of maturity in implementing it out for a few customers, we started paying attention to developing and selling the reminder of the modules.

As our customer base increased, our experience in understanding their requirements also increased. We realized that in the SME segment, business processes across enterprises would not be standardized. So, to be able to still get them to buy our solution and benefit from it, we had to build our product to be customizable to their requirements, and be affordable at the same time. These requirements led us to develop a powerful differentiating capability through our AgilewizTM framework that helps us deliver customized multi vertical and horizontal application solutions across different business lines with minimal amount of deployment time.

The beauty of this approach is that even a non-techie can use and configure a solution of his requirement. This approach helps us eliminate the requirement of highly skilled IT professionals needing to deploy solutions to customers. Customers benefit from it, since it reduces the cost of acquisition of our solution. In summary, over these years, we have evolved our product line and built sustainable business by focusing on providing customizable solutions at affordable costs to the SME segment.

What role have channels and partnerships played to help your sales?

You could say that the biggest asset for iWeb today is the partnerships we have built with other companies and individuals. They are a key factor in scaling the business, specifically for our country that has diverse customer requirements. It is also a relationship that we have built by valuing their domain skills. We are very transparent in all our dealings with partners. We strive to make our partners successful by sharing best practices of implementation through our network. As an example, one partner in Indore may reuse the artifacts developed by another partner elsewhere, reducing his time to deployment. This collaborative nature of relationship has helped us to a great extent in obtaining customer wins.

You have recently announced that you are diversifying as a software services provider, offering SaaS / PaaS type of solutions. What is the thinking behind this move?

The intent to diversify from being a pure product/solution company and enter into providing services via the SaaS / PaaS route is driven by two considerations. Firstly, we want to leverage the benefits of emerging technology and pass the benefits to our customers. Secondly and more importantly, moving to a Saas / PaaS based platform will help us provide better support to our existing set of customers. So you could look at this as our play to retain existing customers and build further to address their other needs.

On a different note, iWeb as a company and you as its founder have received multiple accolades internationally and at national level. What does this mean to you as a person, and how does this help your company?

Recognition from various forums such as the MIT TR35 or being selected as one of the top 50 emerging companies by NASSCOM certainly motivates self and the company in a big way. Firstly, it validates your belief and play, paving way to many business leads. Sales cycles will get much simpler because your prospect now sees you as being credible. Secondly, at a personal level, it is a huge confidence booster, and energizes you to go further your ideas to the next level. I would say that most of our largest breakthroughs in terms of customers or partners’ acquisition have happened on account of this.

What message would you like to give to potential product development entrepreneurs? 

Off late, I see youngsters, specifically those graduating out of MBA colleges taking to entrepreneurship primarily because they see it as a cool factor or as a style statement. They do not seem to be prepared for the long haul. So, my advice to any entrepreneur thinking of getting into a software product business is to do so, only if he or she has a burning desire to solve a real problem – a problem which is causing him or her to have sleepless nights. One needs to understand that the journey of entrepreneurship is not a bed or roses, and you get to do everything else other than what you wanted to do. One should be mentally prepared to face these uncertainties and ambiguities – and be passionate about the idea, have the patience and perseverance to take it to a logical conclusion, come what may. Only then, it makes sense to go this route.

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Why every start-up needs a repeatable & scalable sales model?

Start-ups in their mid-growth stage are usually faced with an inflection point, where they find themselves standing in the middle of a transition – from having a bright product idea endorsed by a handful of people (usually investors & early customers) towards a scalable solution that can be sold to anyone.

Geoffrey Moore’s work in the book titled ‘Crossing the Chasm’ is pertinent to this transition that exists between early adopters and the early majority of a product in the technology adoption life cycle. Companies having a logical and repeatable sales process, backed by a validated product can succeed in any economic scenario.

Initial sales can help a company in determining whether the product/market fit is in place. The next and the most crucial step towards achieving scalability is to know that their product requires little to no customization to go from 1 to 10 to 10,000 customers quickly. Start-ups need to have a consistent process in place, which is embraced by the whole team to ensure smooth execution. This, in turn will help in having an element of predictability in the decisions and forecasting that the entrepreneur makes. The most essential characteristics of an ideal sales process are scalability, repeatability, and sustainability.

Most start-ups have developed somewhat of an ad-hoc sales process. That is, they have a process that they follow, though there isn’t any documentation for the same. For instance, if in a small sales team, all sales reps are asked about the process that they follow to approach and close a prospective client, one can be sure of coming up with a number of different approaches. At the core of such approaches are processes which are, more often than not, inconsistent with one another’s and sometimes not even in sync with the company’s vision. The key to scaling the sales process is establishing a well-documented and clearly repeatable process which can be adopted by new hires from day one, which makes them as productive as the existing sales team.

Once such a process is put in place, it is easier to establish a predictable, direct relationship between increasing the size of the sales team and targeting more geographies on one hand, and increased revenues on the other.

These are the most natural benefits of having a repeatable sales process in place for any start-up:

Enables closed-loop learning

Ideally, the sales process should begin with leads being generated from the inbound marketing team, and conclude in a closed-loop manner with feedback from the end-user. This setup makes sure that all the stakeholders are involved throughout the process, and also facilitates organization-wide learning and development.

Takes funnel metrics into consideration

It’s important to know the kind of conversion rates one is experiencing at every stage of their sales funnel and what are the various factors that affect these rates. For instance, different lead sources can result into different kinds of conversion rates. This kind of analysis is also useful in determining the most cost effective, or cost ineffective customer acquisition channels and can help in improving the marketing ROI.

Takes into account the Return on Investment

As most start-ups are bootstrapped, Return on Investment (ROI) becomes a significant aspect to watch out for. Only in case the expected value of business over the anticipated duration of a customer’s association with the company is manifold vis-à-vis their initial acquisition cost, is the association economically viable.

For any sales process to be scalable, it’s essential that the marketing function is identified as the primary source for fresh leads and it is well understood within the company that the primary job of a sales person is not to create new opportunities, but to sell and close business where such opportunities already exist.

Guest Post by Mohit Sharma – Lead, Marketing & Business Development function at PromptCloud. PromptCloud is a Bangalore-based firm dealing with Big Data solutions; where an integral part is large-scale web crawling and data extraction. It uses its cloud-based Data-as-a-Service (DaaS) engine for performing big data acquisitions. Views expressed are his personal, and do not necessarily reflect those of his employer

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M & A – The most preferred option to grow in uncertain times

It is a typical Monday 9 AM! Ready to kick-start another challenging week! Fine day in Chennai !! Not so hot like a typical Chennai climate. But, for first generation entrepreneurs it is an ordeal to pass thru weekly pressures of Cash flow, Attrition, New business and opportunities etc. etc. This experience is collectively described as “Monday Morning Blues”.

The growth dilemma

There has always been a great dilemma for entrepreneurs during fund raising exercise especially when it comes to taking the company to the next level of growth. The dilemma does not stop by simply raising the money for growth, but it goes on till such time one is able to strike a balance between how much stakes to dilute and the tangible benefits that the venture will get.Then comes the business and revenue models. The previous eras have brought countless innovations in the theory and practice of running businesses. Many are now staples of contemporary management, but others were ephemeral distractions that led companies down the wrong roads. Too often, leaders have sought the appearance of success rather than its reality – size for the sake of size, book-keeping profits as opposed to intrinsic value, earnings growth manipulated to please the stock markets. This era’s changes are already redefining management theory and practice. Raising competitiveness intensity forces a return to basic again. Going down to basics today means first and foremost focusing on how you can create intrinsic or fundamental value for your business. Your ability to create fundamental value rests on how good you are at finding the right balance between your external and internal realities and your financial aspirations; in other words, how skilfully you develop and use your business model. The major reason to focus on the fundamentals is that growth won’t come easily. Organic growth will not often produce the double-digit gains that were routine and even obligatory in the last era.

