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A personal introduction to #SaaSx4, and why I believe Chennai is the place to be right now for SaaS startups

I have worked with iSPIRT for many years now and one of my key lessons has been around the dynamics behind community and ecosystem building. I have learnt that just having a plethora of startups in one geographical location doesn’t make that place the natural epicenter or capital. There is something more to it, an X factor that goes beyond mere arithmetic.

This X factor is something that I think Chennai has.

There is no doubt in my mind that Chennai is the capital of SaaS startups in India today.

Firstly, the numbers themselves are mighty impressive. Just between Zoho and Freshdesk, two of India’s bellwether SaaS companies, there is around $400m in revenue, about a $100+ million in funding and around 4000+ SaaSemployees.

But what is more significant is that around tentpole companies such as these, a massive ecosystem for many other SaaS companies has been created in Chennai. And this is going from strength to strength as we speak.

To explain why I am personally excited about Chennai and its focused and committed founders who are building companies in this same mould, let me go down memory lane a bit. If the story seems a bit rambling, please indulge me as it is a personal story that is close to my heart.

When Chennai was Madras

My early memories of Madras are when I was probably seven years old and my uncle was posted at the Tambaram Air Force station. When we travelled from Delhi to Bangalore by train, the GT Express would halt in Madras for 5 hours as the engine would get changed. Our uncle would pick us up and we would go to one of the beaches. It was also probably one of my early experiences by the sea. I also got to spend holidays a couple of times in the quiet and green Air Force Base in Tambaram.

Image Courtesy — FriendsofChennai

I got placed by NIIT as a GNIIT in a Madras-based software company called RiteChoice technologies (Yes, I was a GNIITian!). They had built the back office software for the National Stock Exchange and I joined as a Support Executive to help them with the sales/support/installation of the software in the Delhi region. We got intensive training about the stock market and how the software functions at the company headquarters. It was great fun those days as you worked for 6 days and the 7th day would be an off site with colleagues who had come from different cities. In those days, North Indian food was hardly available in Chennai and it was tough to have idli/dosas for almost two months (no offence to all my South Indian friends!). The software segment was just picking up at that time and there were very few IT companies.

Ritechoice was a product company at a time when we really did not know the demarcation between a service and a product organisation, and their other software was called Suxus. I remember interacting with the founding team; they were full of passion and keen on building more products.

The Ramco mafia

I moved on from Ritechoice after six months as we were not able to sell/support the software in Delhi. There were lot of changes being done at NSE and in hindsight, I now understand that we were not able to find the product market fit. I continued with my journey of working with Internet startups with DSF Internet & Trisoft Systems, until NASSCOM happened in 2002. I was again able to interact with a lot of software companies.

In the early days whenever we used to talk about products, the company which drew all the limelight was Ramco. It was probably one of the fastest growing companies then, selling ERP software and making a big impact in the user community. It was fighting SAP in those days. I remember that there were around 60 ERP companies at one point of time. Other notable companies in Chennai at that time were Polaris Software(now acquired by Virtusa) and MyAdrenalin. Apart from these companies, there were a few IIT-Madras incubated startups like as well.

And there was another small company called AdventNet, which had just started making some noise.

The Role of Proto.in

I was introduced to the Twitter/blog world by Kiruba Shankar & Vijay Anand. I remember following them and getting to learn about social media through some of the sessions at NASSCOM. In the early days of the startup ecosystem, very little action used to happen in Chennai, but Proto made a big dent by getting all startups under one umbrella. For me attending Proto gave me exposure to the startup community. I got to see Ashish Gupta surrounded by many people and later on got to know that he was one of the founders of Junglee. The event was at IIT-Madras and it was hard to get into any of the halls. They were just full. The man behind the show was Vijay Anand. There were others, of course, nothing in our ecosystem is a one man show, but Vijay did a magical job of getting it all started.

I remember how Shalin Jain proudly demoed DoAttend which got built because of Proto. Wikis were used quite extensively first in Chennai for Proto: I’m yet to see another event, even in these event-rich times, which uses Wikis extensively.

Some of the companies that showcased at Proto 1

Some of the well known companies like Myntra, iXigo, Drishti (Now Ameyo), ValueFirst, iCreate (Now Fintellix), Novatium, etc launched their products at Proto 1. Do take a look at Proto 2 as well. Thanks to Amit Ranjanwho continued to upload all these decks and also write about them at WebYantra. If Proto was alive today, it would have probably been the biggest enabler of the startup ecosystem in our country. Pity that it isn’t, but we need to remember that the movement actually started in Chennai.

Me at NASSCOM, and how the Emerge community took off

Some of the initial people who really made the EMERGE community happen were people like Suresh Sambandam of Orangescape (now KissFlow), Late Mr. Raja from Coromondel Infotech, Lakshman Pillai of LPCube, and George Vettah of Kallos. These were also product companies and played an important role in building the community. I continue to stay in touch with Suresh and leverage him as much as I can in building the ecosystem.

Apart from Delhi, it was the EMERGE conclave in Chennai that was a roaring success. So many people took ownership of the event. It was almost completely driven by people in Chennai and we successfully were able to build a community for product companies.

For the first time, Sridhar Vembu of ZOHO spoke at a NASSCOM conference. It was at the EMERGE that ZOHO won an Innovation Award for the work that they were doing to hire freshers and train them. They continue to do so and it’s also very impressive to see the ecosystem that ZOHO has built in Chennai. The ZOHO mafia (Girish/Freshdesk, Arvind/Zarget, Sridhar/Credibase, Krish/ChargeBee) has created many founders (around 42, says Quora). The other Vembu brothers are also still going strong. Clearly ZOHO has played an important role in creating a culture in Chennai.

The unfolding story

In the early days of iSPIRT, I did get to do some playbook roundtables at the Orangescape office. I remember Ashwin Ramaswamy of PipeCandy(in those days it was called ContractIQ) volunteered for most of the playbook roundtables. I remember I got introduced to Girish Mathrubootham by Sairam Krishnan for the first time in their small office….met them in the boardroom and i remember one of the members was working in the boardroom as they were falling short of space 🙂

First Playbook by Shankar Maruwada in Chennai

I did get to do some playbook roundtables in the early days of iSPIRT, basically i would use Chennai to validate some of the playbook roundtables. Most of the playbooks were done at Orangescape and more recently Aditya Sanghi(Hotelogix) got some 6–7 founders from Bangalore to learn SaaS scaling from Freshdesk. I remember, it was one of the insightful playbooks and I got to meet Sanjay Parthasarthy from Indix for the first time at their office and also did a tour of the ZOHO campus which was quite far from the city.

In 2014, I was in Chennai for some meetings. It was around the time of SaaStr and it was then that it struck me that two large SaaS companies are already based out of Chennai, that and many others like KiSSFlow, UnMetric, Indix, Chargebee, Pipecandy and Zarget were all SaaS companies. It became clear to me that this city had a strong DNA of building SaaS/B2B products.

I and called up Shekhar Kirani from Accel (I consider him to be the Force behind the SaaS ecosystem in India). I bounced this idea off of him, asking for support for something around SaaS in Chennai. I got a green signal after which I reached out to Suresh and Girish. I got full support from them and in less than 20 days, we pulled together SaaSx Chennai.

Full credit to Suresh Samabandam for coining SaaSx. By the way, EMERGEOUT was also his coinage. The energy at SaaSx is always very high and we did the first three editions every six months. The beauty of SaaSx is that it is by entrepreneurs for entrepreneurs and some real sharing is been done by people like Girish, Suresh, Avlesh, Paras, Krish, etc..

Playbook Led by Avlesh(WebEngage) & Suresh(KissFlow) at SaaSx

As iSPIRT, we are blessed to have strong support from such people who believe in paying it forward and are happy that we have been able to create a robust & safe place for SaaS founders. We will continue to stay focussed, curate the audience, and ensure that the platform becomes a meaningful one for SaaS founders in India.

Audience from the first SaaSx

We are all excited about the fourth edition of SaaSx in Chennai on 17th March, and I’m proud to continue to bat for the city (like Krish Srikkanth) and make an impact in the SaaS ecosystem.

Edited by Sairam Krishnan & reviewed by Sumanth Raghavendra

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India SaaS Survey 2016 – Decoding our SaaS industry

Strength of a industry is not just judged by how much it contributes to the economy. There are a number of factors to consider and surveys play a major role in painting a clear picture.

The India SaaS Survey is all about getting the pulse of the burgeoning SaaS ecosystem in our country. A survey of this kind is indispensable in drawing an insightful analysis and in getting credible benchmarking data about how the industry is shaping out. Though nascent, the SaaS industry has a lot of potential. The data from the survey is useful not only to help entrepreneurs and investors but also showcases the prospect of the industry to technically sound aspirants looking to step into the industry.

Signal Hill, India’s largest software investment banking advisory practice in partnership with iSPIRT, the Indian Software Product Industry Round Table decided to conduct the India SaaS Survey last year. In their commitment to refreshing results of the survey annually, the second edition took shape. The learnings of the first edition has made the second iteration a better fit to the cause.

iSPIRT puts the number of respondents who took the survey at 10% of the entire SaaS ecosystem in India!

This sizable sample size with variation ranging from bootstrapping startups to the biggest names in the industry is what sets it apart from the rest. As the SaaS ecosystem in India continues to grow, participation is bound to further increase and India SaaS survey would be the benchmark.

