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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 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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No. 10 : product manager is for successful products, let’s explore 10 success tips

Keeping with the world cup fever, where No.10 is center of everything for success, thought of writing this post on success of product managers, who are the No.10 for success of products.

Here in plan to share 10 tips for successful product management. This is based on my dozen years’ experiences in the function, working in Ramco, Hyperion and SAP, rolling out both successful and not so successful products, primarily enterprise software products.

1. Network to thrive: product managers most important tip is to be really networked, this needs to be in person in 1×1 and 1xN interactions, through social media and web and with internal team for key influencing, especially if you are in a bigger organization.

Network across

  • Build key customer circles
  • Stay close to Sales
  • Specialist groups
  • Coffee corners and peer to peer networking

2. Communicate to succeed: closely connected to the networking, the success to networking is communicate, communicate, communicate…product managers should constantly be communicating with all stakeholders. Whom

  • Internal – Influence without managing, especially with designers, developers and architects
  • Internal – Talk technical or functional
  • Internal – communicate to executives
  • External – Speaking in events, develop Executive presence
  • External – Speaking with customers/prospects

3. Specialize: Remember product managers are the Specialist…

  • Different levels of specialization – Level 1 across company portfolio and strategy, Level 2 across your product portfolio and functional, Level 3 in your product and best practices
  • Functional & Technical expertise (product managers need a balance and understanding of both)
  • Better customer exposure levels will only be more when you are a specialist

4. Know your competitors: product managers need deep understanding of competitors through publically available…Analyst Reports, websites, interacting with sales/presales, Win stories, loss analysis participation.

Important tip is to contribute to competitive differentiation.

  • Both feature/function as well as more strategic levels.
  • Have different comparison charts, ones for your field/sales that will help to highlight how products are better than competitor’s products to sell and for development that highlights weaknesses that will help better the product or build new ones.

5. Know your markets: product managers do not make products for specific customers, but for markets. So it’s important to understand which markets that you are focusing and understand the dynamics of those markets.

  • Understand Developed and Emerging market dynamics.
  • Understand Nuances of each market, cultural aspects e.g. US: Keep it simple and bit high level, Europe : Get to the details.
  • Style of business function e.g. whether in general the focus market is more result oriented or more believers in process oriented style.

6. Negotiate: Product managers spend most of their time negotiating, so acquiring some tips to better negotiate is very important.

  • Talk like a customer to developer, brining customer perspective and value for every key step
  • Be face of development to sales and customers, and bridging the business /technology gap
  • Build data points to back up every discussion
  • Build credibility across internal/external stakeholders, remember the expert tip which is interconnected to make this happen
  • Talk use cases/real life examples/personas…

7. Senior management buy in : connected to the negotiation, but more important is the ability of product managers to negotiate and influence their management.

Remember it’s not enough if you have great idea, you need to convince senior management

  • Be prepared for a 15mins, 30 mins…meetings with ideas & how it can be monetized
  • Leverage every opportunity :
  • Investment in new areas
  • Convincing to continue investment
  • Strategic acquisitions for fast time to market
  • Managing different point of view – as management may have a broader understanding so you need to think and be prepared to tackle those povs.

8. Spread your knowledge: product managers are the experts, but experts are known only if they share their expertise. Important you spread your knowledge

  • Find all avenues to share your knowledge on product, best practices and the “whys?” more than what? Or how?
  • Blog, tweet, build content, do trainings, challenge yourself against real life examples
  • Drive discussions towards the way you want to position your product
  • Pick on customer advisory board sessions
  • Tell your customer success stories

9. Balance your time: Product managers face customers/sales, development and strategic (with management). Time is precious. Important tip is to balance and spend equal time amongst different or else you can’t be successful

10.Mini CEOs: Finally product managers have to behave like mini CEO, within the scope of the products they work. Essentially product managers

  • Claim ownership – with which comes the responsibility of success or failure of the product
  • Have Business (for sales), technical (for development) and user (for designers) views
  • Compare it with market – and constantly strive to improve or reinvent
  • Know your numbers – important to know how is the business doing and what are financial or other goals
  • If you are product manager or one aspiring to be, the above tips should be very handy. While you may or we all have come across, consciously following this may help, as i have found it to be useful as i practice it in my past years of experience as product manager.

Let me know if you have other tips to share, questions on the above or other comments

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Clearing The Air: 3 Roles Indian IT Providers See as Product Management

The Indian IT industry is over $100bn, but still struggles in creating global IT products.  While there has been the occasional Tally, Ramco, or Finacle, there is not much else.  One critical reason I attribute this to is that Indian IT companies do not really understand how Product Management can create long term customer value and business sustainability.  While one can argue that there have been more of these companies in the last 5 years (Livemint: Tech Startups), the next 5 years will determine whether India has actually created global products.

