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Cracking a niche B2B market without funding: Valuefy’s Story

Valuefy was started in 2010 to empower fund houses to make informed decisions better and faster. Vivek Singal, a B.Tech from IIT Bombay and Sharad Singh, an MBA from IIM Ahmedabad worked together at Fractal Analytics, an analytics firm, before starting Valuefy.

On choosing to build a product like this, Vivek shares, “When we chose our niche, which was a B2B product for such a specific market, at the time when eCommerce was growing, it took a lot of faith. It was a slow journey, but definitely a profitable journey. Our clients have been very sticky and we are collectively helping manage over 100 billion dollars worth of funds at this point.“

Cracking B2B market without funding: Valuefy

Here are some excerpts from a conversation with Vivek:

Where did the story of Valuefy start?

VS: “Whole science around the portfolio management is a very niche play. Valuefy has been serving Indian players so far. To give you an idea, we are servicing 2 of the top 3 fund houses of the country. We have cemented our place in an Indian market.

We picked up analytics as a domain since number crunching was our forte, coming from our experience with Fractal Analytics. We were intrigued to find the frameworks and algorithms that helped the fund houses make decisions. We wanted to understand if there was any tool that they were using to decompose their performance, analyse returns, and understand what are the drivers.

There are some large global organizations that were working in this area, but they didn’t seem to respond to the change in technology to create more sophisticated agile tools. So they were placed as a middle office tool, but not a decision-making tool.“

What were your major road blocks in your journey, and how did you overcome them?

VS: “First off, it is very difficult to do a product strategy in this kind of a market. Our clients are very comfortable with excel as a tool where they can manage their reports on an ad-hoc basis, even though it can only give 10% of the information. Our study says that 60% of a fund manager’s time goes in understanding and processing the data which leaves them with very little time to analyse the performance and the portfolio. The problem is that they are so used to it, that it is very difficult to break this pattern and bring the adoption of technology amongst the fund managers.

Second, when we started, the markets were not favouring our product. We realized that the bigger clients were more open to it. Also, we think the international customers would have been more open to the product but the markets were slow.”

What goes into marketing such a niche product?

VS: “

  1. We have created a global advisory board. It includes people who have experience in the domain, people from our competition, also, people from the academia who are helping us with it.
  2. We have formed some key partnerships with global conglomerates. It helps as a marketing platform as well as a distribution channel.
  3. We started as a hosted product, but we have grown it into a SaaS based model, which has made it simple for us to integrate with the global companies and this will help sustain our global expansion.”

What is your advice to people who want to startup? 

VS:”

  1. Identify the market correctly. We served the Indian market for a very long time. While our market was global, we spent a lot of time on Indian markets first. So you will need to take the decision and define your market.
  2. Get the connect to the market. While you may be good at creating something, but a venture needs both a good product and good marketing and sales. So plan accordingly.
  3. Keep faith in your journey until you decide that you have given a fair chance to it.

People become a pendulum between deciding whether revenue generation is more important or increasing the valuation is more important. While valuations are sexier, I think if you want a sustainable growth and a strong business model, revenue generation helps create that solid foundation.”

Valuefy has definitely established that B2B businesses focussing on revenue generation and profitability can create a sustain an enviable growth. We wish Vivek and his team all the luck in their journey.

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A corporate wallet to simplify business payments and expense tracking: The Happay Story

B2C wallets like Paytm and Mobikwik are known well enough. The B2B wallet story, however, is still in its nascent stage. Happay is that wallet which helps companies manage their expenses through employees, using corporate wallets.

Varun Rathi and Anshul Rai were classmates at IIT Kharagpur. They worked for 2 years before they started up. After toying with different business ideas, they zeroed in on payments, and thereafter, quit their jobs.

Happay started as a platform for splitting payments or transfer money through its wallet. However, the team, even with over 2 lakh registered users, was unable to find a good revenue model. They pivoted to address B2B payment management hassles. They have tied up with Ratnakar Bank to issue corporate cards which double as expense management system for the company. The companies can issue these cards to all their employees, and, at the back end, track, or even cap the permissible amount for each card.

Here is an excerpt from Varun’s interview with iSPIRT:

Why did you Startup?

VR: “I come from a business family and so, I think I inherited the urge to start something of own business. It was different from a typical Marwari business, because I wanted to make a technology business that was scalable”.

Why did you choose to address payments?