Image credits to The Economic times

Here are the 7 key takeaways of the India SaaS Survey 2016:

  1. NCR has moved up three places to the second position and established itself as the latest hotspot for SaaS companies
  2. Vertical focussed SaaS players occupy majority share of the scaled and funded respondent pie
  3. Enterprise focussed clients have reported higher median growth rates compared to SMB/SME focussed players
  4. Though inside sales is by far the most preferred and effective sales channel, post the $1Mn ARR mark respondents do report an increased usage of feet on street (which is still #2 after inside sales)
  5. ‘Try and Buy’ is the most preferred sales model (vs. sales channel)
  6. Horizontal and Vertical SaaS players report similar median growth rates, however companies that focus on the US as their primary market (as against India or Asia) reported distinctively higher median growth rates
  7. The median CAC payback period (for >$1Mn ARR) is 6-12 months

Do have a look at all the data we dissect with the survey:


We are open to your suggestions to make this survey better with time. Please do let us know what else you would love to see us cover next time. Write to us at indiasaassurvey(at)signalhill.in

On behalf of Signal Hill & iSPIRT Team

Nishant & Varun(SignalHill), Krish(ChargeBee) & Suresh(KiSSFlow)

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Behind the scenes of $2 billion Indian startup movie #PNgrowth

Last month, for the first time, I witnessed something really special. Even for someone like me, whose very job and calling is to evangelise this nascent software ecosystem of ours, this was something extraordinary.

I’ve been doing this a while, and what happened last month was one of the best feelings I’ve had in this journey.

This is what happened: Some of the leading B2B enterprise startups in the country, including Freshdesk, Eka Software, Capillary, Zenoti, FusionCharts, KiSSFlow, etc all got together under a single roof.

This is what they got together for: To help 52 other, smaller B2B startups in achieving scale, like they have.

It’s no exaggeration to say that the founders of these companies are some of the most important product leaders we have.

In the first session itself, Shekar Kirani pointed out that a platform like this will not be easily available, and the assembled startups needed to leverage the best from the network and from the folks who had arrived with the the express intention of helping them. And the product leaders who also made an important point – that they did not want the new age startups to go through the same grind, or make the same mistakes they had made in their years of scaling.

I was amazed. It is almost never that you see such accomplished professionals come together towards helping and nurturing young startups from their own learnings.

And what was this? What was happening?

This was the 2nd edition of #PNgrowth.

The first one had been in Jan 2016 at the Infosys Campus in Mysore where we had assembled around 186 founders to help companies think about Category Leadership. It went really, really well, but the feedback was that that perhaps keeping it focussed for fewer founders would help the cause better.

Many heated discussions were conducted over breakfast, lunch, dinner, and beer (especially beer) on the program for the 2nd edition and on how we can add value to the content.

These conversations were typically 4-6 hours long, which meant that the entire program/content took us over 200 hours with 12 founders brainstorming for the past 3-4 months.

It really did take us that long.

And those deep discussions based on the 1st edition’s feedback was what the program for November was based on.

And now that #PNgrowth 2016 is over, I decided to take a look back and share some of the learnings in organising this, and on how we pulled this together. 

This year, the program was designed to help companies chase ‘Good Scale’, that is, to achieve high growth without compromising on quality. There were 52 founders with us, from all over India, and a few from outside as well.

Before we get into the details, a larger question must be addressed again, largely because it keeps getting brought up. This time, I’m trying to use a different approach to explain this. Bear with me.

WHY IS iSPIRT DOING THIS ‘MOVIE’ CALLED PNGROWTH?

iSPIRT’s mission is to make India a ProductNation. We have many initiatives like Playbook Roundtables, PNcamp, etc which are focussed around building products and helping companies achieve good scale. Although there are many accelerators in our country, very few offer value to the founders/companies. Keeping this in mind, iSPIRT wanted to do something unique and create a platform which would help companies think about growth in an effective manner. More importantly, we want to make ongoing mentorship accessible to the founders.

_mg_0662The goal was to create 8-10 companies every year which would eventually go on to become $10mn revenue companies in the next 3 years.

WHO ARE THE DIRECTORS OF THE MOVIE? 

These are the co-chairs.

The first edition of PNgrowth had just finished and I was looking for someone to be the architect for the second edition. I met Shankar Maruwada for lunch at Muffets & Tuffets and was having a completely different  conversation. But, as we touched upon the PNgrowth topic, Shankar had lots of suggestions on how we could do this better. I immediately requested him to help in designing the program and helping me organise it better.. He accepted graciously, and was keen to help.

_a5a7389My next request was to get Pallav Nadhani involved again. There is a reason for this. Pallav, in many ways, was the person who forced us to think around Category Leadership. The first meeting took place at Pallav’s place which went on till 2:30 am.

By then, I had had several interactions with Aneesh Reddy, and the early playbook roundtables on Product Management had been done by him. I reached out to him and he was very keen to be part of the program and help us.

With Shankar, Pallav and Aneesh on-board, the pillars of the event were erected.

WHERE DID I FIND THE STAR CAST FOR THE MOVIE?

These, of course, were the facilitators.

Around 4-6 months in advance, we started working on the content for the event. Various topics were discussed. One thing was clear to me: Every founder had immense passion and commitment to add value to a certain topic. The format we had in mind was to make very interactive session. All of us had had enough of the ‘sage on stage’ approach. The founders were to lead sessions and work along with the participating entrepreneurs to help them extract maximum benefit.

Many discussions later, Pallav & Shankar actually started with using the frameworks & mindflips and were later joined by Girish & Aneesh. Manav & Shekhar also used the same in their session. 

_mg_7722It was great to see that all the facilitators did an outstanding job of delivery of the frameworks and ensured that they shared real life stories and lots of data and numbers from their companies. What was more important was that they made sure they spent time with all the attendees and ensured they received personalised attention. They were able to build a personal connect and trust within the startup community by sharing internal information even though they didn’t have to, thereby making the discussion even more credible.

WHO CAME TO WATCH THE MOVIE?

Oh, that. We had huge demand for tickets from the audience, the founders of India’s growing startup community.

_mg_9870HOW DID WE THEN SELECT WHO ACTUALLY GOT TO SEE THE MOVIE?

This time, right from Day 1, we only wanted to get select founders to be part of PNgrowth.

To begin this selection process, we laid out which stage of startups would benefit from PNgrowth. We then went on and created a list of founders and reached out to them. Apart from this, we reached out to folks from within the eco-system and got them to recommend companies to us.

Each company was recommended by atleast 2-3 founders from the PNgrowth curation team. We did zero marketing for PNgrowth except for a video, which we used to communicate to potential participants. We received overwhelming response for the event thus putting me in a fix at several situations where I had to inform founders that they have been rejected for a program/event. It was difficult, but in the interest of the event, it had to be done.

_mg_8362
We finally had 54 founders who confirmed their participation, out of which 52 showed up for the bootcamp. These companies were divided into groups of 6 based on the type of customer/geography they were catering to.

WHERE DID WE HIRE THE SUPPORTING ACTORS?

These were the mentors, and we were able to get around 14 founders as mentors and were simply amazed by their commitment for the two and a half days of the event. Mentors were involved in all facets of the event – from intense board room discussions to the dance floor. Let me go little more deeper on the role that they played. In every session, the founders got access to few frameworks, mindflips which they had to fill and discuss with their peers + mentors. Lot of learnings were shared by mentors and it became very valuable to the founders. Very few of them tweeted from the program as everyone was busy interacting, engaging, absorbing content, but here is one of the tweets which acknowledges the mentors.

_mg_9832WHAT ABOUT THE CREW?

Getting to them, the volunteers.

In my work, I get to interact with many volunteers in many initiatives, but this time the commitment and the passion with which the volunteers worked was unimaginable. Folks would go to sleep at 5am and be ready next day at 8am. They would ensure that mentors/founders have had breakfast, etc and would go an extra mile to take care that founders are focussed on their work and don’t get distracted.

Volunteers also interacted with the founders to understand if the pace/level of the sessions suited them. Lot of planning was done in advance that each and every person who is part of PNgrowth goes back with a WOW experience. I still wonder where they get so much of inspiration from.

_mg_8120I don’t know if i would ever be able to do something like that. Hats off to all the volunteers who put together an awesome experience for the PNgrowth family.

SO, WHAT WAS THE MOVIE ALL ABOUT, THEN?

Day 1

The Founders started with a cricket match between the cohorts itself. 

Sharad Sharma, our guiding light, kick started the event with his words of wisdom for all the founders.

And then it began with Pallav’s session on Who are you? As founders, entrepreneurs have to pitch or sell their ideas constantly, so as to inspire the listener to believe in their dream to either fund the idea, join the team, tie up with the startup, or write about the startup. Is there a method to this? Can this be an acquired skill? 

In this session, founders learnt and practiced a simple framework that enables them to improve their ability to pitch their ideas in the shortest time, to the desired target audience – VCs, journalists, co-founders, customers, business partners, and employees.

The next session was focussed on how to maximise the value of your product. If you as a founder were to increase the perceived value of your offering (Increase average MRR by 1.5X and/or reduce churn to 0.5X),how would your economics change? How would it change your CAC, margins? What would you as a founder then do differently with your product strategy, go to market strategy (positioning, marketing, channel, pricing), team/organization structure, to increase pricing by 1.5X, in the scenarios below as relevant to you. This was followed by an interactive session with the mentors. 