Most Indian companies view product management as either of these: Product development, delivery (or project) management, and marketing (or marketing communications).

Role 1: Product Development:  Great at problem solving, developers are expected to provide insights on what they believe the customer wants, and create products based on their understanding.  Let’s admit, very few developers are comfortable socializing with customers (aka Raj Koothrapalli – awkwardness multiplied a few times).  I have often encountered developers spending hours defining products, with limited idea on how the customer environments actually are (a few minutes meeting customers would have saved those hours).  The smarter ones are able to engage with customers, but put them in front of a business strategy plan, and things slow down again.  BTW, this may work for startups, where the founder often has a clear intuition about the idea, but when they have to scale revenues up (to new customers or increased wallet share of existing customers), most struggle.

Role 2: Delivery (or Project) Management: They engage with customers and internal teams, to co-ordinate schedules and resources.  However, expecting them to gather requirements because they are engaged with customers, based on which products are created, is better suited for an IT services delivery, not for sustainable product IP creation.  Today, most Indian SI companies are struggling as they attempt to create product IP and value, because of this belief and expectation from delivery managers to “productize” based on customer specific projects.

Delivery and Services Approach

Role 3: Marketing (or Marketing Communications): Marketing teams are definitely engaged with the market, but most are focused on lead generation and marketing communications, and the execution of those plans, rather than gather actual feedback.  Thus, what we get are customer leads, with very little investment in market research aligned with direct customer engagement.  Recall the last time you attended an IT vendor’s event, and exchanged business cards with their marketing person – I can’t!

As long as Indian IT companies continue to depend solely on one of the above to help create long term products, they are going to struggle in creating global products, and building the valuations that Apple / Microsoft / Google / Salesforce (and many others) have.

I end with my definition of Product Management – engagement with the market and customers, through multiple channels, to understand stated and unstated needs, analyze the potential opportunities, align with corporate strategy, and work with sales, marketing,  and development teams, to translate the needs into a multi year product roadmap, eventually creating products that customers desire (read Apple, though the approach may have been slightly different 🙂 )

If your current teams are geared and empowered to do this effectively, time and again, then you maybe in the right direction to be hailed as an Indian product company (if not already) soon.

Guest Post by Angira Agrawal, AVP and Country Head – Cloud atNEC India Pvt. Ltd

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Fifth iSPIRT Playbook Roundtable: Product Manager, the Skill in Demand

It is a cliché to say product management is both art and science. The product manager’s function encompasses a range of tasks, only limited by the company’s vision. Deep Nishar, Senior VP, Products and User Experience, at LinkedIn, told the audience at Nasscom Product Conclave 2012 that, “product managers should have brain of an engineer, heart of a designer and speech of a diplomat.” The product manager with such an expanse of skill set is hard to find in India. With the intention of bringing experiential learning and to ignite conversations among product entrepreneurs so that they learn from each other, iSPIRT, the think-tank for startups, is organizing Playbook Roundtables that facilitate transferring of key knowledge through an open discussion. In the fifth Playbook Roundtable organized at Chennai by iSPIRT, Sridhar Ranganathan, who has rich experience as a product manager, shared anecdotes quoting from positions he held at Zoho, Yahoo, and InMobi to define who a product manager is.

Sridhar’s naval architecture career did not last long. A chance meeting with Sekar Vembu, founder of Vembu Technologies, landed him a job at AdventNet (all three Vembu brothers, Sridhar, Sekar, and Kumar were part of AdventNet then). He was placed to manage a team that was working on a product. Not a geek, he took three months to understand Java Script. A management shake-up at AdventNet properly designated him as product manager. Then began his tryst with product management. At Zoho, the discipline of product conception, execution, and delivery was practiced with a high level of checks and balances. With a small team and margin for error almost non-existent, Sridhar learned to work with constraints to deliver software products. Moving on, he headed the team working on Maps at Yahoo. This proved to be challenging as managerial oversight was nonexistent but any senior level meetings thrashed any feeling of achievement. Sridhar by now had crafted the art of product management and he had an excellent team to work with. Then at InMobi, his challenge was scale. He was able to successfully navigate through the phase where InMobi’s ad impressions went up from 50 million per month to 2 billion per month.