VR: “The payments market in itself is globally very large and scalable. So even if you solve a small problem in payments, it can go big.

Last 5-10 years have seen a lot of sourcing through wallets. So we thought this was the problem we should solve. Our solution was quite a hit between students and young professionals. However, there was no strong revenue model. Also, we had to go to all vendors and get them to accept those payments through our instrument, which was proving difficult.

On the other hand, a lot of businesses would come to us looking for payments solution. There was no product that would address their issue. So we decided to pivot.”

You decided to pivot from B2C to B2B. What were your major challenges?

VR: “First biggest challenge was to unlearn whatever we had learned and focus exclusively on talking to customers which we didn’t do with the first product.

The first product seemed more intuitive to the team, as we ourselves were the customers. This time around the team talked to over 1000 customers to understand their problems.”

As for aligning the team, Varun shares, “Our team was very young, with no one with more than 2-3 years of experience. So they were open to learn new things. Besides, it took us 9-10 months, to come up with the new product. This gave enough time to the team to align themselves.”

Next challenge was in terms of requirements of the business. “With a B2B product, we realized that businesses needed handholding at every step. Where we scaled to 2 lakh registered users with just 5 members in the team, this time around, we ended up hiring for different teams, taking the number of employees to about 100.

We hired the first person that could give a demo to the customers. Then we needed someone for lead generation, as the product does not automatically reach the target audience. Even after a customer is acquired, we needed to hire for relationship management and customer support. The customers even after signing up would not take the next steps themselves.”

What are the challenges in coming up with an expense card? Why have other expense management companies not done it?

VR: “ Getting such a card and its integration in place, is a difficult process. It requires a license, partnership with the bank, a certification with VISA, and a strong technology team to support all of it. It takes about a year to complete just the processes.

We were in the business of payments, from the start. So our initial aim was to develop applications over the payments platform. We first solved the payments problem and then later on built expense management software over it. Other players made the software and started selling it. They never had the intention of going deeper into the payments problem.”

How is scaling a B2B business different from a B2C?

VR: “There are both pros and cons. B2B is slow and time taking but steady. There are some safe landings in between, so I cannot go down all of a sudden, as is the case with B2C. I can become an overnight success in a B2C product, with maybe some good PR but that can go away in a second, as it is very fragile and there is a lot of competition. In B2B, customers don’t sign up that fast, but they give you time. Once you have their trust, even if something is not perfect, they give you a month or 2 to make it right. That gives more stability to the business.”

What are the 3 things you wish you knew before you started?

VR: “Launch soon: One mistake we made was not launching the product soon. We, like most other companies, were trying to build a perfect product. But the sooner you take it to the customer; the steeper is the learning curve.

Talk to your customers: We assumed what our customers needed and built the product around it. Customers don’t know what they need till they see it. So let them see it.

Making the team will take time: Time required in hiring and nurturing team is very high. It takes almost 50% of our time. We didn’t account for it from the start and this has come across as a major learning.

What is your advice to other people starting up right off the college?

VR: “Understand the market first. If you start fresh out of college, you can take more risk. In terms of technology, you can stretch your limits, as you don’t have any responsibilities. But scaling brings problems. Hiring, building and managing the team and responding to the market needs more finesse. Understand the market so that you have at least some idea of how to respond.”

Corporate wallets address a very crucial bottleneck in managing expenses in an organisation. We wish Varun and his team at Happay, all the success.

 

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If you have a B2B Product, here are 5 reasons why you should apply for #InTech50

If you have built an B2B Product and have aspirations to take it to a global scale, here are the 5 reasons why you should apply for #InTech50.

InTech50

  1. An opportunity to showcase, get validation of the concept and product direction, better understanding of business value in the enterprise from Global CIOs.
  2. High probability of being selected by Global CIO’s for pilot or early adoption.
  3. Possibility of being selected by large product companies for add-on/bolt-on value add/partnerships to their large scale product solution sets.
  4. Potential possibility of getting investors attention due to interest/validation from Global CIO’s/large product companies.
  5. Getting selected in the elite #InTech50 list and subsequently getting a high degree of visibility from different stakeholders especially media coverage.

The possibility of all this happening without the need to travel out of country is real! This is the 1st and only platform for Enterprise products to showcase their products to Global CIOs.

Only the 50 shortlisted companies will get to attend the event. So what are you waiting for, go ahead and apply, the last date is 18th Feb 2014.

