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It takes time to build something successful!

Since SaaSx second edition, I have never missed a single edition of SaaSx. The 5th edition – SaaSx was recently held on the 7th of July, and the learnings and experiences were much different from the previous three that I had attended.

One primary topic this year was bootstrapping, and none other than Sridhar Vembu, the CEO and Founder of Zoho, was presenting. The session was extremely relevant and impactful, more so for us because we too are a bootstrapped organisation. Every two months of our 4.5 year-long bootstrapped journey, we have questioned ourselves on whether we have even got it right! If we should go ahead and raise funds. Sridhar’s session genuinely helped us know and understand our answers.

However, as I delved deeper, I realised that the bigger picture that Sridhar was making us aware of was the entrepreneurial journey of self-discovery. His session was an earnest attempt to promote deep thinking and self-reflection amongst all of us. He questioned basic assumptions and systematically dismantled the traditional notions around entrepreneurship. Using Zoho as an example, he showed how thinking from first principles helped them become successful as a global SaaS leader.


What is it that drives an entrepreneur? Is it the pursuit of materialistic goals or the passion to achieve a bigger purpose? The first step is to have this clarity in mind, as this can be critical in defining the direction your business would take. Through these questions, Sridhar showed that business decisions are not just driven by external factors but by internal as well.

For example, why should you chase high growth numbers? As per him, the first step to bootstrapping is survival. The top 5 goals for any startup should be Survive, Survive, Survive, Survive, Survive. Survival is enough. Keep your costs low and make sure all your bills are paid on time.  Cut your burn rate to the lowest. Zoho created 3 lines of business. The current SaaS software is their 3rd. They created these lines during their journey of survival and making ends meet.


Why go after a hot segment (with immense competition) instead of a niche one?  If it’s hot, avoid it i.e. if a market segment is hot or expected to be hot, it will be heavily funded. It will most likely be difficult to compete as a bootstrapped organisation and is henceforth avoidable. Zoho released Zoho docs in 2007, but soon as he realized that Google and Microsoft had entered the space, he reoriented the vision of Zoho to stay focused on business productivity applications. Zoho docs continues to add value to Zoho One, but the prime focus is on Applications from HR, Finance, Support, Sales & Marketing and Project Management.  Bootstrapping works best if you find a niche, but not so small that it hardly exists. You will hardly have cut throat competition in the niche market and will be able to compete even without heavy funding.

Most SaaS companies raise funds for customer acquisition. Even as a bootstrapped company customer acquisition is important. As you don’t have the money, you will need to optimise your marketing spend. Try and find a cheaper channel first and use these as your primary channel of acquisition. Once you have revenue from the these channels, you can start investing in the more expensive one. By this time you will also have data on your life time value and will be able to take better decisions.

Similarly, why base yourself out of a tier 1 city instead of tier 2 cities (with talent abound)? You don’t need to be in a Bangalore, Pune, or a Mumbai to build a successful product. According to Sridhar, if he wanted to start again, he would go to a smaller city like Raipur. Being in an expensive location will ends up burning your ‘meager monies’ faster. This doesn’t mean that being in the top IT cities of India is bad for your business, but if your team is located in one of the smaller cities, do not worry. You can still make it your competitive advantage.

Self-discipline is of utmost importance for a bootstrapped company. In fact, to bootstrap successfully, you need to ensure self-discipline in spends, team management, customer follow-ups, etc. While bootstrapping can demand frugality and self-discipline, the supply of money from your VC has the potential to destroy the most staunchly disciplined entrepreneurs as well. Watch out!

And last but not the least – It takes time to build something successful. It took Zoho 20 years to make it look like an overnight success.

This blog is authored by Ankit Dudhwewala, Founder – CallHippo, AppItSimple Infotek, Software Suggest. Thanks to Anukriti Chaudhari and Ritika Singh from iSPIRT to craft the article.

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Scaling Sales: A Deep Dive At SaaSx Fifth Edition

As a first time attendee of iSPIRT‘s annual SaaSx conference, I didn’t know what to expect as we drove along the western coast of India towards Mahabalipuram – the venue for SaaSx5. From all the chatter around the event on Twitter, it looked like the who’s who of SaaS leaders in India were attending. Upon arrival, I took my seat with my colleague and looked around. There were only about 100 people in the room, very different from most conferences I’d attended in the past – a lot more exclusive, and a melting pot of SaaS founders building a diverse set of products. It had all the markings of an inspiring day, and it did not disappoint.

