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Making your sales engine succeed in North America

Like many other technology entrepreneurs in India, I am the founder CEO of a software product company. We make a Global Human Resources SaaS product EmpXtrack and have over 300 customers in 20+ countries.

Many of us face challenges to scale up our US Sales and explore options such as relocating to the US, hiring a US based sales team, offering free trials, converting the product to a freemium model, an inside sales approach etc.

We recently faced this dilemma too. To find answers, I requested introductions to a number of successful software product entrepreneurs who were selling in the US market. Wanted to understand what they were doing differently such that we could replicate that. My discussions with them are documented here and hopefully it will help you in your product journey too.

Does direct sales work?

This largely depends on the ticket size.

Since our deals are roughly in the $8-$12K range per year, here is the maths behind this:

  • Cost of a local sales person: $150K (including commissions)
  • Cost of travel: $50 – $100K
  • So for a single person team, you spend approximately $200-250K per year.
  • No of deals required for break-even (@$10K / deal): 20 – 25 or 2 per month.
  • No of deals required if your sales cost is 25% of the total revenue: 100 or 8.5 per month.

Conclusions

  • It is virtually impossible for a single sales person to close about 8 deals per month
  • The direct sales model can only succeed if you have much higher ticket size ($100K or so)

If not direct sales, what else?

For smaller deals, inside sales (selling by phone) is the only approach. The following is required to make this succeed

  • A strong lead generation capability
  • A strong qualification capability
  • A strong closing capability where the sales team can close deals on the phone.
  • A knowledgeable support team that can assist the customer during implementation.

If you have all of these, there is no looking back! If not, refer to the next question.

What are CEO/founders responsibilities?

Everyone who I spoke to said that the key responsibility of the founder was to build teams that could address each of the points above.  “At a startup stage, you are perhaps the only one who has indepth knowledge of your product, how you want to target and acquire customers, how much you can discount, what extra features can be added, how much to deviate for an implementation and so on”. Hence, you need to be intimately involved in every facet of the sale.

Some interesting thoughts I heard were

  • You need to be involved in every conversation, communication and implementation till you reach a certain scale (aka a few million dollars of revenue). You will discover how many things were going wrong once you do that.
  • You need to talk to customers. “I still talk to important customers and was the first person in my company doing that”, was shared by 2 entrepreneurs.
  • You need to write marketing collateral, give demonstrations, build proposals, negotiate, close, provide support and do all customer facing activities to understand the challenges being faced by your teams.
  • You constantly need to mentor your team members and provide them feedback. They need it. While you may have rockstars, it is very unlikely that there may be a huge number of them.

So for all of you entrepreneurs, focus on customer facing roles and continuously mentor (and monitor) your teams! This is your only job.

How to do lead generation?

  • The best and cheapest leads are inbound. Create great content and use SEO aggressively to attract potential customers. This takes time and should be a part of your product development cycle and never to late to start if you are not doing it already.
  • Use PPC, paid directories etc. to generate more leads.
  • At a certain point, the cost of acquiring the next lead (through SEO and PPC) may yield negative returns. Around this point invest in a cold calling team.

What kind of people are required?

  • Key trait: Aggressive selling capability with very strong communication skills. Should be focused on closing. Hunters!
  • Pre-sales team: That can qualify, provide customized demos, research contacts, create great proposals and solutions. These can be added when you are sales teams are reaching their limits.
  • Qualifications: MBAs not required for sales and may not work out. IIMs/IITs not affordable! Graduates with a hunger to succeed are a must. Available in plenty from BPOs and other IT Services firms.
  • Experience: To start, 2 mid-level hires with background in US sales (with 5 – 8 years of experience) and build teams of freshers below them as the next layer. Mentor everyone continuously.
  • Approach: Each team should compete with the other

What kind of changes are needed in the organization?

While you may be a company in India you have to operate in the US time zone – both physically and mentally. This includes not only the sales team but also the executive management (Founders included), the pre-sales team and the support teams.

The R&D and implementation teams may still work in the day-hours but they will have to follow a rotational shift model of working at least 1 week per month in the US time zone.

Do I need to raise money?