This was end of Day 1 and then we had networking dinner, drinks, some dance and lots of conversations led by Vinod & Ashish.

Day 2

The second day was a more power packed with two sessions. To their credit, the founders were highly engrossed in their sessions, sans their mobile phones and laptops which helped in making these sessions successful.

During the first half, Girish and Aneesh engaged in an extremely fruitful session on product-market how to scale 10X with emphasis on how to establish your sales funnel and building a repeatable sales cycle. This session covered on selling processes from SMBs (by Girish) and enterprises (by Aneesh). They also shed some light on how pricing, positioning and selling varies from one geography to another.

Apart from this, Suresh also gave his insights on selling global products out of India.

_mg_7993The complete session went on till almost tea break after which the candidates came back in for the third and final session by Shekhar and Manav.

This session was meant to give a befitting end to the two rigorous days of activity.

While Manav spoke about how to choose your niche category and expand to other similar industries and geographies, Shekhar’s session was centred around what a VC looks for a in a startup. In the session,

Shekhar did a Q&A round with Nags and Girish on what it takes to build a successful organisation.

He also delved a bit deeper on aspects like how to choose the right market and how to intelligently figure a way out of a market and move into one that is expanding by extracting maximum business value.

Here Raghu also added his thoughts on what it takes to raise venture capital and how one should structure an organisation for a CEO to utilise his time in the most efficient manner.

Though the mentors tried to cover as much ground as possible over the two days, they took questions from audiences on anything they still might have a doubt about.

After this was a complete group photograph since some of the mentors had to leave that night. The energy of the picture speaks for itself. Before calling it a day, the founders were given tasks/homework for them to present on the final day.

Day 3

The third day, we had some inspirational stories from Sanjay Anandaram(Seedfund), Mohit Dubey (CarWale),  Phanindra Sama(RedBus), Raghunandan G(TaxiForSure), Sanjay Deshpande(FortyTwo Labs). We had actually planned for only Sanjay to talk about “entrepreneurial mindset” and then we thought about inviting all of the above folks to share their energy.

Something which we had planned for 20-30 minutes went on for around 90 mins and it was an absolute pleasure to hear some of the learnings/failures from all these founders. Below is the NPS score of 89 for PNgrowth 🙂 

nps-score-pngrowthAfter this, all founders were made to do this exercise on “Getting to 3X Growth in 12 Months”. All mentors with their cohorts spent time with the founders and helped them on what they should be thinking about this. Six Founders got an opportunity to share with the whole group.

Finally Shankar invited all volunteers to share few words on why they volunteered for PNgrowth. With it, a spectacular three days came to end, with some photographs and a lot of hugs, cheers, and greetings.

For me, it was a great feeling to see all of this happen, and at this scale. This probably capped off the year of 2016 for me and iSPIRT as a year in which we were actually able to make the ecosystem function as a cohesive, united entity. Lots of work is ahead of us, but as I write this, I acknowledge a task well begun.

_a5a7717

Many thanks to Sairam for editing & Shruti for filling the blanks.

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Freshdesk at #SaaSx3

The story of how Freshdesk grew 500% in revenue in 12 months, and how Girish Mathrubootham and team went about telling us how they did it at SaaSx 2016.

“How many of you recognize this man on screen?” Girish Mathrubootham, CEO of Freshdesk, asked the room. He was gesturing to a picture of a man with thinning dark brown hair, a wide forehead, and a familiar crooked smile. A lot of hands went up even as people called the name out. Quentin Tarantino, people murmured, the eccentric filmmaker.

“Today’s presentation is going to be like a Tarantino movie.” he announced. “There will be different characters in it, narrating different stories that were happening at the same time. Hopefully, you’ll be able to put everything together in the end.”

There was a ripple of laughter as Girish turned to the four other people with him. They turned out to be co-panelists; early employees of Freshdesk who were going to join Girish in sharing inside stories from way back in 2013.

Panel-Freshdesk

The last presentation to round out SaaSx3, a full day event for founders of subscription-based startups, Girish’s session was literally what everyone was waiting for. The session was supposed to take the attendees through Freshdesk’s journey from a $1 million to $5 million in a year. For the people who’d attended SaaSx2, this talk was the sequel to Girish’s presentation the year before about going from $0 to $1 million.

But before Girish slipped into the nitty-gritty details, he began with a disclaimer. “I’m going to be sharing some real numbers,” he said. “Learn all you want. Just don’t take pictures. And please don’t put anything up on social media.”

If the Tarantino joke hadn’t gotten the attendees to sit up, this sure did.

Chapter 1 – The First Million

Girish was true to his word. In typical Tarantino style, the first slide read “Chapter 1 – The First Million”. The year was 2013, he told us. The month, January.

And then, he was off. The next few minutes were a blur of anecdotes and insights, numbers and theories.

One of the highlights of this section was his “n-1 theory of pricing”, where he explained the reason behind adding a fourth “Estate” plan, at $40, to Freshdesk. The Estate Plan, he told us, went live with just one additional feature a few months before. This was intentionally done to make the cheaper “Garden” plan, at $25, look more attractive to customers. This decision, according to Girish, played a significant role in accelerating Freshdesk’s revenue.

Then, just to prove that he wasn’t making it all up, he showed us an actual investor report from January 2013. The report read that Freshdesk had crossed 84400 in MRR, which meant they had over a million dollars in annual revenue at the beginning of 2013.

But where were they going to go from there?

Chapter 2 – Happily Clueless

At the beginning of the year, Girish admitted with brutal honesty, his team had no clue about their target for 2013. Everything was up in the air; they were flying by the seat of their pants. He had a number in his head, a number he’d had, ever since he’d learned about Twilio and Sendgrid’s growth at Bessemer’s Business of API hackathon. But it was in his head and no one else knew about it.

Until this point, Girish was the only one actively talking, explaining and expounding. This was when his team jumped in to elucidate just how clueless they’d been. There were some candid stories about targets being set on a whim and how people would bargain with “G”, as they fondly called him, for more realistic numbers. As they spoke, we began to realize just how normal and confused Freshdesk had been before they had decided to go after the five million target. I’m pretty sure more than half the people there could relate to this because most companies go through something similar when they’re small.

However, Freshdesk was on the right track during this turbulent period even as they wavered over their targets. They moved to a freemium pricing model, offering three seats on their lowest plan, “Sprout”. An attractive offer, it helped them double their customer count in a month.

By this time, it was already end of March, however, and the team closed the quarter at an ARR of 1.4M.

Chapter 3 – The Big Dream

By the time Girish finally seeded the 5M dream in his team, it was April. A quarter had galloped by and there were only 9 more months in the year. Nobody believed it could be done. But try, they did and quite a few changes were done to spur them on.

  1. Monthly targets were changed from “no of seats sold” to monthly recurring revenue to make sure that the sales team knew where they were with the annual target. The small team was split so that there was one sales rep per geographical region and given their respective goals.
  1. The digital marketing team worked backwards from the 5M goal to create projections for the number of leads they needed to generate every month. This was done using assumptions based on existing numbers for conversion rate, ARPU and seasonality.

The team admitted candidly that the 5M target was the first time the sales and marketing team’s goals were aligned at Freshdesk. A lot of experiments were run to make sure they were doing it the smart way and not the hard way. Every 15 days, they’d check their course to make sure they were doing everything they could to reach the target.

As they began ramping up operations and aligning goals, the Freshdesk team realized that they needed more people to take care of the increase in leads. And they needed them immediately. Girish jumped in at this point to explain how they’d solved this problem by hiring “freshers” right out of college and put them in customer facing roles.

“It’s important to match people with work they will enjoy doing. I believe that you can’t put in something that God intentionally left out of someone.” He explained, emphatically. “So, when we hire a candidate, we look for talent. We know that we can train them for skill later. That’s why we look for people with good communication skills, who can interact well with your customers. Everything else can be taught.”

This was also when the pre-sales team came into being. A team dedicated to helping customers with their evaluation, pre-sales reps spoke to customers, understood their requirements and helped them fit the product to their needs. A one-two combo, reps would prep leads before they passed them onto sales to increase chances of conversion.

By end of Q2, the team had achieved an ARR of 2.1M.

Chapter 4 – Escape Velocity

While the aligned goals of sales and marketing gave them quite a boost, the team still had to look at other ways to scale their growth in a sustainable manner. The right, and obvious, thing to do next was to align the product to the business goal.

This was done, Girish explained, by splitting engineering into core development and customer development. A decision taken in tandem with his co-founder, Shan, this would ensure that while the core developers focused on building important functionality, the customer developers could take care of bugs, feature requests and migrations.

When this was put in place, the core team started working towards making the product attractive for bigger deals. With input from sales, the product team started adding features to the $25 Garden and the $40 Estate plans to support the business. Meanwhile, the customer development team worked on making sure that existing customers were happy and their revenue was safe.

At the same time, they also realized the importance of upgrade revenue in SaaS. Girish showed us numbers detailing how their free or low-value customers were upgrading on their own by buying additional seats. Without any effort from Freshdesk, the accounts were growing. As businesses grew, they stuck with the solution that had helped them out when they were small. It had an even bigger effect on revenue, thanks to compounding.

Girish referred to it as “the advantage of SaaS” and stated that every founder at SaaSx has the opportunity to take advantage of it.