Leaders who hope to grow their way to success through mergers and acquisitions in the present market scenario are left with umpteen no of options. Needless to mention that M & As promises to increase economies of scale and yield efficiencies from synergy – or at least show the kind of revenue growth that looks like progress. And some players thrive by picking up battlefield causalities on the chips and hammering them to shape. Many people viewed General Electric’s acquisitions in the late 1980s of troubled RCA as a misconceived diversifications ploy. But after selling off RCA’s consumer electronics and aerospace businesses, GE wound up with NBC for a song, turned it around and went on to build it into a network powerhouse. NBC generated significant profits year in and year out, and with the addition of Vivendi Universal’s entertainment assets which greatly helped GE’s future growth.

The courage to change

Many first generation entrepreneurs lack with the intelligence to recognize that they have reached a crossroad but don’t follow through and head down the new path. Their inner core isn’t tough enough to allow them to acknowledge and deal with an unpleasant reality, whether it is closing a loss making division or taking realistic look at the business model and tweaking to market expectations. Many would like to continue in their comfort zone of their familiar managerial routines and protecting their pay checks. They may be afraid: change means taking risks and taking risks raises the possibility of failure. The fear failure occupies most of entrepreneur’s growth dilemma of raising money, divesting their stakes and working under a different management culture.

These entrepreneurs often don’t recognize that failing to make a shift can be riskier than making none. The entrepreneurs who have the appetite for tough actions have the inner strength. They are willing to look at clearly at the business model that has been highly successful and is no longer relevant.

To raise funds for growth or get merged is a difficulty and at times too difficult to get consensus from founder/ promoters. This leaves the emerging organizations with fewer options such as the following:

  1. Tag along with a bigger player and pitch for bigger contracts – on a case-to-case basis
  2. Dilute promoters’ stake heavily and raise money from PEs or VCs at the cost of losing control of the company in your eyes and also not knowing the business outcome after fund infusion
  3. Be a captive IT Partner for a big group and get acquired by them eventually once a decent value is built. The flip-side to this approach is that one does not know the time it will take to realise decent value

The current era of business offers promising option than the usual organic growth for entrepreneurs.

M & A – The most preferred option to grow in uncertain times

While an acquisition may have higher risk of failure than any other expansion strategy, it also provides a much superior return profile in comparison to organic growth strategy. M & As is intrinsically risky and predicting the aftermath of any acquisition is almost impossible. The fact remains that predicting the aftermath of any business plan execution is also an impossible task. But there are learnings from the past that can mitigate the risk of failure. Most M& A s fail due to inadequate articulation of two key enablers of a deal: transaction management, which is all about paying the right value, conducting a thorough due diligence and appointing the right transaction adviser; and integration management, which is about devising a detailed integration strategy ahead of the buy decision to keep the rationale of the acquisition intact. The fact of the matter,however is that any corporate strategy can go bad despite putting safeguards against any possible fallout in future. And so can simple business decisions related to marketing and research and development will lead to unpredictable business outcome.

If there are precedents where shareholders’ wealth has been written off as fallout of ill-planned M & A, there are more than a handful of cases in history through well executed M & A strategy that delivered immense value to share-holders:

  1. IBM’s market value of USD 227 Billion has been created virtually through acquisitions. It has acquired 187 companies since 200 for about USD 200 billion
  2. SAP has made 5 major acquisitions since 2001 for a whopping sum of USD 20 billion to reach its current position of Euro 17 Billion
  3. Cisco built the current sales turnover of USD 47 billion from USD 4 billion in 1996. Cisco has acquired more than 450 companies since its inception. Cisco’s fundamental growth strategy has been M & A
  1. GE has acquired more than 18 companies since 1952 ranging from Aerospace, Process Industry, Financial Services , Healthcare for whopping sum of USD 14 billion to reach its current revenue of USD 150 billion
  2. Exxon Mobile, It is what today on the back of a merger between two energy giants which clearly didn’t happen without the risk of failure in 1999. Exxon Mobile has surpassed Apple’s market cap and reached the USD 385 billion in April 2013.
  3. Maersk has acquired P & O Nedlloyd in 2005 to create one of the largest shipping lines in the world.
  4. P & O and Nedlloyd were merged together in 1996 which was yet another record in the history of shipping lines.

It is all about convincing the company’s management on the risks associated with a strategy like M & A on the back of statistics of successful transactions.

The entrepreneurs who are looking at raising money must do the following reality check and decide whether M & A is an option.

  1. Research and evaluate your competition
  2. Measure share-holders value year-on-year and see whether it is increasing
  3. Your ability to raise funds and offer significant returns within a short period of time e.g. 3 years to 5 years
  4. Ability to devote time on innovation and offer more customer value

The IT/ ITeS industry are moving towards consolidation and better economies of scale and efficiencies.The market is swamped by competition and the technological advancements are determining new way of delivering customer value. Therefore, IT services companies have to seriously consider M & A as their growth strategy to protect investor’s wealth, IP, customers, business.

Guest Post Contributed by Rangarajan Sriraman. The views expressed in this article are personal. The author is a serial entrepreneur, mentor and strategic advisor to start-ups in IT and ITeS segment based in Chennai and has been involved in 2 start-ups so far from the concept to execution stage and later on successfully exiting.

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Oogwave gained insights from CIOs at the 8th #PNMeetup

5 CIOs/Mentors, 2 startups showcasing their products, 12 good listeners and a rainy Noida morning at Adobe campus. We had a different setting this time, 15 minute of product demo and 60 minutes of quality one-on-one with the CIO community. We had two startups – Gaurav Jain, Founder & CEO of Oogwave & Vikram Bahl, Founder & CEO, Yavvy who got mentoring/guidance on their product strategy, Go-To-Market (GTM), scaling and sales among other things. Sharing some takeaways which Oogwave shared with us.

Oogwave is the content sharing platform for Enterprises, albeit the medium sized ones, and they wanted a ‘peek’ into a CIO’s perspective in order to better position themselves in the crowded market-space.

Some of the takeaways from the #PNMeetup were:

The biggest takeaway for us was that we do not need to necessarily focus on smaller/medium companies and if we are able to increase productivity, the CTOs of larger companies are more than likely to take notice, especially if we can reduce the total cost of ownership.

As we are in the business of becoming the platform of choice for enterprise collaboration, it’s priceless for us to gain insights into priorities in a CIO’s scheme of things. So while we do employ all the right technology for data security and already work on the principles of compartmentalization and least privileges, we hadn’t given much thought towards getting ourselves ISO certified. It really helps to know we can improve our prospects substantially by demonstrating that we have adequate process maturity and robust safeguards to ensure data security in line with industry standards as per ISO.

Sitting across country’s top CIO’s is quite an elucidating experience, but at the #PNMeetup we additionally got to interact with other passionate young entrepreneurs. This invigorating passion improves everyone’s morale especially when the going is tough, which is not that rare when you are an entrepreneur fighting to carve out a niche for yourself and your product. Talking to fellow product creators, understanding their challenges and accomplishments, builds up a camaraderie and is great for the startup ecosystem in the sense of building ties and establishing mutually beneficial relationships among entrepreneur community. Gaurav Jain, Founder, Oogwave

We hope to build this program on a monthly basis. If you are interested to be part of this program, do share us an email at pnmeetup(at)pn.ispirt.in

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Sell in the US from India or establish a beachhead abroad?

If you asked me this question five years back, I would have said unequivocally that you have to establish a presence in the US if you want to do business here.  My thoughts on the subject have changed. I believe the answer is, it depends. Let me explain.

Since it is the risk-reward equation that tilts the scales in favor of one vendor over another, we have to start out by thinking about how the buyer perceives you, the vendor. Buyers at this point are very comfortable and familiar with the onsite/offshore model for services. In fact so much so that one can argue it is largely a commodity. In such an environment, it is possible to do business overseas with little to no onsite presence. In other words, if you are a services company, offering services that the client is largely familiar with, you can get traction operating remotely with limited travel. In addition, one can design a low-risk services pilot very easily for the customer to try out a vendor. But what if you are a product company or offer non-traditional services? This is where it gets interesting. 

Is the pain real?  