Completely your choice! While two entrepreneurs that I talked to raised VC funding at an early stage, three did not. Once your product is developed, it takes very little to sustain new release cycles. Implementation teams should pay for themselves.

Since your sales team is based in India and you are generating leads efficiently, you can control spends and be very efficient to maintain a positive cash flow. So you can bootstrap to success.

We have sustained ourselves for 7+ years, have positive cash flows, are growing on a YOY basis, are profitable, own our own premises and have over 75 FTEs and have done it by bootstrapping.

Can we succeed by selling in India first and then going to US

Unanimous view: Unlikely for a B-B product!

India is a very cost conscious market where decision making is long and value for technology is low. Assuming you are replacing a head with your product, at best the value for the same in India will be between Rs 3-7 lacs. Compare this to about $60K cost anywhere else in the world and there is a much higher value for your product.

I know this is controversial, debatable yet unfortunately true!

Do I need a great product

Yes you do! Especially if you want to sell in the US market. The market is big but very competitive. ‘Great’ can have many different interpretations such as value proposition (read price), capability to customize, integration with other platforms and so on.

Whatever your edge may be, you need to repeatedly send across the message in all your communication, aggressively work on sales and you will find customers.

Does this model apply in other regions and geographies

Mixed thoughts. Some people are doing a good job in APAC and are getting their feet wet in ME but I could not identify a pattern. Some things unique to the US

  • US is very-very big. Small ticket buyers understand that their vendors cannot travel for small deals. Hence the purchasing is geared towards non F-F channels.
  • US firms are more experimentative and willing to bet on startups.
  • The country has consistent rules with a common language.
  • Value for automation is high.
  • US has a positive feel about Indian technology and India in general.

So let us all work hard to make India as a Product Nation. Please share your thoughts.

I am grateful to Aneesh Reddy, Suresh Sambandam, Ketan Kapoor amongst many others for their helpful insights and sharing their experiences and to Avinash Raghava for his introduction to all the great entrepreneurs.

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14 Ways to Emotionally Engage users with your Product

Most conversations with entrepreneurs and product managers who want drive engagement and bring viral features to their products are answered as ‘We will gamify our product through features’. This post is about clearing some nuisance around the topic of gamification in products.

Gamification has nothing to do with building features. In fact, even Product Management has nothing to do with building features. It is not a rocket science, product managers usually figure out the ‘building features’ part of it with time and experience.

“People don’t buy products. They buy better versions of Themselves.”

So how do you ‘connect’ users with your product? Not through features, not through gamification, but by triggering certain emotions with your users.

Gamification = Getting People Emotionally Engaged with Product.

Below are some of the most powerful emotions people have along with few examples that will help you figure out how get users to emotionally engaged with your product / startup.
PS: The number of emotions could be more, I have referred to only 14 here.

1. Expression

Expression – People love to express themselves. Enable it.

Products that allow users to express themselves:

  1. Tumblr
  2. Twitter
  3. Facebook
  4. Medium

Products that allow users to express themselves anonymously:

  1. Secret
  2. Whisper
  3. FML

Tip: ‘Expression’ is used as a core use-case in product.

2. Acknowledgment

Acknowledgment: People love getting acknowledged. With interactions & endorsements.

Help people getting acknowledged. They love it!

  1. LinkedIn – Recommendations & Endorsements are social acknowledgments which users love.
  2. Twitter – Retweets and Replies on tweets are great way to be acknowledged.
  3. Facebook – Likes & Comments are acknowledgments to status messages users shares
  4. Quora – Upvotes & Comments is acknowledgment to your answers.
  5. Tumblr – Love & Reposts are acknowledgments to you posts.

Tip: ‘Acknowledgments’ lead to ‘User Notifications’ which further lead to Engagement. Always build features that enable acknowledgments in products that use ‘expression’ as use-case in product.

3. Exclusivity

Exclusivity or Privilege: People love being privileged. Make it exclusive.

Make it exclusive. No one likes the feeling of being left out.

  1. Gmail – Gmail invites were exclusive to few users. People were ready to buy invites off Ebay.
  2. Quora – Only existing users can invite new users.
  3. Pinterest – Users need to apply for access. After few days they were granted it.
  4. Mailbox – Users were in queue to get access to the app.