When Q3 rolled to an end, the team was at 3.1M ARR.

Chapter 5 – The Last Mile

By this time, Freshdesk was running like a well-oiled machine. A lot of new processes and ideas were in place and the team continued to see the benefits of the changes they’d made in the previous quarters.

But as Girish put it, “Life doesn’t stop at 5 million. You will have investors asking you what’s next and you have to look for things beyond your current target.”

So even as they were busy chasing their target, the team had begun working on some long-term projects for the next year. This included the beta launch of their second product – Freshservice, a channel sales program to find resellers in upcoming markets and raising more money from existing investors in an internal round.

He also had an important lesson to share about the effect of high targets on team morale.

“If we’d gone from $1 million to $4.5 million (instead of $5M),” he explained. “It’d still have been a great achievement. When you set targets, you have to make sure that salespeople don’t feel disappointed while the rest of the company celebrates. It’s important to manage their expectations and make sure their morale isn’t affected.”

Chapter 6 – The Fifth Million

And then, it was finally time for everything to come together.

For his final chapter, the end of the year, Girish simply pulled up an investor report from January 2014. At that point, Freshdesk had crossed 408,566 in MRR. This meant that that their ARR, multiplied by 12, was approximately $4.9 million.

Had the Freshdesk team really not met their target? Was this whole presentation an elaborate hoax?

The room was hushed and still as Girish, channeling Tarantino like never before, explained that, in their hustle for the target, they’d forgotten to include one of their revenue streams in their numbers – the humble day pass, which teams could buy to allow temporary agents to log into their account for a day. This worked out to about $8500 a month and helped their overall revenue cross the 5M mark.

There was silence and then, wild applause.

Girish and his team ended the presentation with a question that they asked themselves in the beginning of the year. It left us all in deep thought about how we should be running our startups.

“Are we aiming high enough? Do we want to be happy with 25% YoY growth or do we want to chase 5x in 12 months?”
By the time the team wound up their presentation, it had extended to a little over an hour and a half, twice as long as it was originally supposed to be. But no one had really noticed the time.

Any audience who’d sat through a full day of sessions would have been tired by 8 PM. An audience that had travelled from different cities to be there on a Saturday would have been exhausted.

Despite that, Girish and his team got a huge round of applause, a standing ovation and even a short Q&A session.

“What is your current payback period?” Someone asked when we opened up for questions. “Join us for SaaSx in 2019,” Girish remarked with his trademark wit, “-and I’ll tell you then.”

As I joined everyone to laugh and cheer for his reply once again, I realized the talk, like Girish had claimed earlier when he’d begun his presentation, had something for everyone – actual numbers, funny anecdotes, attention to detail and authentic storytelling.

All of it, combined with Girish’s genuine interest in sharing his experiences with the attendees, had made it special. I found this to be true of pretty much every session I’d attended at SaaSx, where the community was really helpful in sharing best practices and also on what to steer clear of.

Having said that, next year’s SaaSx has some pretty big shoes to fill. And going by the standards, the one after that, even bigger.

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Scaling from $1m to $5m, lessons learned by Freshdesk

I travel to India once every quarter to catch up with our India team based out of Coimbatore. I was planning to attend SaaSx for a while now and this time, it was perfect timing the event is scheduled on 2nd April, right in the mid weekend of my India trip. This is an invitation-only event, I’m thankful for the organiser to get me involved. With 200 attendees where the majority of them are founders and key people in some of the promising and growing companies on the Indian start-up eco-system, you can sum up the experience in a single word it’s “awesome”. Even though there were lots of sessions, round-table playbooks, product tear-down analysis, countless conversations we had between founders during the event, the one session by Girish from Freshdesk stood out and made everyone speechless. I wanted to highlight more about it here.

When Girish assembled his sales/marketing team on the stage and opened up the statement, please do not share anything I speak on this stage outside this room, and we need to get investors approval to reveal this data, I know something interesting is going to happen. It was kind of nostalgic moment for me, I heard a similar sentence from Peldi from Balsamiq when he opened his speech at Business of Software at Boston last year and that session turned out into one of the best sessions of BoS 2015 (Rookie CEO Grows Up. Reluctantly).

In that session, Peldi literally opened up some of the confidential emails he had with possible acquisition offers, the conversations he had with his team, and how they boldly stood against the offer etc. Girish did something similar down the lines showing the real reports he was sending to the investors, with some key metrics like revenue targets, projections, the goals they were setting for the sales team, how they aligned the marketing and sales team to work together, different experiments they were doing with several revenue channels, how they drop some non-performing channels, and so on. To respect the confidentiality of the subject I’m not going to go into the detail, but cover some interesting general topic Girish highlighted.

Everyone needs inspiration, most of the founders read tons of books, blogs, magazines etc (I haven’t met a single founder who said I never read any books). The problem is to get a single actionable item from reading a book takes hours and weeks, still you won’t be sure and just need to experiment and find it. But what Freshdesk team has shared is real data that took them from $1m to $5m in annual recurring revenue (ARR), which is priceless (note: the $5m is not their latest number). Every slide they shared had something for me to take away and I believe that’s the case for everyone.

I have known Girish personally for few years now and he is a kind of person who goes with the gut feeling and figure out what’s happening. I’ve captured some of his best statements during his presentation “Do best of your potential and you’ll eventually end up somewhere higher up”. This is such a true statement, you set your vision on $5m ARR and align you sales/marketing team towards that goal, and work backwards. Even if you don’t achieve $5m, for sure you are going to end up somewhere higher up than where you are right now.


The second best statement is on utilising the talent in the right way “Don’t try to put something into people, what god intentionally left out”, this is not the first time I’ve heard Girish saying this but this is something worth repeating. To give you a better analogy, if you take Sachin Tendulkar and ask him to do wicket keeping and complain he is not performing well, whose problem is it? Is it Sachin Tendulkar’s or the selectors? Same for start-up founders, understand the real potential of your team (team member) and place them in right places. Jim Collins highlighted this in his popular book “Good to Great”, it’s not just about getting the right people on the bus, and it’s also about setting them in the right places for you to be successful.

When it comes to pricing, Freshdesk made couple of important pricing changes during their journey, first one is introducing the expensive Estate plan (that time) as their last tier, they figured out people are always reluctant to buy the last tier, even if it has some interesting features, it’s more of psychological thing, and they figured out n-1 tier performs better, hence, they introduced the Estate plan with just gamification, the intention is not to push and sell this plan, but to sell the n-1 tier the “Garden” plan. They also made some important pricing decisions on how they structure their free offer. Previously it was 1 free agent on any tier, and they moved it into 3 agents free for life. There are a couple of key factors in this decision if there is only one person doing support then there is no necessity for a help desk system, and also, they are throwing away free agent license on each tier which the customer would have bought anyway. The key takeaway for me in this is when designing the free tier, make sure it’s useful for the people and also it’s aligned with your goal of eventually converting them into paid customer gracefully.

Getting to the unicorn status, the “triple-triple-double-double-double” formula. Girish highlighted this article from Techcrunch “The SaaS Adventure” during his talk as one of the influential blog that helped him to set the target of growing from $1 to $5m. The article explains how you scale to unicorn status, what are the benchmark numbers to hit. It’s $2m > $6m > $18m > $36m > $72m > $144m (i.e. triple-triple-double-double-double). If you need to be listed as the unicorn, then the magic number to hit is $144m ARR.

The other important information he shared is finding the magic number of leads for each sales person. At the early days, each sales person at Freshdesk were handling at an average of 800+ leads per month, which of course is not efficient. In order to fight against time, they were using automated email sequences to improve the lead quality. Girish accidentally bumped into this article from Hubspot “CREATING A SALES PROCESS FOR YOUR INBOUND LEADS: 150 IS A MAGIC NUMBER” where they discuss in detail about the magic number for a number of leads a sales person can optimally handle i.e 150 per SDR, and they scaled the sales team accordingly.

A little bit about customer success team, it’s very important to set up a customer success team as soon as possible to avoid churns. Most of you might know the leaking bucket analogy, if you have holes in your bucket, where your customers are churning regularly, then you’ll be constantly fighting against filling the bucket to maintain the level instead of growing. In a lot of companies it will be a bit late when you realise it, when you call a customer who has already left you, it’s way too late. They might have already set-up a system from your competitor, and you need to sit and wait to hope they won’t like the competitor’s product. Freshdesk has done similar mistakes in the past and now they have the process in place to avoid it.

Even though this article would have given you some interesting tips shared by Girish and Freshdesk team, there is no alternate to hearing directly from horse’s mouth. With the great sense of humour in his speech and ability to instantaneously crack jokes on stage, I thoroughly enjoyed the session, noted down some key tasks and set myself a target where I wanted to take BizTalk360 by the end of this year.

In the future if you get a chance to attend one of the SaaSx events, don’t miss it.

Guest Post by Saravana Kumar, BizTalk360

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Product Teardown at the “SaaS”y Day at Chennai: Chapter 2 on SaaSx3

The sea breeze was cool. And the SaaSy people went cool as well. Kiruba unleashed some tricks for networking that had the participants engaging in banter, fun and games on the lawn. It also wore off the participants from postprandial somnolence (carb coma) after lunch. The SaaSy bus by then had arrived from Bengaluru, and the participant number swelled to 150 or so.