Founders of companies tend to look at their world through rose-tinted glasses. The solutions that they have created, in their view, are the best thing since sliced bread. While this cheerleading attitude is admirable in a CEO/Founder, it might require a reality check before you launch in a new geography. If the perceived pain for which you are providing a solution is not yet felt, then buyer education is required. Your challenge as a seller is to move the pain from perceived to real. This is hard to do remotely. One of my old clients is a company that has an outstanding solution, the problem they had was the pain that they were addressing was something their buyers in the US really did not perceive as active pain. Despite repeated monthly trips by the CEO and promising leads, a sale did not happen. They needed to create an eco-system, or as my old boss called it, a “web of influencers” in the US BEFORE a sale could even be conceived. Doing that needs time and investment. This is not a message founders and CEOs want to hear, but this is reality. 

Is the buyer educated?

Assuming the problem is well defined and well understood, how informed is your buyer? Do they understand the problem and their options? An informed buyer can be a challenge for remote sellers for the simple reason that they know what their options are and may be willing to settle for a less-than-optimal solution that has local presence and support. On the flip side, if an informed buyer knows that you indeed have the only solution available to him/her, they might take a chance on you, despite all the risks inherent in dealing with an overseas vendor. This has happened to me. In a situation where the product I was selling was not established in the US, the fact that there really was no other solution that came close to what we offered, worked in our favor.

Is there a local substitute available?

If the answer to this question is yes, then don’t even bother doing any remote selling. Even if your product is better, it is only incrementally better. It won’t be worth the risk to a buyer unless you can prove that you are serious about the geography and have invested in it. 

Do you have a proven track record?

Case studies matter. A track record matters. Remember, you are trying to minimize risk for your buyer. With no presence locally, the buyer will want to be assured that you know what you are doing if they buy from you. Prove yourself in geographies where you have a greater chance of success first. Overseas markets are huge and attractive. However, entering them too early is a common error to make and one that is very, very expensive. 

Are you ready to take on a paying customer?

A sale is just the start of a relationship. Whether it is services or products, relationships can be sustained only by careful nurturing, and in the case of products, support. If you are a services company, can you deliver? do you have the necessary manpower to provide support? do they have visas to travel at a moment’s notice? If you are a product company. – can you support the product? do you have the manpower to do enhancements? are they available for support during the customer’s work hours? These are just some of the questions you need to address to give your buyer peace of mind. More than anything else, buyers are looking to minimize risk. Not addressing these concerns makes you high risk and highly undesirable.   

This is by no means an exhaustive list of things to think about. Just something to get you started. To quote an old Hindi proverb – “Door ke dhol suhavne lagte hain” or “The grass appears greener on the other side”.  Overseas markets, especially the US and Europe, are huge and potentially lucrative. But as I have pointed out in other posts, they are not for the faint hearted. Before you venture, you need to be ready for it both financially and on your corporate resume. Everyone of us knows someone in big companies in the US, often in influential positions. You are almost guaranteed an audience with someone of value if you reach out. Just because they will talk to you, does not mean they will buy from you. Too many people make the mistake of confusing the two. Ultimately, buyers are looking for a solution that not only solves their problem but also one that is low-risk. Unless you can minimize vendor risk for your buyer, you have a tough road ahead.

Agree. Disagree. Or have another viewpoint. Would love to hear your thoughts.

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What’s my next Product Going to be? A Product Ideation/Extension Toolkit

You have your first product and it’s a success. Success only brings more demand from prospects, clients and customers for features that are not yet in your product. Some of them are not interested in all the features you have in your product but seem to use only some odd features. Or they have found a totally new use for your product that you have not yet thought of, as yet! As an entrepreneur you are sitting there thinking “Why don’t they just use what I have provided them in the way I think they ought to use it?”. These kinds of reactions from prospects and clients are not only normal but indicates that you are on the right path!. All of these can be confusing for a small product start-up. However it need not be. Here’s a toolkit put together with examples seen with various start-ups and mature product companies. Think of it as a set of dimensions along which your own products can be extended or new products ideated. Depending upon the nature of your software product – SaaS or On-Premise, different dimensions for product variations, price points or delivery methods could be applicable. The advantage of this kind of approach is that it makes it a systematic process and makes sure that what you do has exemplars elsewhere, preferably ones that have been successful!

1. Product Variants based on Number of Users 

This model may be  familiar with SaaS product companies. There may be a Free Version, say upto 10 users, Small Business version for  11 to 25 users and an Enterprise Edition for 26 to 400 users, for example. Before you choose this model it is always good to put yourselves in your clients’ shoes and make sure that it makes economic sense. Beyond a certain number of users, clients always prefer a very flat discounted pricing. I speak from personal experience! We once evaluated a SaaS product for a 25 person start-up company.  Beyond 15 users, a per user model did not make any sense for us since the discounts for more users was not steep enough. On-premise software was much less expensive than the SaaS alternative. An on-premise software with an initial steep cost and annual maintenance of 16 to 20% worked out to be much better. Like us, many clients and prospects may have unused server capacity, technical people on the payroll that have extra capacity. So hosting our own software did not add any additional hardware/software/people costs for us. This is a cautionary tale for SaaS product companies that go after large enterprises or elephants. Make sure your flat pricing makes it is still profitable for you with huge numbers of enterprise users after paying for servers, hosting, bandwidth, specialized support, etc. What if this client grew phenomenally?

2. Product Variants based on Additional Features

Most are familiar with Microsoft’s Home, Professional and Enterprise editions of software products. Basic features that made sense for home use would be in component products like Microsoft Word, and Excel. Professional editions added additional features in individual products and they added additional products that made sense in an office setting. Enterprise editions were capable of a lot more and some included server editions where the product is hosted centrally. One caveat is not to leave money on the table when you have a single product and you start adding features. At some point in time, your product needs to split into basic and advanced editions and you need to make sure you get paid additionally for added features. This is a problem you face after you add features. In product management, one of the big conundrums product start-ups face is knowing when to add a feature. If one prospect or client asks for a feature, put it on a running wish list. If two of them ask for a feature, put it in the next release. If three of them ask for it put it in the appropriate product variant and in the next build! When you do a demo and a presentation of your current product, always have Upcoming Features and Upcoming Products slides and solicit feedback.

3. Product Variants on Adjacent and Associated Technologies

In software product companies, there are always adjacent and associated technologies where your next products need to be. If your consumer facing product works in a browser, it may need a mobile version and sometimes,  vice-versa. Document management products may need workflow products to go along with them. An enterprise financial management product needs sales management, manufacturing, people management products to go along with them. This is one of those areas where paying close attention to what other software are used by your users may give you ideas about your next product stops. Clients will readily tell you what other products they need to go along with the one your sold them, if you have not already found them out when they implement your product. Integration services always go along with products, especially in enterprise facing ones.

4. Products based on different characteristics/preferences of users

Not all of your clients or users will use the product the same way. Some may re-purpose features you meant for something for something completely different. As I write this, our client is using an open-source CRM system for internal workflow handling. The reason is not that the workflow features of this CRM system are very strong but because the attachments and document version handling is very strong and 90% of their workflow depends on users submitting documents for verification, validation and formal certification. User Interface skins are based completely on preferences of users and personalization. For inspiration, consumer product companies like Unilever and Proctor and Gamble are great. You can be sure that there are one or two Dove Soap products, White and Pink, that contribute 80% of their sales. They still have Dove Sensitive Skin, Dove soap without any perfume, etc. Software product variants may not be that simple but paying attention to what different types of users or usages can lead to variants that make sense.

5. Products meant for different types of markets

Different markets may have use for some common features but sometimes may need to be completely tailored for a new market. Tax preparation software for the US market may not be of much use in Europe or Australia. Or by architecting the software a certain way, a lot of the software could be reused by including a business rules component and writing different business rules for different markets. Oracle Financials has an Oracle Government Financials parallel, which may have very little in common with it!. Adjacent markets are always good to go after. What are those markets for your product company?