Tip: ‘Exclusivity’ works best for initial referral program for driving sign-ups.

4. Being Cool

Being Cool: People want to be Cool. People want others to know they are Cool.

Make your users look cool when they share your product.

  1. Frontback – Share a snap along with a selfie. Lets users be cool.
  2. Vine – Short cool creative videos.

Tip: ‘Being Cool’ will help you drive sharing on Social Networks.

5. Nostalgia

Nostalgia: People have memories. Sweet Memories. Remind them about it.

Remind users about some of the best times they have experienced.

  1. Timehop – Complete product is built around Nostalgia. Reminds users of special moments from the past.
  2. Facebook – 2014: Year in Review videos
  3. Twitter – 8th Anniversary: Which was your first tweet.

Tip: ‘Nostalgia’ helps get back old users and revives their interest. Can be only used once in a year on special occasions.

6. Curiosity

Curiosity: People want to know. They fear on losing out. Keep them curious.

Keep users curious. Keep them looking for more.

  1. LinkedIn – The feature ‘who viewed my profile’ tries to keep its users curious, and engaged.
  2. Twitter – Catching up with Timeline, mostly is the fear of losing out.
  3. BuzzFeed / UpWorthy / ViralNova – All try to trigger curiosity of readers through their post titles.

Tip: ‘Curiosity’ in products helps you increase repeat usage.

7. Competitiveness

Competitiveness: People love to compete with others. Creates a sense of achievement. Make it happen.

Drive users to compete with friends / others.

  1. Foursquare – The leaderboards between Friends was a great way 4SQ ensured people kept checking in.
  2. Quora – The feeling of ‘I have a better answer’ or ‘I can answer this question in a better way’ keeps driving engagement.
  3. Fitbit – Leaderboard that tracks your fitness with friends.
  4. Hackrank – Programming challenges.

Tip: ‘Competitiveness’ leads to greater engagement. Though its novelty in private group is lost after some time.

8. Stay Organized

Stay Organized: People love to organize things. Organize everything. Make it happen

Give users stuff that they want to sort / organize. Keep them busy.

  1. Pinterest – Lets you organize pins / interests/ stuff you love.
  2. Evernote – Organize all your notes.
  3. Wanelo – Organize fashion stuff. Ask girls how much they love doing this.
  4. Calendar / Contacts – They are always in a mess. Its a never-ending struggle to organize this. Google Contacts & Google Calendar help you keep them in place.

Tip: ‘Staying Organized’ helps your users spend more time in your product. It soon becomes a habit.

9. Importance

Importance: People love to feel important. Its about them. Their identity. They want to show off.

Make your users feel important about themselves.

  1. LinkedIn – My professional achievements., that is how a user sees it.
  2. Twitter – My views. My opinions., that is how a user tweets.
  3. FourSquare – Checkin is telling the world – I am here.
  4. About.me – This is me. This is my identity.

Tip: ‘Importance’, everyone wants to be important. The product usually ends up being shared, talked about – and results in others wanting to do the same.

10. Authority

Authority: People love to display their authority on a topic. Give them opportunity to do that.

Help create authority for users. Users want to be acknowledged as influencers by others.

  1. Quora – Authority by Topics. Asked to Answer is being authoritative.
  2. StackExchange – For programmers.
  3. HackerOne – For hackers.
  4. Hacker News – For Geeks.

Tip: ‘Authority’ is the importance others in a community or forum assigns to select users. Users want to be acknowledged as being authoritative, it helps increasing engagement and spending time on the product.

11. Visual

Visual: People love stunning visuals. Its a powerful emotion.

Visuals create impact in product. Don’t miss on it.

  1. Instagram – Personal Emotions.
  2. Flickr – Professional Emotions (yes unfortunately for Flickr).
  3. 500px – Photography community.

Tip: ‘Visual’ is a substitute to all unsaid emotions. Use well when your product is build around pictures and photographs.

12. Freebies

Freebies: People love Freebies. Badges. Credits. It all works.

Freebies work. Make use of them correctly.

  1. Quora – Credits users get when other upvote their answers.
  2. FourSquare – Badges for Check-in.
  3. Uber – Credits to Refer Friends.
  4. Facebook / Twitter / Google – Regularly use Advertising Credits to on-board new advertisers.