Using your product as a marketing tool

Pallav Nadhani set the theme for #OneThing discussion involving of Siddharth of Practo, Nemesh of Appointy, and Ankit of AdPushup. He cited examples of MailChimp, which sends annual reports about the number of mails sent through its service, and Rancore, a research organisation that sent reports about Share Point, a Microsoft product for developers. He said that research reports set benchmarks for what works. He spoke of referral marketing and commission paid on referrals to existing customers as strategies to acquire customers without much of a marketing spend. Avlesh of WebEngage said that marketing does not exist in silos away the product. He spoke of incorporating the marketing element inside the product itself.

webengageOne strategy is using the “powered by *product logo*” inside the product to attract more prospects. This was especially used in a novel way. WebEngage chose a customer (of course, after a due diligence) to sell its low-priced product in an unpresent geography. Then the logo was added in the product to attract more customers in the region. The customer acquisition cost is reduced as a result. Nemesh of Appointy (which helps businesses to schedule appointments) has 118,000 customers, all of them acquired at zero cost of marketing. This was done through backlinks (two lines of codes in the product), which would indirectly show up in the Google search when someone searched for a tool for appointments. Ankit spoke of four strategies to customer acquisition without much marketing spend.

The VC speak

Mohan from Norwest said the SaaS multiples have compressed in the United States – it’s five times the revenue now rather than the 10x number that was the norm until sometime ago. He also said that SaaS companies have a history of not making a profit but was confident that it is possible to build a profitable SaaS company in India, which is capital-efficient.

Tarun of Matrix Partners clarified that now the focus has shifted to profitability of SaaS companies rather than growth. He said that growth expectations are tempered according to existing market conditions. Now, liquid capital is not available easily. He agreed that there was a time when growth was the focus when the capital was easily available. Now that capital has shrunk, it’s difficult to have a growth at the cost of profit strategy but the one focused on profits is the best.

Tearing down the product

Frictionless sign-up, a clutter-free website and a shortest path to functional wow! are some of the elements of the SaaS product that is self-serving and sold to remote customers. Three products were at the receiving end … er … learning end from Suresh Sambandam of KissFlow, Bharat, head of UX at Freshdesk, and Shekar Kirani of Accel. While Suresh focused on the sign-up aspects, Bharat gave feedback on design whereas Shekar pinpointed the market focus. Zipboard, Hummingbill and Canvas Flip were the three products that were reviewed on stage.

product etear down

This was easily the most popular segment of the day. There was laughter, there were learnings, there were moments of revelation, and on top of it, the three products wouldn’t have received such an honest feedback elsewhere. Shekar’s advice was worth a weight in gold especially for Zipboard and CanvasFlip. He was laser sharp in identifying the right customer segment and market and the entrepreneurs in the audience were overawed by his clarity.

The audience felt that Product Teardown deserves to be expanded in future editions of SaaSx. Peer feedback is valuable and helps to refine the product to make it efficient to acquire more customers.

The grand finale of the day was Girish making a fantastic presentation on his journey – from $1 million to $5 million. At each stage in the presentation, he called in the team members who worked on identifying a specific problem and explained what worked and what didn’t. What came through was the endeavour that propelled everyone at Freshdesk to work towards a common goal. What made these young guys work like men (and women) possessed is the specialty of the Freshdesk culture. Not much detail can be revealed, as we have to respect the fact that Freshdesk is a funded company. But what Girish said at cocktail was taut: “When I am on stage, if some guy thinks if he can do it, I can also do it, I am happy about it” It is suffice to say those who were at the hall were pumped with inspiration by Girish to think big and if you need that, you have to make it to SaaSx. See you there!

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Brace up all Product Entrepreneurs; InTech50 is back…

InTech50, iSPIRT ’s flagship event is back. The first two editions have been very successful and InTech50 has become the ‘must-go-to’ platform for enterprise CXO’s and product entrepreneurs. Over the past two years, we have hosted CXO’s and business leaders from global companies like AllState, Citibank, HCC Insurance, Standard Chartered, Colgate Palmolive, Time, AirTel, Yes Bank, Exide Life, Mother Diary and the likes. Here are some quick high points from the last two years of InTech50:

  • 18 enterprise deals that got originated and closed from conversations at InTech50
  • 42 enterprise PoC’s offered to InTech50 companies
  • 120+ innovation leaders (read: buyers & influencers) exposed to Indian product entrepreneurs

We have already managed to showcase over a 100 companies, and we have made 50 global investors and CIO’s travel to India to interact and associate with these companies, and happily so.

Here are a few portfolio companies from our past events – Capillary, Uniken, Seclore, Freshdesk, Reverie, Sapience, NowFloats, ToneTag to name a few.

Just to share the impact that we have created, and how these 50 companies have benefitted from this initiative, hear hear what some of them had to say –

“Intech50 is a phenomenal event. It is probably the highest RoI initiative we have ever participated in. With 50+ Global CIOs turning up, it is a great platform to validate your product. Met some of the largest enterprises, found use cases we weren’t aware of and closed marquee deals. Highly recommended!” Yamini Bhat, Vymo.in

“Intech50 was extremely useful in 3 ways. First, making a presentation of just 5 minutes to an extremely discerning audience helped us make our value proposition very crisp. Second, demoing our product to several heads of technology helped validate our product and use cases, and resulted in actual business deals getting signed. And most importantly, we were able to bag a large client with whom we’ve been able to co-create 2 completely new products. I wholeheartedly and highly recommend Intech50 to all B2B startups who have demonstrable products that are ready for large enterprises” – Ranjit Nair, Germin8

“Being a part of InTech50 2015 was a great opportunity for ToneTag. It was exhilarating when ToneTag was selected in the first batch as one of the top 10 products. The event gave us the exposure, guidance and support we needed. InTech50 enabled us to pitch our product to a global panel of curators and the media coverage we received was also been beneficiary to the company. Since winning InTech50, ToneTag has been expanding rapidly. We acquired many leads through the event that led us to PoC’s and commercial deals in the making. The resources we received through InTech50 have been invaluable as it has helped us build exciting partnerships with many in India and around the world” – Kumar Abhishek, ToneTag

If you are a product entrepreneur and your product is solving a problem for the enterprise CXO, InTech50 is your chance to showcase your product to the who’s who in the enterprise buyer community.

Apply before Feb 22nd 2016 and experience a bigger and better InTech50 in 2016.

To know more, click here.

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Will india make it – 2016? Big strides in software products

We need products, not services, to be global leaders, and the good news is Druva, Freshdesk, Capillary, Rategain, Savari and Julia are all either global leaders or the primary challengers in their respective categories.

For some months now, electronics has edged out gold, machinery and pearls to become India’s second-largest category of imports (after oil). Our aerospace and defence imports are also growing. We love buying all kinds of gizmos, big and small, from the West. Because of this, aerospace, defence and electronics imports are ticking time-bombs. Electronics alone will become double our oil imports in five years. The big policy question is whether we can develop viable domestic product companies in these sectors without resorting to protectionism. The short answer is: Yes!

The reason for this optimism is software products. In this area, we are holding our own. India’s software product industry is growing at a healthy clip. iSPIRT’s iSPIX (Indian Software Product Industry Index) grew by 26.6% on an annualised basis in 2015. And 80% of this growth has come from companies focussed on global markets. This is fuelled by companies like Druva, Freshdesk, Capillary and Rategain. Each one of them is either a global leader or the primary challenger in its respective category. There is also a long list of promising companies who are replicating the success in newer categories. Team Indus is attacking aerospace. Forus Health is changing preventative blindness testing across the world. Julia, an open-source language out of Bangalore and MIT, is reshaping how IOT will happen. Savari is already a top-3 player worldwide in self-driving cars. All these are new names for most people. In the glare of the Bollywood-ish publicity of our e-commerce companies, we are missing the real revolution.

Yes, like any nascent revolution, this is fragile. In fact, we recently dodged a bullet. In the run-up to prime minister Narendra Modi’s recent US trip, the Indian Patent Office hurriedly issued guidelines on computer-related inventions. Undoubtedly, they were made under pressure from some American MNCs, without realising that they were a death knell for the domestic software product industry. Luckily, good sense prevailed and 115 days later, on December 14, these guidelines were rescinded.

This near-death experience has had a positive fallout. It precipitated a coming together of minds within the government on having a proper policy for software products. As a result, a National Policy for Software Products is on the cards and should be out in a couple of months. It represents a new paradigm of policy making. For starters, it has no sops! Instead, it takes an integrative view of changes that are needed to create an enabling environment. It eliminates FERA-era norms that prevent Indian product companies from going global. It introduces missing concepts in our policy lexicon. For instance, our tax code doesn’t even have a definition for digital goods, and this, as you can imagine, results in misery for software product companies. It also tackles our archaic R&D credit system that harks back to the pre-liberalisation era and favours only large profitable companies. It is a bold policy effort that eschews tax-breaks, big budget outlays and protectionism for creating a modern policy environment for our software product companies.

Indian software products matter. This sector is the opening batsman for a new innings for India. If it runs up a good score, as it is likely it will, it will set the stage for aerospace,defence and electronics products. If India remains bereft of SPADE (i.e. Software Products, Aerospace, Defence and Electronics) product companies, it won’t be a sustainable economy in the future. Keep in mind that Microsoft generates more profit than the profits of the top-20 pure-play global IT services firms. Boeing and Airbus alone generate almost as much profit as all global airlines put together. Cisco’s profits are more than those of all European mobile operators. And Pfizer’s profits, even before its recent acquisition of Allergen, are more than the profits of top 100 hospitals in US. The value nowadays lies in products, not services.