6. Free Trial/Free-Paid Versions

Free Trial versions may be necessary for scaling your user base initially and converting them later on. Free Trials may have expiry dates but free versions without any expiry dates can provide data lock-in. Once a client or a consumer’s data is in your software, inertia may prevent them from switching and you can convert them to a paid one at some point in time. In some cases like LinkedIn, free and paid versions can co-exist and you can still have a profitable company. The free version may have some limits and if the limits are too onerous for intensive users, they may convert to a paid version. However, it is always better to provide as many of the features you can in the free version and not make it too much of cripple-ware! The free version should be fully functional for most of the simple stuff all of your users. If minimum functionality is not there for accomplishing something meaningful, free versions will only put users off. I hated free versions that don’t tell me after I have put in a lot of data in and then I cannot print anything or do something meaningful with it.

7. Service -Product Spin Outs

Tax preparation software companies also provide tax preparation services for consumers that cannot use the software, for whatever reason. This is a good example of spinning out a service from a product. If you are offering a service you may catch yourselves doing the same kinds of activities for your customers. If it can be automated or provided as a self-service online option for a fee, may be there is a product idea in there. That can be a service to product spin out.

When your product starts to take off, it may be time to streamline your offerings and create a road map of product variants and new products. It is better to have a process and some systematic thought put into this activity. Analysis of existing users, careful attention to what they are saying and which features of your product they are using; what they want new in your product or what new products they want,  can all help guide you in creating a product family and a road map. Having a set of dimensions in a tool kit helps  a software product company mix and match whatever is applicable to them to creating and rolling out this roadmap!

If you don’t know where you are going, any road will take you there! – Lewis Carroll in Alice in Wonderland

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Leveraging Customer relationships as a Product Manager

There have been epics written on ways businesses should be:

  1. Identifying customers
  2. Acquiring new customers from competition
  3. Retaining customers
  4. Cross selling and up selling into existing customers
  5. Leveraging Customers for expanding business

For a Product Manager, who has to deal with many internal and external entities, Customer is by far one of the most business critical entities that he has to deal with. And rightly so, since it’s the customers who not only pay for your product but help in innovation, evangelizing product and most importantly give you the credibility to make the right product / business decision and the confidence to stand by it.

Every organization has different dynamics around customer management. Hence as a Product Manager, once you get into a new organization you have to feel your way into the customer management dynamics. Let’s focus on some of the common trends and techniques used for successfully getting a handle on building successful Customer relationships.

1. Identifying Customers:

One of the first and the foremost tasks is to identify the customer. There are two types of customer:

  • Internal Customer: These can be folks within in your organization who use your product or service to assist your external customer or use the product / service on behalf of your external customer. As a Product Manager you should give their voice a significant ear, since they can not only share their experience but also be a voice for external customer. Another benefit is that since they are part of your organization you can leverage them for beta testing, brain storming ideas, hand holding external customer and even for evangelizing products
  • External Customer: These are your paying customer. As a company you have made a promise to them for delivering a product / service and that must be kept. You should categorize the customers in terms of their value to the organization:
  • Revenue (current and potential)
  • Brand value
  • New market beach head
  • New geo beach head

 

2. Initial Customer Contact:

Initial customer contact is a crucial point in your relationship with the customer. Hence it is critical that you do all the necessary research on the customer account prior to the meeting whether it’s in person meeting or on the phone. The per-call prep can help you gain insights into customers:

  • Business
  • Current issues
  • Temperament

 

As part of this initial introduction to the Customer, you must establish credibility by highlighting your relevant past experiences and listen intently by being the fly on the wall. One the key things to remember is that as a Product Manager you must align and fit well into the Sales team dynamics, since they are typically the owner of the customer relationships.

3. Basic Ground Rules for Ongoing Customer Engagement:

Once your initial introduction is done, managing the ongoing customer contact is delicate balancing act. A customer managed properly can help take your product to the next level along with its revenue.

  • You must establish basic ground rules:
  • Reviewing meeting agenda with the sales team
  • Sending meeting agenda in advance to the customer
  • Follow through plan after the meeting
  • Set up meeting success criteria
  • You have to be careful not to overwhelm the Customer with long and frequent meetings since it can cause confusion and delay in reaching your goal. This is especially true when you and your Customers are geographically apart. Crisp, succinct and to the point conversation is critical for ongoing communication with any Customer.
  • Remember the Buddha story about teaching Nirvana to a starving disciple? As long as the disciple was starving, there was no way he would have been interested in learning about Nirvana. Similarly, focus on the immediate needs of your Customer before offering him advance solutions. Once you solve Customer’s immediate business problems, he will be interested in working with you since trust in the relationship is built.
  • It’s critical to set expectations when you have conversation with Customers. Typically, if you ask customers to share their pain points, they will open the floodgates and expect those pain points to be fixed immediately. Hence before asking the Customer to open the floodgates, you should make sure that you set the right Customer expectations so that Customer doesn’t loose interest and let down. No one wants to tell the same story again and again, especially if your organization is expected to fix at some point. This same principle goes for sharing product and services roadmap. You should help Customers understand that documents like these are for confidential and for directional purposes only.

 

These basic principles for managing customer interaction will vary based on geography, industry vertical, business model, company size, number of products, product life cycle, etc. But, if followed consistently will take your business to the next level by forging long lasting relationships with your loyal Customers…

 

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iSPIRT Playbook Roundtable: Positioning and Messaging – Lot of it is common sense!

If your grandmother does not understand your message, then you might as well not communicate is the crux of what was discussed during this Roundtable facilitated by Shankar Maruwada and Nandita Sinha.

This roundtable discussed the ‘What’ of the positioning and messaging and not the ‘how’ of the positioning. There was very little theory except perhaps setting the context and the entire session was practical.

To illustrate the significance of positioning and messaging, one of the participating companies gave an elevator pitch thinking the rest of us are his prospective customers. Then people spoke about what stuck in their minds about the pitch. It varied from ‘I lost him’ to ‘I was thinking of a completely different business model’. The person who gave the pitch looked at all the responses to understand if there were any surprises and what needs to be the part of their messaging.

Discussion on the first pitch led to the understanding of the following:

  1. The curse of knowledge forms a part of all the messaging – what is easily understandable for us is not understandable for the market.
  2. Often times, people start to have internal chatters – they start to think even before the pitch is complete and the attention span is just about 30 seconds.
  3. Most messaging is at a conceptual level and addresses the left-brain of their audience, which does not persuade people to make decisions. Try addressing to their emotions, their right brain and the easiest way is to do these through stories.

Using the first pitch as an example, Shankar explained what goes into creating a tight message and it was

  • Identify the customer segment. You can have one overall messaging of your offering and can have multiple messages for multiple segments
  • Setup is the context of your offering. It can be some challenges that your customer segment faces or the industry faces. There can be multiple setups to your messaging
  • Explain the benefits of your solution. How your offering is unique to the customers need will be the persuasive part of your pitch. Setup combined with benefits is what would make the message that you communicate
  • Features and supporting credibility will have to come after this phase of setup and benefits

After this, one more exercise was carried out where all the participating companies were asked to write down 3 setups and 3 benefits while avoiding features. All the pitches were discussed at length and I am sure all those who attended the Roundtable went back a lot wiser about messaging.

Shankar emphasized on a very important fact that you may not crack your messaging in one sitting and it has to be an iterative process. He also asked people not to think in words and instead begin with stories, then move on to thoughts and then switch to words. This is the best way in which you will get to do your messaging right.

This Roundtable was attended by 9 companies with 12 participants and 2 facilitators. This roundtable kicked off to a hilarious start, during the introductions most people in the room claimed that their Saturday night favorite drink was either butter milk, tea or coffee.

I am looking forward to more such sessions.

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“Envision, Evangelise and Execute”: Connecting with Satyajeet from Cleartrip #PNHangout

We recently had a chance to catch up with Satyajeet Singh – head of Cleartrip’s mobile solutions, on Cleartrip and his take on the role of a product manager in Cleartrip, here’s what we learnt:

Cleartrip has been an early adopter of m-commerce in India. How have you been involved in taking Cleatrip’s mobile offerings from a MVP, to the product that it is today. How did you ensure it was scaled the right way and it grew? 