Tip: ‘Freebies’ – use it only for one purpose. Can be used for activations, sharing or driving engagement. Use it for one use-case that can measured.

13. Money

Money: People want to make Money. People want to receive Money.

Money is one of the strongest emotions. Portray it positively.

  1. Google Adsense – Opportunity for bloggers, individuals, publishers to earn money online.
  2. PayPal – Receive money from anyone.
  3. Elance – Get paid for free-time work.
  4. Kickstarter – Raise money for your projects.
  5. Gumroad – Make money by selling digital goods.

Tip: ‘Money’ – Receiving Money / Making Money is a positive emotion. Giving away is negative.

14. Sex

Sex: People want Companions. People want Dates. People want Sex.

Keep it simple, keep it safe.

  1. Tinder – Helps you find date.
  2. Match.com – Helps you find date.
  3. OkCupid – Helps you find date.

Tip: ‘Sex’ – It is more about selling the Hope. Keep the product simple. Don’t over engineer.

Concluding Notes:

When you build any feature, try to trigger a emotional engagement with user. If you are in early stage of your product development or in process of making your product roadmap, spent some time with this methodology – 15 Steps Towards Building a Great Product.

When it comes to including emotions in your product, ensure the following:

  1. Use max 2-3 emotions per product.
  2. Gamification is not about building features. It is about emotionally engaging a user.
  3. Don’t exploit users. Be subtle. Be good.
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Building that 1-Click magic in your Product

Many startups struggle when it comes to building features for their product. Their product road-maps are a list of features they plan to include over next 6-9 months; once they are built out – its a feature mess ~ too many things to do that leaves the user confused.

This does not stop here., entrepreneurs always have this gut feeling – the next feature will be ‘the one’ that will make it up for us. End result is the product becomes feature-heavy or too complex to use.

On my last post – 15 Steps towards building a Great Product, I posted about a simplified approach towards building products; this post is about adding a little magic with just 1-Click.

Here are some examples of 1-Click features:

  • Amazon: 1-Click Checkout (Transaction)
  • AngelList: 1-Click Apply to Accelerators (Application)
  • AngelList: 1-Click Introduction for hiring talent (Hiring)
  • Facebook: 1-Click Sign-in for 3rd Party Apps (Registration)
  • Foursquare: 1-Click Check-in (Location)
  • LinkedIn: 1-Click Endorsement (Interaction)
  • LinkedIn: 1-Click Apply (Hiring)
  • Quora: 1-Click Upvote (Endorsement)
  • Twitter: 1-Click on # for Topics & Trends (Buzz)
  • Uber: 1-Click to Book-a-Cab (Location)

The equation is simple here – what is the core data the product has about the end user and figure out the 1-click feature that best suits your product use-case.

Example.,

  • Amazon stores user data & credit card information which enables it to do single click checkout.
  • AngelList has a startup profile that it connects with investors / accelerators / talent.
  • Facebook has user information & social graph through which it allows users to signup for 3rd party apps.
  • LinkedIn has professional profile of the user through which it allows users to apply for jobs.
  • Foursquare has user’s location that is used to check-in at a venue.
  • Quora has user’s credentials that are used to upvote (or endorse) a particular answer.
  • Uber has user’s location that is used to book a cab.

Similarly there are opportunities for 1-click on-site distribution. Share on Facebook, Retweet on Twitter, Re-pin on Pinterest or Re-blog on Tumblr are some superb examples of on-site distribution achieved by a single click!

Concluding Notes:
Many startups choose to ignore simple means to add a magical experience to their products. Focus on building too many features makes the product a bit complicated and difficult to use.

Remember – most startup products / features are just connecting two dots. Do that with a single click and make it feel like magic!

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How to Build a Great Product by Removing Barriers to Usage

Product creators often tend to think of products in terms of features. I’m not talking about the traditional myth of “more features is better” that got debunked a long time back. Product creators still think of features because they try to deliver a certain functionality. Instead, a product should actually be visualized as an answer to a pain point. Users don’t use products because they need certain features. Users use products because they have been trying to do something but were facing a barrier while doing it so far and the product helps lower the barrier.