The product culture

There were 15 participants from OrangeScape (Suresh Sambandam and team), Fresh Desk (Smrithi, product manager), Kallos (George Vettah), LPCube (Lakshman Pillai), Array Shield (Vasanthan Kumar), ContractIQ (Ashwin), Twenty19.com (Karthikeyan Vijayakumar), RailsFactory (Mahendran), Fix Nix (Shanmugavel and team), Social Beat (Suneil Chawla), and Humble Paper (Vivek Durai), represented by its mostly founders. Suresh was keen to know how with a small product team (Zoho instituted a culture of a seven-member team to work on a product), Zoho was able to recruit college drop-outs and train them to work on products. Sridhar said if the company is big enough and has a strong culture (such as escalation of wrong codes, build times, and customer complaints to the highest level if not done within a set time frame), such experiments are possible. In Google, you know the person who is going to work because of the recruitment process but at Zoho, you have to groom the person.

Sridhar strongly emphasized that data plays a big role in product management and went on to say that “if you build technology products, your core data model and technology stack determines your business model.” He listed various challenges faced by organizations such as SalesForce to remove duplication of data. For example, to change a primary key, Zoho needed 14 months. George Vettah added that Ramco had to reengineer its offering after SAP effectively took away its market share. Sridhar gave away one more of his product philosophies: “If there is a constraint in the product, and if you have the market, you could only pray that the market does not go away till you reengineer the product.”

Education to Product: the product continuum

Through a graph, he illustrated the various stages of the product continuum: Taking problem complexity on one axis and scale or impact on the other, he said, for low problem complexity and low scale, education (of the customer to tell them why your product) is needed. At the next level, process needs to be defined (to quote an example, the process of how to apply for a passport online), Still further, at the higher complexity and more users, you need to define the procedure (how to fill in the form of the passport application), and still at a higher level, you need to provide a solution to the problem. But for a very complex problem with the highest impact (nonlinear), you need a product. So by understanding the need and the impact, you can execute your product strategy.

The product manager

He said that the fundamental role of the product manager is to identify the product that has the maximum probability of success. “The success metrics of a product determines the product manager’s action,” he added. This was followed by an interesting discussion on how the founder passes the baton to the next product manager as the company scales up. Kaushik from OrangeScape provided a fine example. The product manager has to work on three aspects: hygiene, spoiler, differentiator. A hygiene part of the product is not impactful but without it the product wouldn’t work. The spoiler is beating the features of the competition, and differentiator is the difference that your product makes. Further, at the first level, the product manager has to find users for the product, at the next the user level should be scaled, say from 2000 users to a million users, and further at the next level, if there is a drop in user level due to competition, the project manger has to devise ways to retain the user level. These three different stages require product mangers of different skill sets.

Finding the right product manager

Finding the right product manager is a challenge. Sridhar said the right product manager is identified by his ability to align with the vision of your organization and should have the potential to grow with the organization. For him, the hiring decisions are not done in a day. Sometimes it stretches to two months as he engages in long conversations with the potential candidate. Then an interesting discussion on organization structure where most of the times the product manger is asked to “influence without authority” was discussed. “The product manager has to be temperamentally strong,” stressed Sridhar. In many organizations, the developers and engineers are not direct reports of the product manager. Engineering team is headed by a senior engineering head. But your input on the engineer decides his grading. So at most positions, product managers have to work with teams that don’t directly report to them. By telling the team the importance of the product and by selling the vision (by exercising influence without authority), you need to get the work done. Smrithi, from FreshDesk, said influence without authority was one of the attributes looked for in a product manager in her earlier employment. George Vettah added that research has shown that for product managers did not possess strong right brain thinking (creative) or left brain thinking (analytical), but somewhere that balanced both.

Building the product, managing the team

The ideal way to enforce build discipline is to have a release ready after every build. This is practically impossible but if achieved, gives the product management team an edge on product release. This also makes sure that the product isn’t broken. Several R&D prototyping needs to be done before the product is handed over for completion to the engineering team. Once the product is fixed and passed to engineering team, it’s difficult to tweak again. So spend as much time in R&D rather than “release early, release often.” Sridhar said managing multiple products only requires you to have user interface and data operability aligned.

The product manager has to find the right time to pivot. Sridhar asked the participants to read Lean Startups by Eric Ries. The author has dwelt at length on pivoting. Failures are part of product management but how the product manager negotiates such down moments counts. The product manager has to be mentally strong. For any of the product manager initiatives, winning the trust of the stakeholders is key, stressed Sridhar. He added that the satisfaction of seeing the product completed after your visual thinking on it is immense. He said that the product manager’s role is cerebral as it involves a lot of thinking.

There were intense discussions when each of the issues was discussed among the participants. Vivek Durai, who is now solely developing a product, said his priority listing has changed and his to-do list has a lot of elements to add up to. Kaushik said his respect for his previous product managers had risen after this discussion. Suresh felt some more improvements can be made to the discussion format. Suneil felt that the discussions were insightful and opened his world to product management. Karthikeyan Vijayakumar said he would implement a lot of stuff from the discussions.