A) Cleartrip launched its mobile site 3 years ago and was by definition,  a minimum viable product: In the first version, users could only book a one-way ticket for one traveller and nothing more.  

When we launched Cleartrip for mobiles, smartphones weren’t as popular as they are now and anything we earned wouldn’t have a large impact on our revenue. So we took small steps to make our mobile offerings market ready. We did not want to overwhelm the user with too many options, and we slowly scaled the product with more features as the market grew. Today we have apps for all major platforms and one of the most comprehensive mobile site, with mobile contributing over 25% of the traffic for us.

My first priority has always been to deliver the very best products we can, for our customers and it is very gratifying to see it getting recognized within the country as well as at international forums. 

You’ve been in product management for over 8 years now, what do you think is the role of a product manager in an organization? 

A) Envision, Evangelize, Execute, are the three key roles a product manager has to perform in any organization.  

Envision

This means having a clear picture of the problem you are trying to solve, the solution and the strategy that will lead you there. It requires deep understanding of target users, the existing solutions and competitors in the market and a compelling case for why your solution will win over the existing alternatives. 

Evangelize

An equally important aspect of my role is evangelizing  your vision to your team. The more you focus on thisthe easier it’ll be to executeAnd once the team is convinced with your vision, you’ll be amazed to see the change it’ll bring to the output.  

Execute

Remember the quote from The Social Network, “If you guys were the inventors of Facebook, you’d have invented Facebook.”

It is one of the most critical aspects of product management and means doing whatever it takes to ensure your product ships. 

How do you organize your week and what are some of the tools you use to manage your work?

I try planning my week ahead by setting broad goals that can be achieved by the end of the week. My weekly goals could include tasks like calls, meetings, interviews, data analysis, and every little thing that I can foresee for that week. Planning for each day  is usually impractical so I set a broad theme for each day and try and stick to it; for example, Marketing Monday’s is when I spend more time understanding impact of marketing campaigns, or Competition Wednesdays where I try to catch up on the competitor’s activities. 

I also dedicate at least one day every two weeks, purely to plan future releases and to do a postmortem on our recent releases. 

Some of the tools we use are, Basecamp for collaboration, Jira for tracking bugs, Evernote & Wunderlist to organize my work and Excel for everything else 

How do you go about understanding your customers and his/her needs?  

We get a lot of feedback from our users through emails, app reviews, complaints, tweets, Facebook comments and by talking to them directly. But while collecting this feedback, my focus is always  to understand why users want a certain feature(instead of making a bucket list of what they want) or else you’ll end up building ‘faster horses’. 

Analytics is the other very powerful source of understanding and predicting market needs and for fixing critical bugs. 

It’s a mix of the two(feedback and analytics) that gives a good base for prioritizing releases. Making decisions by looking at just one side of the picture can sometimes prove fatal for products.  

Product managers spend much of their time communicating ideas, plans, designs, and tasks to their teams. How do you ensure that it is done effectively?  

You need to champion the three levels of communication between the teams. 

Long term:  By conveying your vision to the team and making sure that they are aware of the problem you are trying to solveis extremely important if you want a self motivated team. Even if they find it repetitive, you need to communicate it often, so that they don’t lose sight of it.

Short term: This includes communicating to all the people who will help in achieving this vision. It is mainly in a form of a product roadmap. You can share a broad yearly plan and a detailed quarterly plan that will enable everyone to plan accordingly. Make sure to keep all the stakeholders as involved/informed. 

Immediate: This would include the day-to-day communication that is required for a smooth functioning of your roadmap. SCRUMs, feedback on designs, prioritizing bugs, discussing & closing blocker issues, reviewing marketing plans, communicating deviations, escalations, all  fall under this category.  

Q) Any tips for aspiring product managers?

Your products can only be as good as your relation with your teams, so invest time in building a long-term relation with them. By spending time with your team you build trust and respect, that will keep them equally excited & help you achieve your goals. 

Editor’s 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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Enabling Product Managers to manage Product Experience

In my last post, Product Manager, or Product Experience Manager, I described the disparate features and experiences that got broken in SiteZ and made the case that product management team should be responsible for overall product experience. In the final post of this series, I will present my views on how product management team should manage experience so that such issues can be minimized or avoided. Note that I am not talking about creating initial product experience or its next version, which is a topic of itself. I will focus only on managing the product as it goes through incremental changes.

There are 3 questions that must be answered by product management team at all times (and should be asked periodically):

  1. Are we seeing all the activities we should be seeing?
  2. Are we processing all the activities we see?
  3. Are we making good decisions based on our processing outcomes?

Product Experience Contour

To answer first question, it is important to understand the boundaries of the product experience that you wish to provide, what I call Product Experience Contour. If you define this too narrowly, you will miss out on lots of user and system activities that you should pay attention to. If you define it too broadly, you will be inundated with activities that are not useful and you will be stretched thin. There are 3 approaches to draw this contour:

  1. Persona-driven: If you have created personas (a realistic and detailed description of a fictitious user who represents a category of target audience for the product), they are good starting point to define these contours. Any activity in your organization that impacts or is impacted by a persona is usually a candidate for being on your radar. For example, if I am a persona for SiteZ (someone interested in learning from experienced people, but not interested in changing jobs), the product management team needs to ensure they are plugged into what the other group is promising and offering me. Note that in this case, I may not be a persona SiteZ cares about, which is a marketing and positioning strategy.
  2. Use case driven: If you have created use cases (UML, flowcharts, long documents, whatever) to describe how user roles interact with your system, that also is a good starting point though it may not be comprehensive. You can start by looking at the alternate and adjacent flows the particular user roles can go through on your system and see if those need to be on your radar. Use cases are more constrained because they describe your understanding at the time of product creation, while persona allows for more contemporary interpretation.
  3. Data-driven: While this may be hard (depending on how evolved your data analytics team is), this can be a very useful way to draw the contour. If you are able to analyze the data available for your system for past user interactions, you should be able to enumerate user activities (along with frequency of use) that you are interested in. The problem in this approach is that if some flows can’t be completed successfully by the user, or your data capture is not comprehensive, you may not get to know about some flows.

If possible, you should use more than one approaches above to draw the contours. Usually, persona-driven is a great way to draw initial contours, validate it with the data from your analytics, and then use data-driven approach to detect new user activities that might be important to include in the contour. In my case, it is entirely possible that none of my activities were ever tagged as useful activities to track, since these are not primary use cases (except the first one – trying to register to join the chat with the guest).

Information Sources and Management Systems

To answer second question, it is very important to look at 2 aspects:

  1. Information Source: As a user interacts with the organization, information is generated at many different places. It is very important for product management to be well-connected to these sources and make sure they are getting the information frequently. A few of the sources are:
    1. Data Analytics: As mentioned above, data analytics is a great source for information and must be harnessed properly.
    2. Direct User connect: There are many ways to connect directly with a sample set of users and keep learning about their experiences from them – product blogs, twitter, facebook and other social media channels are very effective if users can stay engaged.
    3. Be the user: It is surprising to see how little product managers use their own products on a regular basis. While being your own user may not be the greatest way to design a new product, it is a great way to keep tab on how things are going. Depending on the product, product managers can enlist their family and friends to be regular users and give feedback.
    4. Other departments in the org: Many departments interact with the users Product Managers want to know about, so it is very important to have a good flow of information from these departments. Typically, Marketing, Sales, Support, and Training teams can have good information about the user that should be captured.
  2. Information Management Systems: How information is captured, stored, and disseminated is very important for effective processing. Most activities can’t be processed in real time. Processing can mean many different things – I mean it in the sense of understanding, clarifying, analyzing, ranking and other handling of data. Product management teams need to procure, and use a management system that serves the purpose, and avoid leaving information in emails, chat boxes, whiteboards, or in their minds.