A pain point can often be stated in the following terms:

I am a <USER DESCRIPTION>

Trying to <DO XYZ>

But I’m unable to do so because of <A BARRIER>

Products that lower (or completely remove) the barrier to getting something done tend to create entirely new market segments that had never existed earlier.

The Skill Barrier

Lack of skills is one of the biggest barriers to getting something done. We hire the carpenter, plumber etc. to get stuff sorted owing to the skill barrier. Products that help ‘unskilled’ users do something they couldn’t have done before break the skill barrier and open up a new segment of users.

WYSIWYG website creators and editors enable creation of landing pages and websites without the need to know HTML. WYSIWYG editors help non-coders launch landing pages with little effort and create a new market in the process.

Instagram lowers the skill barrier required to create arty pictures that earlier required photoshop prowess.

In all such cases, the lower barriers lead to greater adoption than would have come through direct competition. A me-too Photoshop competitor, even if it was free, would never have gained the adoption that Instagram did.

The Time/Effort Barrier

People are strapped for time. A value proposition based around time savings or lower effort is an attractive one. Bloggers needed to invest time and effort to write posts that would stand out. Twitter brings down that barrier and allows publishing with very low investment of time and effort. Since everyone has the 140 character limit and given how democratic the real time feed is, there is no humungous effort required to stand out anymore.

Another common theme that disrupts the time/effort barrier is aggregation. Platforms that aggregate multiple providers often provide a compelling value proposition as a one-stop entry point. In the early days of the web, Yahoo provided value as the home page of the web. As the web grew and portal-based navigation grew clumsier, Google emerged as the one-stop solution to accessing anything on the web. Meta search engines (e.g. Adioso) act as the one-stop entry point and allow a user to search across multiple providers, thus drastically reducing the time to get her job done.


The Money Barrier

Online services are increasingly trying Freemium offering a basic level for free to the more amateur producers with limited needs. These tools were only available for a fee earlier. Having them available for free creates an entirely new market. Users from the existing market also deflect towards a free alternative. Over time, some of them migrate to a paid tier. While lower price has never been a sustainable competitive advantage, completely free has the potential to disrupt an existing market.

Unbundling is another way the internet brings down the money barrier. Music was traditionally sold as albums. Users would have to buy an entire album even though they liked only 1-2 songs in it. iTunes disrupted this market by allowing per-song billing. In doing so, it made the market a lot more efficient and consumers who would ordinarily not have purchased an entire album to get a particular song also ended up buying the song.

The Resource Barrier

Let’s take an example closer home. Entrepreneurship has become mainstream like never before. There are several reasons that contribute to this phenomenon but one of the most important is the drastic reduction in the resources required to get a company up and running. One of the many contributors to this change is the rise of Amazon Web Services which lowered the resources and upfront investment required to get your service up and running. While a startup would have had to get a minimum level of infrastructure upfront earlier, it can now dip into Amazon’s vast resources on-demand.

The Access Barrier

Platforms often disrupt gatekeepers by allowing producers direct access to potential consumers.

Most media businesses (publishing, performing arts etc.) are industries with gatekeepers determining which producers get market access. Platforms like Amazon Kindle Publishing, YouTube, CDBaby disrupted these industries to varying degrees by allowing producers direct access to a market of consumers tho whom they could market themselves.

This applies equally well to marketplaces. The long tail of sellers on online marketplaces wouldn’t have existed in the real world as they wouldn’t have had access to the niche market that would be interested in their product. eBay created a large segment of sellers which never existed previously by lowering he access barrier.

The investment community (angel investors, VCs etc.) is not necessarily an equal-access community and the right connections and introductions can open many doors that would otherwise not have existed. Kickstarter seeks to democratize access to investment by allowing anyone to set up a project, state funding requirements and raise money online.

These examples repeatedly demonstrate the fact that lowering barriers to get something done creates new markets for the product. Competition on the internet is no longer about fighting tooth and nail over price or features as was the case with traditional businesses. In today’s age, competition is about offering a value proposition that is offered by no one else and creating an entirely new market of consumers who had a latent need but no readily available solution to solve that need. Companies that do this effectively win.

The post first appeared on platformed.info