Starting with a keynote from the estimable founder of Zoho, Sridhar Vembu, the day was packed with talks and discussions focused on growing one’s SaaS company in the current technology landscape, primarily led by founders of notable SaaS companies of the country. One such event was an unconference on “Setting up and Scaling Sales across Segments and Geographies”, led by Ashwin Ramasamy from PipeCandy.

Picture this: about 80 founders seated in a room, circled around Ashwin who was leading the conversation about setting up and scaling your sales team. Since the flat organizational hierarchy at SignEasy, and the culture of openness at the company provide me with a wonderful vantage point of all functions across our company, including sales, I was eager to listen to the different perspectives that the founders brought to the table. At the start of the discussion, Ashwin graciously asked the audience for talking points they’d like covered, and the discussion began. A plethora of topics were discussed, starting from the very definition of inside sales, leading up to when and why to deploy an inside-sales team. Hiring and putting together the right sales team, including whether it should be in-house or outsourced, was another hot topic of debate with many founders offering their own experiences and perceptions.

The conversation then steered towards outbound sales and the mechanics and economics of that, which contributed to some of the biggest takeaways for me – things that cannot be found in a book and are only learned through experience.

The success rate of outbound sales peaks at 2%, as opposed to the 40-50% success rate you come to expect with inbound sales. This was an interesting insight, as it’s easy to assume your outbound effort is underperforming when it could actually be doing quite well. Also, you should use the interest you’re receiving through the inbound channel to refine your outbound strategy – your inbound interests are a goldmine of information on the kind of industries, company sizes, and job functions your potential customers represent. At SignEasy, we are constantly honing our outbound target by capturing as much information as possible from our inbound requests.


Further, the efficacy of your outbound sales effort is a direct function of the maturity of the market you’re in – for a saturated market with tens of other competitors, outbound usually fails to make a mark because it’s difficult to grab a potential customer’s attention. This is a great rule of thumb to decide if outbound is for you, depending on the market your product serves.

Outbound sales also requires dedicated effort rather than a ‘spray and pray approach’ – a minimum 6-month commitment is crucial to the success of your outbound strategy. Founders should be deeply involved in this initial effort, sending out 500 emails a day for at least 3 months, and tweaking and iterating through them as they get to the most effective email. It’s also important to dedicate yourself to a channel when experimenting, but also experiment and exhaust numerous channels over time to zero in on the most effective ones.


The value of this discussion, and indeed the day, was best expressed by the ferocity with which my colleague and I took notes and wrote down every piece of advice that was being dropped around the room. Being product leads of the SMB business and mobile products respectively, Phalgun and I were amazed at how much we could relate to each point being discussed, having been through and living the journey first-hand ourselves at SignEasy.

SaaSx5 was nothing short of inspiring, and we emerged from it feeling uber-optimistic about SaaS in India, and what the future holds

This blog is authored by Apoorva Tyagi, Product at SignEasy

Sales Stack: A Recipe for Selling a Product Globally from India #Delhi

This PlaybookRT will focus on Product startups (B2B) who are keen to sell to the global market. The PlaybookRT is facilitated by Samir Palnitkar, President of Shopsocially.com. Samir will host a highly interactive Playbook Roundtable for Product Startups and share his journey of building shopsocially globally.

Similar to a “development stack” used to build a product, this roundtable will introduce the concept of a “sales stack” that is used to build an entire sales process geared to selling overseas by keeping as many resources in the India office.

Topics covered in this roundtable will be the strategies, techniques, team and the infrastructure required to sell a product effectively from India. Enough working examples will be provided to give a real feel for how the process might work. The objective is for attendees to walk away with enough knowledge to build a sales stack within their own companies.

Samir will cover the following topics:

  •                  Building a website geared towards sales
  •                  Team Structure
  •                  Required Infrastructure
  •                  Marketing driven lead generation
  •                  Target List creation
  •                  Building collateral and scripts
  •                  Tracking lead progress
  •                  Analytics and monitoring
  •                  Sales closing

To apply for this PlaybookRT please fill up the online application and we will get back to you. The session is open to the company’s Founding Team, CEOs and/or head of Sales. Applications are due by the 5th December 2015. The goal is to have at most 12 companies so as to make the interaction effective. If there are other interested attendees, we will arrange a subsequent RoundTable. This PlaybookRT is FREE and there are no charges.