We know how to build the world’s best hospital, airline or IT services company. But no matter how well-run Indigo Airlines is, it will not become a Embraer or Boeing. Similarly, a Narayana Hrudayalaya hospital will never bring a drug to market like a Pfizer does. Airtel or Verizon will never build a router like Cisco and Juniper do. And TCS will never be a Microsoft. Acknowledging this plain reality is the first step that we must take. Building a world-class product company needs a different mindset. You have to go all-in and bet-the-company on a market or technology shift that is underway. This mindset is new to us in India. We must nurture it so that it becomes a new strength for the country.

The stakes are high, but there is reason to be optimistic. A few smart and light-touch policy moves (in the works) can make India a global software products powerhouse. It is the first step to becoming a product-nation!

By Sharad Sharma  and Vishnu Dusad, MD, Nucleus Software

 

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SaaS is the new black – and it has found a place in Chennai

At SaaSx 2015, Girish Mathrubhootham, CEO of cloud-based customer support software Freshdesk and popularly known as the Rajnikanth (think an acting, singing James Bond) of India’s Software as a Service (SaaS) scene, did the unthinkable. He revealed the entire spreadsheet of internal data-based metrics that he presented to his investors in 2011. All the media people were asked to put away their weapons and, at first, I was a little disappointed that I wouldn’t be able to share any of those numbers. Soon, however, I realized that they weren’t even important.

After Girish’s investors took a look at his numbers – and, honestly, at the time, they were not all that impressive – they decided to email his clients with a feedback survey. The response was overwhelmingly positive, with 96 percent of Freshdesk’s customers expressing approval of the product. “We didn’t even expect that,” explains Girish. “The only other feedback we got was customers expressing their desire to see us expand our product into different areas.”

The fact that customers wanted to see Freshdesk expand was important for both the company and its investors. As its progress revealed, the most dynamic feature of a SaaS product is its ability to acquire and reacquire the same customers by offering insightful new features. And, while the transient nature of software products means that differentiation can be difficult to maintain, Girish went on to explain that capturing the market was all about moving in at the right time. “Of course, best practices are easily copied and hard to retain – that’s why I’m only revealing our numbers from 2011-2012,” he joked.

SaaSx 2015, held in Chennai, Tamil Nadu, the self-proclaimed SaaS capital of India, was full of similar insights. People visited from all over the country, the furthest having traveled over 800 miles from Ahmedabad. Those in India’s startup capital, Bangalore – this includes yours truly – traveled over 6 hours and 300 miles on a bus through the winding Western Ghats to reach its neighboring state of Tamil Nadu. Despite an early start, energy was high on the road to the conference – the 34 entrepreneurs on the Microsoft Ventures-organized bus managed to conduct an ice-breaking session without falling over during the turbulent bus ride.

“My biggest virtue as an entrepreneur was patience. And, my biggest mistake… it was probably patience,” quipped one young CEO.

Read more about the SaaS Leap of Faith, SaaS circles are all about community, a blog post contributed by Meghna Rao from TechInAsia

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Are you in India/SaaS, and not at #SaaSx2? You missed transparent mind-blowing insights

SaaSx event is a meetup organized by a bunch of SaaS entrepreneurs for all SaaS entrepreneurs in India. SaaSx Chennai event enables SaaS start-up founders to learn and share tribal knowledge from SaaS (software-as-a-service) start-ups in various stages of the evolutionary ladder.  Every participant registered for the event and was vetted for fitness with theme of the event. (Do events really have qualifying criteria for participants beyond collecting money?)

A good number of us going from Bangalore to Chennai climbed SaaSy bus early in the morning. For everyone who climbed the bus, our learning started in SaSSy bus from Bangalore to Chennai. Entrepreneurs got comfortable with each other quickly and most seem to be in the mind-set described by Yamini “Running a company becomes a lonely job after a point. Super excited to meet other co-founders”.

After crossing to Tamil Nadu, we had breakfast and climbed back to bus. This followed with ice-breaker session where everyone self-introduced themselves and shared 2 things that worked for them and 2 things that did not work for them. Sharing brought the journey to end in Chennai. Some attended private roundtables, followed by lunch, SaaSX2 event started. FireSide Chat was kick-started with Aneesh Reddy of Capillary Technologies on ““The Nuances of Enterprise SaaS” by Ahi and Asha Satapathy.

  • Lonely initial start-up days when it was not cool to work on start-ups. That was okay and they got time to work focused.
  • Shared their approach to balance developing a product and customization needs of customers, how they make decision whether to do customization or not and when to actually execute customization.
  • Shared the challenge to collect money from customers after delivering service and the approach they took to streamline the same. For delays with large enterprise customers, one needs to evaluate whether it makes sense to follow with customer for smaller payments.
  • Shared being lucky not to take hard calls of firing people in India. He thinks firing makes it very difficult to hire senior people at some point of time.

Asha made Aneesh to share personal life tips by asking his advice to young entrepreneur’s to find life partner, which Aneesh coolly as “If you are entrepreneur or plan to be one, marry daughter of business man. She would be able to relate to you as she is already used to relate to her father”. The Next FireSide Chat was started by Sumanth Raghavendra with the man who has mapped SaaS growth from seed funding to Series B and beyond. Yes, Girish Mathrubootham. Earlier he welcomed us sharing his inspiration from thalaivar (leader) Rajinikanth, Tamil film actor. For me, Girish story is very similar to Rajinikanth movies, film world made real in software world.

Girish set context of his learnings and insights might contradict with Aneesh by sharing the difference between order ticket sizes in their individual business. Some of insights shared were

  • Focus should not be just about features in product, but any user must get value in 20 minutes without help from anyone.
  • B2B SaaS is never a winner takes it all market. There will always be a set of 2 to 3 credible players.
  • Decision to spend $40K money earned through Microsoft Hackathon to explore different marketing channels and evaluate their effectiveness. Required courage to spend on marketing against conventional wisdom of boot-strapped start-up booking the money for other purposes.
  • When customer land on the website, product experience starts right at that moment. The customer needs to like what he sees and when he signs, he needs to get value out of the website. If customer ends up saying atleast a vow, there is more probability that the customer might spend time in the next 30 days evaluating your products.

In between sessions, I loved the concepts of #onething at conference where entrepreneurs are asked to share one thing as response to a quick round of questions. Here are few fresh in my mind.

      • #onething “Simplify and communicate “helped team to scale was awesome #communication among team members. The context was the presence of start-up team across multiple geographies.
      • #onething “Should we change focus from Minimal-Viable-Product (MVP) to Billable-Viable-Product(BVP) ?” No money flowing is opinion but cash on table is fact. The Value of BVP: After 30 days of trial, will we get revenue on day 31?
      • Today internet earnings are migrating from advertising to commerce. With more commerce happening, product information is core to the future of brands and market.
      • Choice of Cloud in 2008 enabled us to establish India ecosystem for health management /diagnostics technology products and created a whole new SMB market of SaaS offerings.

Dorai moderated Unconference session. The session started with narrowing down to 3 topics based on audience preference of topics. It just happened that first topic “Inside Sales for SaaS products” took most of the time. It was nice to see exchange of folks with challenges asking questions and folks who cracked challenges sharing their insights. It was nice to see Suresh and Girish stepping up to share their inputs for most of the questions. May be this is exactly how real knowledge sharing should happen.

iSPIRT continues its focus to encourage learning and sharing among entrepreneurs as support for their journeys and here is second event in 2015 to demonstrate their commitment. Here are my thoughts after the event

  • Each questions of entrepreneur’s comes from real world challenges. The answers are not in text book and the answers have to come from real world experiences and are not available in textbooks or class rooms.
  • Learning from SaaS start-ups is tight connected with the context where SaaS start-up operates. Without context of the start-up, insights are of little or no help to entrepreneurs, as learning of SaaS start-up in first context contradicts with the learning of SaaS start-up in second context.
  • No one tried to create good impression. All were open to share their mistakes and what they learnt in the rough way. Indirectly saying that “Failure is first step towards success”.

Here are #bigMistake heard from Bangalore entrepreneurs in #SaaSyBus

  • Sold to friends & thought we were good, product ended up weak. Should’ve sold to toughest customers 1st to make prod strong
  • Hired for start-up experience and skills. Should have hired for attitude and culture fit.
  • Build the product along with sales. First few paying large customer got pissed off and jumped away.
  • Following templates for success does not work. Need to find your own path and your own means to succeed.
  • Took a lot of money from investors and became complacent. Will bootstrap next time.
  • Build a product for a market that was 2small. Now moved to a bigger market and trying hard.
  • Corporate experiences and start-up life are poled apart. Do not worry about other, competitors.
  • Being too passionate when things get hot. Need to step back and take a hard dispassionate look and face reality.
  • Trying to hardsell. Now we just do demos, show the value, if they see the value they will buy.
  • Selling operational cost efficiencies in a fast market does not work.
  • Customer say wants, not need. Product roadmap cannot be based on customer inputs, must come from deep within.
  • Delaying product launch to polish it. Need to launch fast and get market feedback and face reality.