Good Decision-Making Process

To answer 3rd question, we need to make sure we have a good decision-making process in place which is used all the time. A good decision is a collaborative effort, and it is a process rather than a moment. It requires lots of data (which your information sources and management systems can provide), and it requires following a rational decision-making process. Such a decision-making process has following characteristics:

  1. Right stakeholders in the decision-making are identified.
  2. Participants are contributors and idea-providers, not spectators.
  3. Decision-making criteria (how will different options be ranked and prioritized) is defined before solution options are figured out.
  4. Personal responsible for the decision (and its consequences) is clearly identified (and it must be a person, and not a group).
  5. Once the decision is made, it is communicated, along with the rationale for making this particular decision.

In this context, since we are talking about incremental changes to product, the decision-making criteria should be known upfront and should be applied consistently. Impact of a change needs to be validated against all the known implications to the personas we care for, and this should be a key data in the decision-making process.

Evangelizing Product Management role

Even when you have great answers to the questions above, it is important to enlist the support of rest of the organization in keeping product experience awesome for the user. To do this, product managers need to be product evangelists who go out and talk about the product and their role as the guardian of product experience, to whoever cares to listen, and whichever platform they find. Once enough people in the organization realize that they should talk to you whenever they think about tinkering with the product experience, you will have created the strongest source of information about user activities and your product will thrive.

One final time, let me go through the list of issues, and show how they could be caught if above is done well:

Issue Solution
They misled the user about the time it takes to register. Evangelism would make sure they talk to product team, and good decision-making process would ensure that either advert is corrected, or product is fixed.
They didn’t allow the user to abort the registration attempt gracefully (which left the email address behind and created rest of the mess). Good decision-making process would ensure right prioritization, and if feature is not prioritized, user is provided enough information about what to do in this situation.
They were not forthcoming about who is sending me these spam emails (the email address was hidden with a display name that was the advertiser’s). Being connected to user (or enlisting friends and family as users) might flag the mail as inappropriately crafted (you are receiving this mail because.. line should be at the top somewhere).
They exposed a feature to me (unsubscribe) which didn’t work Good decision-making process should ensure that an alternative exists if this feature is not going to be implemented, and that user is told about it honestly
They didn’t give me an easy way to delete my account – emails bounced, UI didn’t have a button to delete, etc. Good decision-making process would ensure right prioritization, and if feature is not prioritized, user is provided enough information about what to do in this situation.

To be fair to SiteZ, it is hard to do all this because these are elements of organization culture and everything can’t be written down as a process and followed. Also, it is entirely possible, that they are indeed doing all this (though I highly doubt this!) and still I became a victim. Such caveats aside, I think this is a good discussion about product experience and hopefully companies will focus more on product experience than what they do today.

This concludes my series on Product Experience Management. I look forward to your comments and thoughts on the topic.

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Don’t try to solve every customer problem by a line of code.

My First playbook roundtable. iSPIRT’s first initiative at Hyderabad, was a 4 hour insightful RoundTable that was  organised by the ProductNation free of cost for the attendees, which most Hyderabadi entrepreneurs gave a miss and are sure to be regretting the missed opportunity and the learning possibility that it offered.

Sridhar Ranganathan, ex-VP of InMobi, a Product Guru and Aneesh Reddy, the CEO of Capillary Technologies, which is in the business of providing mobile-based customer acquisition, tracking, and loyalty business, were the key speakers for the day .The first half of the session was mostly participants- driven where each of us were asked to share our day-to-day stories at work along with our expectations from the workshop.

Below were the most common challenges that emerged from our discussions:

  1. How to validate the need for a product?
  2. How to prioritize from the features wish list?
  3. What is the exact role of a Product Manager to drive successful product deliveries?

Validating the product need

Sridhar began the afternoon session by saying that, “The best way to validate the need for a product was constantly interacting with the customers and understanding their requirements.” He said there are 2 primary things for a product startup to be successful in the long run. One is Speed- wherein it is important for start-ups to be iterating faster as its always better to Fail Fast and recover quickly.

The second is to be data-driven wherein start-ups should be religiously looking and researching in terms of numbers both externally and internally .He recalled a popular quote, “Data is God and code is only a messenger”, which was truly an eye-opener as it made me realize the importance of constantly looking at data and then using that to validate the need of the product.

Aneesh shared a few of his real-life examples on how during their initial days at Capillary Technologies, they had spent over 6 months talking to every store owner be it big or small, to understand their needs and how they literally changed their product idea thrice before conceiving the final version. He also said that listening to customers played a prominent role in shaping the product rather than merely selling. He also spoke of how Capillary mainly stuck to one mantra i.e.- “Locking down on the cheque with the customer even before building a feature for them,” which not only drives a sense of stickiness and commitment with the customer but  also ensures the right customer need is addressed.

Priortizing from the Features Wish list

This is by far the most common challenge faced by all of us today, which Sridhar strongly advocated by highlighting the need for PMs to start questioning  every feature-benefit ratio in order to prevent any feature overload. He also stressed on the need for every PM to evaluate if every feature was designed for the ease of the end user. He added that it is important to add features in a disciplined manner and remove the excessive features ruthlessly. Bottom-line being – “Don’t try to solve every customer problem by a line of code.”

Aneesh also shared on how Capillary builds prototypes and demonstrates them to customers to ensure if the customer’s wish list has been fulfilled or not and that this has helped Capillary to keep the fine balance between what their customers are looking for and how the future of the product would shape up.

Role of a Product Manager (PM)

Sridhar began asking each of us to define what we considered the role of a PM to be and after everyone was done presenting their respective  viewpoints, he mentioned the below as some of the qualities he would expect a PM to possess:

  1. Empathy towards customers – the willingness to engage, understand and appreciate customer needs.
  2. Confidence to have a point of view
  3. Ready to build a product for the future
  4. Culture of experimentation and being data-driven

Personally what I considered the best piece of advice for PMs is, “to be responsible for the Outcome and not the Output”. This actually accelerates the need for PMs to question every effort for a feature request and evaluate what would be its ability to generate revenue.

Overall, it was an immensely insightful session. I would also like to thank Sridhar for taking time out from his busy schedule to enlighten us. Huge thanks to Aneesh for being extremely patient and for responding to all our queries.

I highly appreciate the efforts of Avinash to create such a splendid product management session wherein we not only get a chance to meet/network with product gurus but also help us rethink our working strategies. Last but not the least, I would also like to thank Pramati Technologies for being an excellent host for this Roundtable.

Eagerly looking forward to the follow-up session soon!

Post Contributed by Thulasi, Associate Product Manager at Versant Online Solutions Pvt Ltd and can be reached at thulasi(at)moozup.com

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“For a product business the product roadmap, customer segmentation and a delightful user experience are extremely crucial.”

Started in 2011 with only three employees, Emportant has grown to serve thousands of users with their cloud based end-to-end HR and Payroll products. Co-Founder and CEO, Emportant, Sandeep Todi says his company is focused to appeal to firms that would identify with its motto, ’Employees are Important’.  In an interview with ProductNation, he says his biggest learning is you must always take good care of your customers even as you keep expanding.

How would you describe the shifting paradigm from Outsourcing software to Software as a Service?

Software as a Service (SaaS) allows you to try business class software with ease and without being tied down with painful and expensive procurement and deployment cycles. With no upfront investment, it’s easy to try and buy SaaS products. In that sense, a SaaS network of products mimic the behavior of a ‘technology grid’ that you can tap into. In contrast, building custom software is like installing a captive power generation unit at prohibitive cost that is hardly justified when the grid is at your doorstep.

Companies have also realized that SaaS is not just amortizing costs over several years, but a new way of thinking. You are not selling a box, rather a product that’s constantly on the move. SaaS products see anything around 4-12 releases a year, are built on rapid release cycles. Moreover, customer feedback is acknowledged and incorporated in these rapid release iterations, something which is impossible in outsourced software or licensed software. The customer is therefore always on the latest release and does not suffer from “version fatigue”. Businesses are realizing this by adopting SaaS products with very little risk, tasting success and then quickly going on to embrace this new pedagogy.

In what way does this new model benefit users in terms of effectiveness, cost and support?

This SaaS apps-grid or ecosystem of apps that can co-exist with each other, is becoming more powerful by the day. No outsourced software is able to deliver this as elegantly and as cost effectively as SaaS product delivered over the cloud.