Brief profile of Samir:

Samir is a serial entrepreneur with over 20 years of industry experience. Samir’s passion is startups and new ideas. He is a founder of four successful startups which include I2P acquired by Lattice), Obongo (acquired by America Online), Ingot Systems (acquired by Synopsys) and AirTight Networks (category leader in secure, cloud WiFi). Samir is also an active early stage investor and advisor. His expertise includes social media, strategy, productization/execution, and business process setup.

Samir holds a B.Tech in Electrical Engineering from Indian Institute of Technology, Kanpur, an MS in Electrical from University of Washington, Seattle and an MBA in International Business from San Jose State University. Samir is the author of two highly acclaimed books and holds 5 US patents.

How To Set Up And Create A Winning Effective Sales Team #PlaybookRT

This Roundtable will be facilitated by Dhiraj Kacker, CEO of Canvera, who has built a feet on street sales team of 425 people spread across 200+ cities covering nearly every non-tribal district in the country.

It is well known that selling software and solution to small business is tough proposition across the world. However selling to the Indian small business makes it an order of magnitude more difficult as the Indian small business expect and demand enterprise software kind of engagement at consumer level price points.
There are several other issues that have to be addressed such as education of the buyers, overcoming trust issue, identification of right channel for scaling and so on. Solving some of these issues takes the fight to the streets to win the small business customer.

Share and learn together in a round table discussion on this topic on 24 Sep 2014(Wednesday), 5 pm at Canvera office in Bangalore.

Roundtable is an initiative by iSPIRT under the Playbooks pillar where small group of practitioners come together to discuss and resolve their business challenge. This is peer discussion anchored and facilitated by an leading practitioner whose further ahead and solved some of the issues.

Roundtable is curated list of practitioners, please share your name to be invited for the roundtable. Mention what problems would you like to discuss and how you would contribute to the roundtable discussion, that will allow us to send the invitation at earliest. Apply here for the PlaybookRT

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iSPIRT Sales RoundTable: Acquiring initial customers, Early product management, Indian SME Selling

Yet another extremely educational round table from iSPIRT – 8 out of 12 participants gave it a rating of 10/10!  Girish from GreyTip and Shashank from Practo led the round table and Aneesh and Yashwanth contributed with their experience at Capillary.  This article captures some of the key learning from the round table.

The focus of this round table was on acquiring the initial set of customers, particularly in the context of SME segment in India. However, several takeaways are applicable in a general context too. Other topics included early product management, hiring and motivating the sales team and channel partners, and product pricing.

Acquiring your first customers

One of the most common and biggest pain points for a startup is getting the initial customers. Enterprises don’t want to talk to start-ups as they are looking for a mature, tried and tested product. Channel partners also do not want to talk to start-ups unless they have proven sales record and reference customers.  It’s a catch 22 situation.  Add to that the long sales cycle of 2 to 6 months and it can be a very frustrating experience.

Shashank shared the learning from Practo’s journey of acquiring the initial customers:

  1. For the first 50 customers, the CEO did the sales and got them to sign up.  
  2. The focus on the first 50 customers was on product market fit (more from product management perspective than customer acquisition).
  3. Early on, they were not focused on pricing, but on getting people to use it.
  4. They went behind early adopters who were open to technology and did not try to engage with the late majority or the laggards. For example, if they found a doctor using an old feature phone, they would not consider him as an early adopter.  Lead qualification is very important.  Focus on quality leads rather than trivial leads.
  5. In the earlier days, they segmented the market and targeted only dentists in Bangalore and only later expanded to other geographies and kinds of doctors.
  6. They spent almost the first year and half to figure out what the customer wanted.
  7. Some of the unique things they did included not giving any incentive to existing customers to refer other customers. They wanted the customer to find so much value in their offering that they would refer on their own.  They had a zero referral fee policy as they wanted genuine references.