Guest Post by G. Srinivasan

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Freshdesk’s Customer Happiness Tour : Gurgaon – Redefining the Customer Service Experience

In the last few years, a lot of things have changed about the way we do business. For one thing, customer happiness is no longer an accessory to companies. It has become the matter of the hour influencing every aspect of a business, from the way we build the product to the way we support customers. Brands are finding it increasingly important to go the “extra mile” with their customer experience in order to stay relevant. And those that are winning aren’t playing it safe.

The Customer Happiness Tour, a one-of-a-kind event, is an effort to bring together like-minded customer service professionals to discuss strategy, share stories, tips and tricks, and effectively crack the “code” to customer happiness. Fueled by insights drawn from the experience and challenge of being a customer-centric brand, these discussions range over a varied number of topics, covering the entire spectrum of the customer experience. We’ve travelled the world with it, from San Francisco to Sao Paulo and Paris to Amsterdam, and we couldn’t be more excited to bring it to India!

Why CHT:Gurgaon?

The Gurgaon edition will bring together India’s biggest customer-centric brands to talk about why customer service is important in running a business. With a fantastic line up of speakers from Amazon, Flipkart, Urban Ladder, Hike and Myntra, the event will serve as a unique first-hand point of view into the stories of businesses that are rewriting the customer service experience in India.

CHT Gurgaon BannerIf you are a leader or a part of an organization who puts a premium on customer experience, this event is for you. Don’t miss out on this great opportunity to meet, talk, network and trade notes with leaders from India’s biggest brands and hottest startups including Zomato, Yatra, CaratLane, PolicyBazaar and the Oberoi Group of Hotels.

How can you be a part of this event ?

CHT:Gurgaon will be hosted at the Leela Ambience on October 9th from 11:00 AM to 6:00 PM. Register for the event here with the discount code CHT25G to avail a special deal exclusive to iSPIRT community

 

 

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India B2B Software Products Industry Clocks Solid Growth from 2014 to 2015

India’s B2B software product industry has grown nicely since we published the first edition of this index in November 2014 – the top 30 companies are valued at $10.25 billion (₹65,500 crores) and employ over 21,000 people.  The index has grown 20% in USD terms and 28% in INR terms from October 30, 2014 to June 30, 2015.

There has been an acceleration since 2010 in the pace of creation of B2B companies.  Vertically-focused offerings in retail, travel, financial services, media have reached scale and we are likely to see some larger exits in terms of IPOs or M&A over the next couple of years. In parallel, we are seeing horizontal offerings targeting global markets emerge and start to breakout of India into the US and other global markets – we are starting to see not only India-based venture funds backing these companies but also Silicon Valley funds coming in once there is initial customer adoption in the US.

A new set of founders are coming into the B2B software products ecosystem. These include an increasing proportion who have worked at consumer and B2B startups that have scaled in India and who have identified problems that they can solve with software automation.  We are also seeing continued venture creation from founding teams that have backgrounds from established enterprise software companies and some from IT services companies.

In terms of target markets, fast-growth Indian companies (in sectors such as organized retail, organized healthcare services and technology startups in product commerce and services commerce i.e. online-to-offline) are starting to purchase software from Indian B2B software product startups and have globally-aligned requirements, helping these startups get closer to product-market fit before or in parallel to starting to sell globally. We are also seeing many startups go global from day-one through a desk-selling model, as evidenced by many of the companies in the index. And finally, several startups have moved founders to the US and are succeeding in direct selling models there.

Some of the numbers: 80% of companies have global customer bases, while the rest are India-focused.  67% of companies are domiciled in India, with the rest principally in Singapore and the US.  Bangalore and NCR account for half the companies’ principal city of operations with Chennai and Pune as key secondary hubs – there is a trend to newer companies starting up in Bangalore, Chennai and Pune and away from NCR.  Average enterprise value per employee is climbing toward Silicon Valley levels – the index currently nets out to $480k per employee.

The top 30 companies in alphabetical order are:

Here’s the report in its entirety:

Thanks to all the volunteers at iSPIRT who worked on this project as well as Professor Sharique Hasan of Stanford Graduate School of Business, Stanford University; Professor Rishi Krishnan of IIM-Indore; as well as Signal Hill for providing public market valuation comparables and Rakesh Mondal  for designing the document..

We will publish an updated iSPIxB2B index every year starting with the next one in June 2016 – please do click here to submit names of companies you think should make this list.

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Happy Independence Day from iSPIRT #IndiaCanInnovate #PNGrowth

It’s Independence Day today, and the last year has been one of the most exciting years in India’s product ecosystem. Just last week, the news that Sundar Pichai has taken over as the CEO of Google has been another shot in the arm for Indian techies. If ever it was the time for Indian product companies to raise the battle cry to take on the world, it is now.

Screen Shot 2015-08-14 at 6.15.42 pmIn conversations with other people in the ecosystem over the last month, there has been a realisation about the need to create what we call category leaders in the product space.

In India right now, we do not have #1 in any large category. Freshdesk (#2 in category), VWO (#2 in category), FusionCharts (#2 in category), are all virtual market leaders but these are our own unicorns.

And this in turn begs the question – do we take a route of supporting only large leaders, or multiple contenders, at which we already have the above companies killing it?

In this discussion, overwhelming support was for more number of companies; we simply need more entrepreneurs, and MORE IMPORTANTLY more product people.

These new companies we want to see don’t need to become category leaders, but category winners. And this would mean a whole new approach to building a company.

We have reimagine our team/culture, process and product to have a shot at being a category winner.

For team/culture, we need a hiring model that is tied to results from the beginning. Hiring great, not just good, talent in the early days requires hunting people down across the world, and creating a culture that scales.

For process, it starts with eschewing chewing-gum culture and thinking about solving all problems with technology in the way that allows Uber to operate with higher customer satisfaction despite having a fraction of the employees that other companies have.

Metaphorically, it is about having German Product Management, American Marketing and Russian Programmers.

For product, it comes to recreating the category, and sometimes creating a new one. And it’s also definitely about scientific and yet disruptive pricing.

Why all this on a national holiday, you might think? When else, then? Today, when we are watching the Independence Day parade in New Delhi, some of us weight think as to what significance our careers have over, say perhaps an Army jaw an who guards our borders? Isn’t his the more important job for the nation?

It certainly is, but we mustn’t forget that in our own way, our work is also aimed at making a stronger country. When we start building world class products the world uses, we are raising the bar for achievement as well. Our may not be to do and die, but maybe our role, in this quest to build India as a Product Nation, is simply to inspire the next generation.

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The Startup PR Checklist – What to do before a big launch

Copy of branches&creaturesFor early stage startups, cash-strapped and overworked, there are few things more valuable than PR. There is nothing more important at that stage than getting the word out there and getting users on board, for which PR is the only real shortcut available. And when there is an important feature release or a launch or a funding announcement and so on, all of which can be leveraged to get your startup up into the fickle spotlight, you need to be on your best game.

Here’s a small PR checklist that can be used as a starting point for campaigns. Based on a plan I’d made for a company I consult for, it can be used for different domains with appropriate tweaks.

Press Release

Write the draft yourself. Don’t let your PR agency write it. Remember that most wires will just pick up your release and distribute it. Writing the release itself let you control the small nuances that would make an impression on a reader. No PR person, as good a writer as they may be, will know exactly what you want to say or be able to communicate what you know. Ask them to review and edit it later, of course. But when your positioning needs to be clearly articulated, no one can do it better than you.

Tip – Read the PRs which made an impression on you. See what caught your attention. Replicate.

Reach-out mailers

About three weeks before your release date, prepare a small outbound list of tech journalists, podcasters and bloggers, and start reaching out to them with the story you want them to tell. The best case scenario would be that you have built up a relationship with the journalists and bloggers over some time, and are now in a position to leverage it. If not, this is as good a time to start as any. Try to tell them a story, give them a ‘hook’ to write about and ask them if they’d be interested to write about you. Most will not, a few will, but maybe next time, when there’s an even bigger launch, they will. And what coverage you get now for the story will be a bonus.

Tip – Have a list of journalists you consider important on your table. Mail them at intervals, give them tips, ask their opinions on vital debates. Be useful and interesting to them, basically. They’ll be more receptive when you reach out to them later.

Homepage

Connect the Press Release’s story with the homepage. In effect, make the homepage the landing page for that day, so there’s a smooth experience for the reader who’s coming in from reading the release. If they say different things, you may lose his/her attention. But when what is said on the release connects snugly with the homepage, there is a higher probability for the reader to spend time on the site. You can check how many readers actually followed this process, read pages or clicked on CTAs to know how this worked, so you can tweak it on future releases.

Blog

Write at least two tangential/related stories about the release on your blog, preferably personal stories of how the team built this, or how it impacted a specific customer and so on. This way, readers who arrive on the site through this story have additional reading material to spend their time on. Though this isn’t spoken about more often, the blog is often a measure of organisational credibility. For example, I sent a senior manager at Freshdesk a link to a young product that could have been useful in sales processes. The first thing he told me was that since the company did not seem to write anything on their blog, he didn’t have anything to judge them on. The product seemed okay enough, but he didn’t know if he could trust them. This is something product marketers should take not of.

Tip – An article or two on Medium would also help. Medium, being the heavily tech-oriented community that it is, can sometimes get your story noticed more. Again, all of this is possible only if there’s a good story people actually want to read. None of this is useful otherwise.