Read more details here – Announcing InTech50 for 2015

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Why B2B Startups Need an Enterprise Integration Strategy

B2B startups usually solve a unique problem that existing enterprise applications do not address. In some cases, they even create a new solution niche as they expand their customer base. As your B2B startup grows and acquires more customers and users, it is critical that the early adoption rate is not only sustained but multiplied. Integrating your new product with the enterprise ecosystem should be an important part of your adoption and growth strategy.

Effective enterprise integration stems from designing your B2B product to support an API framework. The framework itself can be built incrementally, but it’s important to have the API hooks in your product that allow external applications easy and secure access to data, product functionality and workflows. You can even have a few out-of-the box integrations that showcase this capability and provide your sales team with additional ammunition to convince that difficult prospect they have been chasing!

From a product adoption point of view, there are a number of advantages that B2B startups can derive from an enterprise integration strategy:

  • Product access and recall: Enterprise users already employ a number of applications in their day-to-day working. Integrating your new product with these applications makes your product easily accessible and increases the number of user touch-points.
  • Barrier to entry for competitors: It is harder for a competitor to replace your product at a customer where you already have multiple enterprise integrations in place. Your product is not just used by the customer, but well-entrenched in their ecosystem!
  • Process integration: Integrating with one or more processes and making your product a part of enterprise workflows will help formalize usage and prevent it from being just another startup pilot deployment that ended up in a narrow enterprise silo.

YourB2bProduct

What should you integrate with?

  • Corporate Directory (SSO): Probably the first integration you should implement at any customer. I’d recommend making it practically mandatory for all enterprise customers you sign-up, and a default offering in your basic sales package. In this day of multiple online accounts, no user wants to remember another username/password combo for a new product. Integrating with your customers’ corporate directory and enabling single sign-on (SSO) will significantly ease the access, increase usage and speed-up adoption in an enterprise.
  • Search Integration and Intranet Portals: Often the most frequented applications in an enterprise. Integrating with intranet portals are a great way to increase your visibility at a new customer, by leveraging these footfalls. If the customer has federated search implemented, search integration will allow users to discover your product when they are looking for something relevant.
  • Domain Specific Applications: If you have an L&D product, you must have integrations with the customers’ existing LMS, assessment applications and the like. If you have a nifty HR tool, integrating with their employee management systems and ERP apps is a must.
  • Critical Applications: Most enterprises have one or more critical applications that are essential for operations and are used by employees on a daily basis. Finding a way to integrate with these applications (even if they are outside your domain) can be a great way to make your product a part of the critical path of the organizations daily working.

Enterprise ecosystem integration is a key driver of B2B product adoption strategy. Executed well, it will pay rich dividends in terms of product usage, revenue and customer longevity.

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Product Management mantras from the 26th Playbook Roundtable

The 26th playbook roundtable was held last week (8th March 2014) at Delhi NCR and brought together over 15 startup and product practitioners to discuss and gain insights on some of the challenging aspects of growth and monetization in product companies. This roundtable was hosted at Eko India Financial Services office in Gurgaon, and was led by Amit Ranjan, Cofounder of Slideshare, and Amit Somani, CPO of MakeMyTrip. In a span of over 5 hours, a diverse set of topics were discussed. Prominent takeaways from the roundtable were insights on approaches to pricing, virality, growth decisions, pivoting, user experience etc. The following paragraphs detail the key learning from each of these above aspects.

Pivoting in a Business

Creating a successful company is essentially a search for the repeatable and scalable business model. To succeed in this search, companies should frequently make and test predictions about what will work in their business models. Businesses, no matter, which stage they are in are always pivoting. As a business, while you do focus on your revenues, but you also need to constantly keep thinking what will drive the revenue in 3 years from now and ensure that you slowly move in that direction. Of the so many internet companies, perhaps only a handful will survive 10 years. Amit Somani mentioned how MakeMyTrip is constantly looking at the next big thing. It started from a flight booking venture for NRIs to become the largest flight booking portal for the Indian market and is already evolving to cater to hotels and holiday packages. The next challenge for the company is mobile and ensuring that the company is successful in an increasingly mobile world.

IMG_2851Amit Ranjan talked about how often ventures have to 3-4 side projects or “distractions” that help you understand what will work in a fast changing industry and ensure you evolve to address these changes.