According to Shashank, four key things that they did right were:

  1. Spending hours with the USERS to understand their needs.  They measured each and every action the user is doing and used it to qualify the lead.   They had in-built tools in their product to measure usage.
  2. They build for needs that can SCALE to several other users.
  3. Focusing on PAID needs.
  4. USAGE was their best friend. 

Girish from Greytip talked about his journey from being on-premise only software to providing a cloud based solution too. They launched their SAAS version in 2007 when it was still nascent.  To experiment, they built a small product on SAAS.  They used the beachhead strategy i.e. get a first achievement that leads way to future successes.  The beachhead strategy goes by the name of MVP (minimum viable product) these days.

 

During the beachhead stage, they validated aspects such as customer need, data center hosting, cloud strategy, multi-tenancy etc.  Once they saw traction, they realized there is a much bigger market and they started adding more features to the product and scaling sales.  And they experimented with different things such as free trials, doing the sale completely online etc. They also tried SEO and SCM.

For their product, they saw that free trial did not work.  Nor did they see a sale being done completely online.  Girish’s hypothesis is that for their kind of product (payroll), people want someone to speak to and hold responsible for delivery and timeliness. On the other hand, some companies have got all their sales in the Indian B2B context fully online.  That is why it is crucial to validate the assumptions in the problem space and target market. 

The key takeaway is to experiment different things to figure out what will work for a given product in a given market context.  SEO, SCM, Adwords got them leads, but fulfillment was never 100% online. It required a human to close the deal. 

 

Do a bunch of experiments and have clear metrics on what you want to measure to decide the effectiveness of the experiment.

Getting the first customer takes the longest time.  Getting the second customer takes much lesser time. Getting the 10th customer is much faster and getting the 100th customer more so.  Customer acquisition time drops exponentially.

Metrics is always useful to convince value to customer.  Have an ROI calculator.  Quantify the perceived loss of not using your product.

To get initial customers, do whatever it takes.  Keep chasing the right guys. Use personal references and networking to get meetings. Once you get the meeting, then it is up to the product fit and normal sales cycle.

One company got their first customer after 10 months. And then it took them 14 more months to get to 10 customers.

Get 5 or 6 testimonials and users who love your product and only then go aggressive on sales. Build the product along with 5-6 target customers. First, figure out if there is a need for the product. Follow the lean startup model that is quite popular in startup literature. It really works!

In these times, the product has to give Instant Gratification when the customer tries the product for the first time. For example, with Practo, a doctor can send SMS to a patient within 30 seconds of starting trial.  Also, using the product for the first time should be very easy.

Getting references from existing customers is the best method for a startup to acquire more customers.  Along with references, cold calling is also needed to get more leads.

For startups founded by young entrepreneurs, age can be a concern in some domains, as some people give more credibility to age. For these kinds of startups, spending efforts to acquire additional credibility helps.   For example, you can enlist the services of an industry veteran.  Or use an existing customer base as a reference.  Customers listen to someone from their community.   For example, Scheme Central went through the secretary of the jewelry association and was able to get a huge community of jewelers sign up for their promotional event.

Create case studies. And put in metrics and data points in the case study that communicates the value very clearly.

A new product needs investment in marketing for awareness creation. Webinars help in thought leadership and credibility.  You should share best practices and industry trends in webinars.   In the last 10% time you can talk about your product.  However, the results may not be immediate.  Use technologies like webex, gotomeeting, gotowebinar.

Tradeshow presence helps in getting rid of the startup tag and establishes credibility. Use tradeshows also to educate about new things, establish thought leadership and engaging the community.  Tradeshows are also places where you can get time from people, who are otherwise too busy in their work to take time out for you.  Try to connect with and setup meetings with interested parties before the event, so you can get more mileage out of the event.

Hiring and Motivating Salespeople

Startups need passionate team members for sales.  In the early stages, professional sales people are not needed, but passion is more important. 

Sales culture and values are very important.  Different companies have different values, but it is important to articulate your culture and values so the new employees can identify and relate to the culture. For example, one aspect of the values could be that “We will not give any discounts”.   This can help in reducing the sales cycle since there is no negotiation phase. 

Build internal tools for sales tracking, conversions and product usage.  It might be worthwhile to have a dedicated engineer to build and maintain sales tools.

It is not very difficult to hire foot soldier sales in India for SME sales.  Some companies have hired sales people with 2 years’ experience for 25K INR per month. Naukri is a good place to hire junior sales people.