Case Studies

At least one case study should be there on the home page, where the customer has used the new feature you are releasing. A good case study can be fantastic collateral for a feature release or a product launch; readers who arrive from the news will know immediately that what has been told to them and interest in which has led them here, is already out there being used. This again raises the probability of them clicking on CTAs or getting on mailers or even buying the product itself.

And so on and so forth. There are a lot of these things startups can do on the contextual level that will make the arriving reader spend more time on the page and convert. For the startup with limited money and marketing budget, which needs to ensure that not a single reader who arrives trickles away into the ether, these tricks of the inbound trade are definite aces-up-sleeves.

If there are other things that you have done, or which I have forgotten about early in the morning as I write this, please add them in the comments.

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49 Not Out ! Excerpts from Product Nation’s 49th Round Table on selling SaaS products to US customers

Pune… the city of life. It’s a place you can easily fall in love with. Fun loving yet grounded folks who talk sense. Light drizzle, clean roads and a young city full of aspiring students who want to change the world. So when Product Nation announced it Playtable in Pune I latched on to the opportunity. Avinash and his iSPIRT team have been doing some wonderful work over the years in leading the way for SaaS startups. The topic itself was close to my heart ” Nuts and bolts of selling to US market for B2B SaaS companies” and when you have the ‘Google of B2B SaaS marketing’ Suresh Sambandam conducting it, you don’t want to let it go. Google coz if you have a query he has the right answer. Over the years Suresh has done some real hardwork in taking Kissflow to 10000+ customers and he has fixed all those nuances of SaaS selling by getting into depth of it.

SalesSo on a pleasant Saturday morning , 30th May to be precise, we a bunch of 15 entrepreneurs and few aspiring ones gathered to know how to make it BIG by earning in dollars. United States is by far the biggest market for SaaS companies and if you get it right there you will make it BIG one day.

We started with basic introductions and brief product details. It’s really heartening to see how enterprising the current generation is. We guys today are proud to be entrepreneurs or employees of startups. It shows you can take risks, think outside the box and are not satisfied with status quo. I can surely see that the next gen of aspiring entrepreneurs will come from those who work with startups. And why not. If you can make a startup successful, you surely can build one for yourself.

Our workshop focused on B2B SaaS startups. How can you sell your B2B product to US customers sitting out of India? Yes, selling to them without even meeting them.

B2B selling has traditionally been about relationships, face to face meetings, getting to know your customers, value selling and all. But, cloud computing has totally disrupted the market. In fact it has expanded the IT  market globally. Today millions of SMB and mid market clients can  afford to automate their marketing, sales, operations etc using cloud solutions on SaaS model. And if your product can add value to their business they care a damn as to where you are based. I think we should thank the first generation B2B SaaS Startups like Zoho, Freshdesk, Kissflow, Druva etc who have built the trust and confidence in US customers that world class solutions can be delivered from India. We the 2nd generation now need to ensure that put our best foot forward in terms of quality of product and support when we reach out to them.

The views I’m sharing are a glimpse of insights given by Suresh and interactions during the round table . In between you’ll see important tips from suresh which I’m calling it KiSSTiP 🙂

To understand the process best we looked at it in a logical flow.

  • The Product
  • Market fitment
  • Pricing
  • Marketing
  • Sales
  • Customer success

The Product first – In SaaS marketing you need to have a good working product. Unlike face to face selling where you can do with ppt selling and bit of account mapping, SaaS needs the working product first. In fact you can use your product as a marketing tool building in features to engage, upsell and cross sell.  The important point is how do you position your product amongst three below :

  • Category Creator
  • Novel Approach to an existing well understood category
  • Low cost alternative

SaaSThe group agreed that a combination of 2 and 3 would be ideal to reach the right set of customers. Being a category creator – someone who creates a new market needs a lot of investment and F2F interaction. But low cost should not be confused with cheap. We need to build solutions with world class quality at minimal cost thereby passing the benefits to the customers. That creates high value product for them.

Next comes the market definition. Suresh shared the segmentation based on number of employees into SOHO(1-10), VSMB(10-50),SMB(50-500),mid market (500-5000) and enterprise (5000+). The sweet spot for SaaS marketing lies in the SMB and mid market space. In terms of who decides on buying your product, in SMB whosoever may be evaluating, the founder or owner will somewhere get involved before the purchase. As we move towards mid market and then enterprise customers, the line of business (LOB) guys have a larger influence apart from IT team who might get involved. Also which geography to target and what languages to support. US and English are big enough to start and one should look at other countries probably in growth phase.

KiSSTiP ! 

SaaS startups should focus on ONE Country, ONE  language first to ensure they remain focused.

Now that you know what your product market fit, how do you reach out to the US clients and get them to buy your product ? The process of customer acquisition was simplified by Suresh in four steps

  • Marketing
  • Product engagement
  • Sales
  • Customer success

While the nitty gritty may vary by the type of solution, the role of marketing is to get people to sign up for a trial or free account. Unlike B2C , in B2B the customer has to see the product demo. This is where the product team steps in to ensure the solution and get the customer engaged and use your product during trial period. If the customer is not using your product during trial, he probably won’t buy it. Once the product team ensures a good product experience, the sales team steps in to ensure conversion. Sales team can dived into ‘hunters’ – ones who get the customers and ‘farmers’ ones who nurture the relationship to upsell and cross sell. The customer success team ensures that the customers realise value from your solution. The metrics and handover points for each team needs to be meticulously set and communicated.

KiSSTiP ! 

The support queries from customers during early days of engagement should come to sales team and not support team as it is an opportunity for you to grow the relationship. But seller should get the issue fixed first and then engage further.

TwitterWe discussed the marketing process in detail including SEO and Adwords,  social media, content marketing, blogging. The importance of google and the traffic it generates is immense so SEO and Adwords are an important piece but the two need different specialised roles. The role of marketing is to get enough leads digitally. These can be through organic search- Google, Yahoo, Bing etc). While google still dominates the majority of the US market, those targeting elderly citizens might want to reach out via Bing as they still have a lot of elderly crowd there. SEO requires identifying your keywords as per the target geography and product. It needs meticulous tracking of keyword ranking every 2 weeks. Fact is if you are not on FIRST page of google, its not worth.

Till you get enough of organic crowd in, AdWords can fill in. Adwords is all about number crunching and reaching to an optimum cost per lead. Ashish and his Sokrati team shared their insights on managing adwords as that’s their area of specialisation and promised to conduct a detailed session later some time. Suresh shared insights into digital ROI metrics for AdWords. On an average you can get a signup for $10-$25 for search ads and $2-$10 for display ads. However the conversion seems better for search ads as these are real customers searching for specific requirements whereas in display ads are shown on sites which might have these customers as one of their target audience.

We discussed social media marketing – LinkedIn and Twitter and content marketing (blogging, case study creation etc) in detail. The group shared its experiences on getting leads from Quora and forum discussions. The internet now days is getting really crowded so you need to figure out which group is giving you the returns rather than spraying your messages across all over. Content marketing can be a differentiator in this crowded digital world- the quality not the quantity matters there. Suresh shared how his team publish two customer experience blogs every week where they share live feedbacks from actual customers. Retargeting helps you bring the same vistors back to your site and improve the ROI on your existing marketing spends. While content creation is important, content publishing is as much an important task. We discussed tools like Outbrain and Taboola for content distribution. Talking of tools, the groups discussed a host of SaaS tools that can be used by startups to more efficient like Pipedrive, ChargeBee, Intercom, Mixpanel, Google Analytics etc.

KiSSTiP ! 

Suresh shared his 10-80-10 principle for creating quality content. If total expected time for writing a piece of content is 100, spend 10 on briefing the content writer in the beginning, let them write for next 80- spend 10 on final review. The fact is the best content writers wont be able to understand your solution and market to the extent you do. So a 10 % briefing time can save them a lot effort and set them in the right direction.

We discussed the important aspect of pricing which also brought us to the discussion on Freemium Vs Free Trial. Majority of the group went in favour of Free trial over Freemium as they felt that the customers didn’t see value in fremium. While there is no thumb rule for this, solutions where SaaS products can get self signup can still look at Freemium to upgrade them later. On pricing, different team members shared their views on their basis of pricing. Some did it bottoms up on cost plus model where as others looked at the competitive pricing.

Pricing is an important aspect so ensure you keep taking feedback from your early customers and incorporate that feedback.

Finally, the most important aspect of execution is measuring the key metrics. As your team grows you need to push a dashboard of metrics which alert you on any activites that are going offtrack or to scale up things. Conversion Ratio, Conversion through Paid vs Organic, Organic Traffic by Source, Signup Trend Paid vs Organic vs Source,Paid traffic by Source, CPS for Paid and Overall, A-ARPA trend 12 months, etc are some of the important metrics.

All in all, I must say, it was one the most informative and engaging workshops I ever attended. It was a crash of 2 years of learning compiled into a 8 hour workshop. What if we were to pay for this workshop ? How much would we be willing to pay? Marketing strategy workshop $300, Leadership training $1000

Product Nation RT on Selling SaaS product to US – Priceless !

Kudos to Avinash for oranising, Sokrati team for being a great host and Suresh for conducting the round table. At 49 not out, half century is round the corner for Product Nation round tables and I’m sure in for a long innings. As long as they bat with us, we are sure to win in the end !