Moving from early adopters to 10x Growth

One of the best ways to achieve 10x growth after successfully validating your product and without spending too much or no money is virality. By definition, virality is designing and engineering your product such that it markets itself. A viral product derives much of its growth from its current users recruiting new users. A user could recruit another through a simple invitation (“Check out this product, it’s cool/useful/entertaining!”), or directly through using the product (“I want to send you money on PayPal!”). Virality is not an accident. It is engineered. Virality is more about width and depth. Amit Ranjan shared interesting insights on how the homepage of Slideshare during the initial days was designed for virality (with several banners and stickers to attract audience) during the initial days and when the portal was able to achieve significant growth, the homepage was redesigned for user experience.

Prioritizing Customer Inputs in a B2B Product

If you manage a product or service in the business-to-business (B2B) market, customer requests for features will be a regular part of your work. Requests come in through the sales team, service reps, and senior management, as well as directly from customers themselves. This makes it difficult for companies to decide which feature to include in the product or not. A good thumb of rule to decide whether to include the feature or not is that if 3 customers want it or a pushy a customer wants it and you can sell it to 2 more customers, then you should go ahead and include that feature. A key issue is to how do you know multiple customers have the same request? A common way is to utilize software which allows customers to post ideas, suggestions and requests. There are idea management providers that are good for this. Or you can user customer feedback sites. These asynchronous, always-on, open-to-all sites are well-suited for capturing suggestions.

IMG_2852In addition, you may need to check other areas. Your email often contains customer suggestions. Or you have a service ticket database you can check. Relevant knowledge will be in people’s heads, those who directly work with customers.

Also, it is very important to validate this feature. This can be done by rolling out first to your employees and then to few customers. This will help validate your thoughts.

Documentation and User Training

Generating user training manuals and videos can be a tedious job, especially for ERP kind of solutions, especially when the product is frequently undergoing changes. Also, the general trend seems to be that users have stopped reading trend. Even if people did decide to read the instructions, showing too many at once increases users cognitive load. Because users cannot read the hint overlay and use the app at the same time, they are forced to memorize the instructions and then apply them. Thus, it is more effective to focus on a single interaction rather than attempting to explain every possible area of the user interface.

Rather than generating documents and videos which will very soon become redundant, a better approach will be to have built in CTAs in the product to help/guide the users. This includes things such as built in FAQs (built using services such as Zendesk), using coachmarks etc. Presenting hints one-by-one, at the right moment, makes it a lot easier for users to understand and learn instructions. This interaction pattern has the added benefit of teaching the user at which point in the workflow these interactions or functions become applicable.

Making Sense of Data

As a product usage grows, enormous amount of data gets collected and sometimes making sense of the data becomes a challenge for Product Managers. It is no wonder that big players such as LinkedIn, Facebook etc. have large teams comprising of data scientists. Data crunching from this team of scientists even help the companies to validate the probability that a particular feature will be liked by their audience.

Product Managers are knee deep in the product and data can help take an unbiased look at the product, often yielding amazing insights and learnings. Data Analytics are important for one major reason: What you don’t measure, you can’t improve. Without knowing what the state of the system is, it is very hard, if not impossible, to do much to change or affect the system. You can, of course, make changes  blind, but without analytics you will never know whether the system was changed or whether nothing happened. It allows you to see what is currently happening, make a change and see what effect the change has.

IMG_2849A good way to make sense of data is to have an hypothesis and then look for local maximas. Apart from that, product managers can apply operations such as segmentation, funnels and cohorts to make more sense of data. Over time, as the system changes and improves, the KPIs (and consequently the metrics) will change, which in turn leads changes in what needs to be measured. It is likely that new flows and metrics will be discovered that prove crucial to the system so whatever the analytics used, they will need to be continuously adapted to meet this change and keep you on top of what’s happening in your product.

Encouraging Users to Sign Up

For a consumer product, completely logged in experience versus a logout experience is a choice between distribution and engagement. Slideshare and Youtube offer a complete logout experience as users do not need to login to access the portal. Linkedin devised an interesting way to incentivize users to sign up. They show a glimpse of profile to users who then need to sign up to view the full profile. It is also imperative that the process to get users through the front door of an application and engaging with content needs to be as simple and seamless as possible if an organization wants to win and keep mindshare.

Increasingly a lot of companies are using gamification, but it is more geared towards engagement rather than acquisition.