SaaS software is able to deliver benefits rapidly through new releases and eliminates risk of obsolescence. FUD (fear, uncertainty and doubt) has been used by traditional software vendors, scaring users about impending obsolescence. Having left with little choice, customers had to regardless opt for expensive upgrades and consulting efforts. A transparent SaaS business always keeps users on the latest version and ensures that this version works 100% with all customer environments. This dramatically lowers the cost of maintaining the product because you are no longer dealing with different versions that must be supported for different customers.

Tell us the story about your recently launched web based HRMS and Payroll software, Emportant? How did it happen?

We are in the HR software business for nine years now. Having sold our product PowerApps to several mid-to-large enterprises, we delivered mission critical and high performance HR/Payroll software to customers like Bank of Baroda, Ford, TI Group, ITC, L&T, GTL etc. In 2009, we wanted to adopt cloud computing in a big way and struggled for two years. It was then that we decided to carve out a separate company and a separate product for the cloud – this was the genesis of the birth of Emportant in 2011.

In creating Emportant we initially feared it would cannibalize our own product PowerApps. Thankfully, that did not happen and now both products have a good market presence of their own in two different customer segments.

Emportant.com drives every HR process with the Employee at the center. Every HR / Manager / Employee interaction can be initiated by the Employee and is available on a self-serve platform.

How easy or difficult is it to market a software product in India?

The going was pretty tough in 2011 as cloud was not very well accepted back then. Now it’s different, as CIOs are less wary about the cloud and more concerned about the stability of the vendor, maturity of the cloud product, etc.

Custom software is still viewed as a viable alternative primarily due to the inexpensive cost of hiring programmers. Moreover for a product sold to mid-market and large businesses, you have to traditionally sell one-to-one, engage in multiple meetings and convince customers about the solution fitment without landing into the trap of customization.

What are the factors that make a successful software product and the challenges faced in taking it to the market?

For a product business the product roadmap, customer segmentation and a delightful user experience are extremely crucial.

We have focused on how HR can be employee friendly and have a focus on achieving business results using software tools. The product’s benefits must be easily understood and should quickly demonstrate value. We have successfully kept bringing original thought and real customer feedback into our product, coming out with unique and uncomplicated ways of solving business problems.

Emportant drives HR administration in real time and moves away from the concept of HR software being only a system of record. This model of ours has led to a success rate of > 80% in converting prospects to customers.

We are now looking at stepping up our efforts on social media and on overseas customer acquisitions. Establishing credibility amongst large customers continues to pose interesting challenges and working with business partners means we have to convince them about long term value vs upfront margins.

What is the future of software products vis-a-vis services?

Software products and services will always have their own separate customer segments. I don’t think software products can solve every business problem out there and services have an important part to play. Customers are beginning to realize that service consumption burdens them with unreasonable costs of operation and in an increasingly competitive world they would rather adopt a product if one exists which can meet their requirements. The benefits of products to the customer in terms of cost, sustainability and continuous improvement are already well established.

Look at Dropbox’s recently announced Datastore API. They have just commoditized the offline storage market for independent app makers. In fact, storage is now being turned from a service into a product as will be any service which can be wrapped into a standardized and repeatable delivery.

What learning would you like to share with other product companies?

Every launch of a new version is a learning experience for us. We are faced with the challenge of what to build in the next version, how does it affect pricing and how does it affect our current customers. What we’ve learnt is that you must always take good care of your current customers even as you keep expanding. To ensure this, we reward existing customers with new features for free whenever we release new versions and keep them protected on price changes perpetually.

What role do you foresee ProductNation to play in nurturing the growth of software products?

The biggest obstacle to exponential growth of Indian products is the lack of access to experts in marketing, product growth and cutting edge technology. Too many companies face mortality because of an idea or execution gone wrong.

ProductNation will hopefully help overcome these hurdles quickly and open up the opportunity for Indian products to be recognized globally.

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Learning and growing together at the iSPIRT #Playbook Roundtable

iSPIRT Playbook Roundtable in Delhi Flickr Stream

The Product Management Playbook roundtable repeated last week with an intent to check progress. The mentors – Amit Ranjan & Amit Somani were keen to know the problems product managers faced while they executed on ideas discussed in the previous episode.

We could guess this would be one power packed session, especially from the conversations that ensued over lunch. There were active discussions, funny anecdotes and heartfelt laughter which filled the Eko cafeteria. New bonds were built and older ones renewed as we savored the delicious dishes.

The RoundTable was started with Vikram Bahl of Yavvy.com presenting his product management approach. Presenting a meticulously planned mind-map, his presentation discussed the challenges, the solutions and their outcomes. Elements from the previous round-table were clearly visible. “All of our metrics have now been divided into 1/1/1 (1 day/1 week/1 month)”, he told picking up on the 1/1/1 metric philosophy suggested by Amit Somani of MakeMyTrip in the previous round-table. He also mentioned that the “email-suggestion” and “leveraging-existing-paradigm” suggestions by Amit Ranjan (of Slideshare) had done them loads of good and the results were very encouraging. “This time, I got advice on stuff that goes beyond traditional product management, it was more around positioning and marketing”, said Vikram as he reflected upon the discussions.

Next, Bishal Lachhiramka of Drishti soft spoke about his own product management approach. Touching upon organisational structure, product manager roles and global benchmarks, this was another amazing discussion. Participants shared their own experiences and what has worked for them and what hasn’t.

Tarun Matta of IIMJobs also got some amazing feedback on some of the things they intent to do. Picking up on the experience in the room, he picked up on strategy and executive advice on what could propel IIMjobs onto the next orbit of growth.

We also had Shantanu Mathur introducing ‘Smartwards’ and Mayank Dhingra of Paytm bouncing off ideas on how to build product-management metrics for online products. Even though, this was their first round-table, they found themselves brought upto speed by the mentors.

The final few minutes of the day were spent discussing “how to divide and structure roles and responsibilities of different program managers”. Avinash Agarwal and Abhishek Sinha of Eko, presented a delightful case-study which helped sum up the discussion.

As Nakul Saxena of iSPIRT summed up, “I just see so many product managers negotiating the learning curve together. That is the surest way to move quicker and grow faster. In contrast to any other conference or discussions, the round-table presents every product-team with a close-knit group to discuss personal challenges and personal experiences. ”  

Doesn’t that sum up what these round-tables are all about. Participate in the next one to find out!
With inputs from Vikram Bahl of Yavvy.com
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“Customer Relations is very important” – Kailash Katkar, CEO, QuickHeal Technologies

In this fascinating story, Kailash Katkar recalls the past almost two decades of running a business that at one time faced closure. But riding on quality people, constant innovation and proximity to the customer, Quick Heal has become a leading anti-virus software company that is giving even the international anti-virus companies a run for their money. Read on….

Why did you start this business? Why did you form Quick Heal? What was the intention behind it, and did you go for it alone or do you have partners? 

When I started this company I never thought I will convert this company into Software development. It started as a computer repair shop. I used to do calculator repairing first, and then I was into laser printer machine repairing. And in those days it was a monopoly in Pune. But when I saw that these machines were not going to continue for a long time and computers are going to take over I started, computer maintenance and started taking AMCs. In fact, I had a lot of customers. I was not into computer sales. I was purely into computer maintenance. 

My younger brother(Sanjay Katkar) after his 12th standard wanted to get into electronics for his graduation, but I instead said why don’t you do computers. He was a bit reluctant because it was very new and the fees were high but on my advice he did that and used to come to my shop for practice because I had computers in my shop. Now those days, nobody bought antivirus software. In fact it cost a prohibitive Rs. 14-15,000. Customers assumed it was the responsibility of the contractor to provide it and when computers came for maintenance it was the contractor who had to format the machine, re-install the OS, and reload the data. 

Now my younger brother as part of his curriculum had to do a project so I asked him to write some tools which could automatically remove viruses since formatting the machine and reloading all the data was very time consuming and cumbersome. The Michelangelo virus was infamous in those days and was quite a problem for many computer users. He managed to write one simple utility that could eradicate the virus and it worked very well. So I started distributing the tool to my customers and that was the beginning of the anti-virus business.

So based on customer feedback, I ventured into anti-virus software and believe me I had no knowledge of the software industry. We started work on a full-fledged anti-virus software in 1993 and the first version of Quick Heal was released at the end of 1994 most likely.

Sanjay Katkar(left) and Kailash Katkar(right)

It was quite funny actually when I think back. The software was a DOS version that came in a floppy, and then we designed a small envelope with colorful packaging and started selling it. It was a bit tough for me to sell, but then gradually I started getting success, and I got this success through channel partners, because since I was into computer repairing, I used to know most of the computer repairing people. 

So, what was the competition like in those days, Kailash? 

There were a lot many antivirus software. I mean, there was Norton antivirus; there was McAfee; there was Dr. Solomon. And there were a lot of Indian antivirus also. 

From Pune itself, there were three antivirus software manufacturers. The two prominent ones were Cure and Vaccine. 

In Chennai there was Vx2000 and Star antivirus software. And from Mumbai, there was Red-Armour antivirus software, Red Alert antivirus software. From Delhi, there were three antivirus software. So overall across the country, I think there were about 10-11 software, and this doesn’t include international software. 

So from a customer perspective, was there a leaning towards the imported software or Indian software? 

People were more fascinated by imported products and software was no exception. McAfee and Norton were the preferred choices in the market. 

Correct. you must have had a lot of courage to kind of get into the market at that point. 

Yes. Actually, my computer maintenance work was still on. I continued my computer maintenance until 1998 and this gave me the cash to pump into the anti-virus software development and marketing also. Personally, I used to spend 50% time on computer maintenance and 50% time on software sales. And my younger brother was fully focused on development. 

What was your proposition to the customer? 

Actually, it was quite difficult considering the huge competition, with so many number of antivirus software. But in the late nineties, a virus called Dir 2 came into the market. The virus was extremely dangerous and used to decrypt the hard disk. In fact, users never knew when the machine is infected and after infection how many times the machine was rebooted. Now if you applied an anti-virus software in the traditional way, it was just remove the virus but whatever data was decrypted would be lost and the machine would crash. So every time the machine was formatted about 30-50% of data would evaporate. 

So Quick Heal pioneered a unique approach. We managed to find out how much data was decrypted and encrypt it before cleaning the virus. That way we got the virus out and the data restored. This way Quick Heal was the first antivirus software in the market  which used to do this. Even Norton and McAfee were not doing this. 

What was your communication strategy to inform the market of such developments? 

I was not able to go pan India, but I was able to communicate with most of the customers in Pune. In fact soon after Dir 2 came Natash a dangerous polymorphic virus. Again many of the antivirus software companies took a hit but we were able to find a solution and gradually started converting larger customers like the Times of India who took a corporate decision to adopt our software. 

How did you scale that now? From a development perspective, how did you scale it? 

Now we have a team of around 650 people but we went through some tough times. In 1998 I decided to close down the computer maintenance business because it was very difficult to run two business together. I focused on a distributor strategy but that put a strain on my business because while the distributors sold the product they never paid me on time. In fact it reached a stage when in early 2000 I decided to close down the company. 

In 2001-2, I had about Rs.2 to 3 lakhs in the bank, and then one of my friends advised me that if you really want to scale and grow your business, invest in a proper technical team. Also get a good business team. So finally we decided to do it under a lot of strain because in those days banks never supported software companies.

I somehow inserted a big advertisement in the Times of India, almost a half page ad, saying that I’m looking for country managers and city managers. I was then able to hire good people and together we changed the entire structure of the company.

Why did they come and join you? What was it that they saw in Quick Heal that was the game changer for them?

Quick Heal had become a bit popular in the Pune market and most of these people were from Pune itself. So, they knew about this product. They knew about the quality of the product, but they were quite also that the product was not reaching the masses. So they joined the company to take up the challenge and I am proud to say that more than 10 years later they are still with the company. 

With these new people, we embarked on a strategy to open branches in other cities. Soon I developed a lot of confidence that sitting in Pune I can manage branches in other locations also. We started with Nasik. And after Nasik started running well, in three months’ time I started an office in Bombay and then in Nagpur and then in Indore, and then gradually I went into Gujarat and then I went into North India and South India. Today, we have around 23 offices, apart from Pune, across India. 

So you still believe that a large part of your sales has to be achieved by physical presence?

Yes, yes. Most software companies try to appoint national distributors whenever they scale their product to other countries. And perhaps a few regional distributors.  I don’t believe in that. Because what happens, if you….if you appoint a national or a regional distributor he expects a lot many things to be done by the company. He really does not make efforts. He just waits for customers. If the customer demands the product, then he sells the product. 

When I appoint more than 100 channel partners, then I try to appoint one stockist on top of it, so that I don’t have to deal with each and every channel partner for a transaction like billing and invoicing and payment collection and all these things. I can just deal with all the channel partners just to maintain a relationship and make sure that they are comfortable selling Quick Heal, and if they have any issues or problems, we can go and help them. 

So, this is how I started developing a market all over India, and now we have around 12,000 channel partners across India. We have direct connectivity with each of our channel partners. 

How do you keep this channel partner base updated about the product and about new developments?

By giving continuous training. Every branch has a set of people for a sales team, a set of small – one or two persons – for marketing. Then a team for support, and then the administrative team. And among the support team, there is one person who is a trainer who keeps on training all the channel partners about the product features and product support and other functions. We have a training program conducted every Saturday for a specific set of channel partners. 

And how do you keep updated about the innovations that you need to bring into the products? So, the new antivirus, antidotes, whatever. 

Actually, since the team is spread out across India we always have meetings with the branch managers once in a quarter, and then we keep on getting a lot of feedback from the entire market through these branch managers as to what the customers are looking for.

Okay. Looking at this 15 year journey now, what would you pinpoint as the most important thing that you have done. 

Customer relations are very important for me and understanding the customer is very important for me. So, I have to focus more on that, what exactly customers are looking for and how I can get that service with less effort for me as well as for my team by developing some tools or something like this, you know. 

How do you keep abreast of fast changing technological developments? 

Our senior level team of about 7 to 8 executives constantly are attending conferences and travelling across the globe. For instance, we attend the Red Hat conference and this Hackers conference and most of the antivirus conferences and a lot many security conferences that keep on happening….Not only do they attend, but we also keep on presenting our research papers in these conferences. So every year, around four to five papers are being presented by Quick Heal.

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Platforms and Verticals—What to Build on and for Whom

An important decision is about development and deployment platforms. If your product is targeted for a specific operating system, the choice is obvious. When the solution has to be platform neutral, or if the deployment will be controlled by you (SaaS model), then the common options are Open Source (Linux) and Java or Microsoft Windows. Always keep in mind the Total Cost of Ownership (TCO) for the customer.

Open source in theory benefits from the availability of a huge number of re-usable components and tools contributed by an army of individual programmers. While open source is technically free, limited support and inter-operability between different open source products may lead to higher cost of development and support.

Microsoft now offers free development tools to start-ups for 3 years under their BizSpark program, but licensing cost of servers and other software for product deployment, may be high.
Other issues may impact platform choice. An implementation which is tightly integrated with specific platform features and interfaces will limit your ability to go cross-platform. Conversely, leveraging the tight integration and inter-oper-ability of various servers on a specific OS can substantially increase the product’s value and ease of use.

Web 2.0 ventures and CIOs have new options to develop applications with minimal investment. Salesforce.com is promoting the platform-as-a-service (PaaS) concept, which it says represents the start of Web 3.0. Called Force.com, it enables companies to build and deploy enterprise applications on-demand without having their own infrastructure. Core business applications, such as enterprise resource planning (ERP), human resource management (HRM) and supply chain management (SCM), can be developed in just 5-10% of the time that is normally required for custom development, and deployed almost instantly.

Your OS decision should be driven by business potential. If a specific platform dominates or is acceptable to a majority of your potential buyers, then opt for it. Spend your engineering bandwidth on providing maximum compatibility and inter-operability with other applications on this OS, to improve total value to clients.