For a startup, it might be better to hire a little experienced folks instead of freshers.  In addition to training costs, freshers also have the urge to look out for a change after an year or two.  Attrition is higher among lesser experienced employees.

The key things to look while hiring a sales person are:

  1. Communication skills
  2. Sales ability. In the interview, ask him to sell his current product to you.
  3. Relevance. Right background.
  4. Attitude.

As you scale, investing in the right recruiter is very important as it is very important to hire good candidates.

Act quickly on mistakes.  If you find someone who is not right, let go immediately. Typically, 1 out of 2 sales is good fit.

Have a transparent incentive system.  And make it non-linear so the salesperson is incentivized to achieve more.  For example, if the salesperson gets 1 to 3 deals, the incentive is Rs X per deal. For the 4th through 7th deals, the incentive is 2X and for the 10+ deals, it is 3X.

While it is important to track results, for salespeople tracking effort is also important. It helps in improving morale. For example, effort metrics are things such as number of meetings per week, 4 demos a day etc. 

Early Product Management

The product requirements should be driven by the needs of the customer. Aneesh also mentioned that they built the product after talking to retailers (their target customer segment).  The first five customers gave them the requirements and then they build the product. 

Till you get 100 or so customers (the number might be different for your product), keep making modifications so you have a good minimum viable product (MVP).

Free trials are a great way to get customers.  The trial period can be 15 days, 1 month or 3 months or whatever is appropriate in your context.  This depends on how soon the customer can see the value of the product.  If the value is immediate, then a 15 day trial should be good enough.

If a customer asks for feature X that is not currently available, ask them to pay for it, or tell them to buy the existing product and give them a commitment on when the new feature will be ready.  In India, people don’t want to say no directly and hence may come up with different missing features to indirectly say no.  Ask other customers if they want the same feature X. If 20% customers need it, then build it. 

Build metrics in your product so you can measure which features are being used by customers.  This can also help in manage the funnel.  For example, you can take these actions based on usage during the trial period.

  1. Who is using it?  Convert these people to paying customers.
  2. Who is not using it? Extend trial.
  3. Who is not using at all? Train them.

SME mindset

Pay particular attention to the most common mindset in your target segment.   For example, some SMEs have budget constraints. So being flexible in your pricing might be needed. In large enterprises, things run on budgets, so we need to be sensitive to that too. In India, price negotiation and discounts are normal expectations. You will have to decide how you want to handle this.

If the product delivers value, people will pay for it.  It is not true that the SME segment in India does not want to spend money.

In the Indian B2B SME context, the customer wants to buy from a person. In the B2B SME context, another important factor is local language communication. Not everyone is English savvy or comfortable doing business in English. So they hired local language speaking sales people.

“Me too” syndrome is prevalent in SME segment in India. They are well connected with each other.  You can leverage the “me too” syndrome by using names of your customers competition who is using your product.

SME sales can take a few weeks to a few months, depending on the kind of product and the kind of market.  If there are multiple decision makers, sales complexity increases and it can take a minimum of 3 months.

In India, customers don’t say no directly.  They might give a variety of reasons to not make the commitment and you might mistake that for genuine interest in the product. Get them to say “Yes” or “No”.  Any concrete answer is a good answer.

Channel Partners

Get at least 10 customers yourself so you have established product-market fit.  And then go talk to channel partners.  Channels will not solve the sales problem for you. You solve it first and that will get the channel excited. They can help you replicate, but not create the sales model.

Channels want to make money. They don’t want to invest in your product.  They want to take up already proven products.  You might want to put your sales guy in the channel partner’s office and make sure channel partner is making money.  Channels will take time and effort.

SAAS products are not exciting for channels as the ticket size is small and they don’t have much scope for making money from implementation and upgrade services.  In SAAS, you need to give higher commissions.  You can use channels to increase awareness.  For SAAS, marketing is more important than channel partners.

For straight forward low touch products, you deal with distributors and resellers (e.g. anti-virus software). Channel partners are typically used for high touch, high involvement kind of solutions where the partner brings in some perceived value addition.  

Thoughts on Pricing

Here are some rules of thumb to arrive at product pricing:

  1. What is the customer currently paying to solve the problem? For example, is it a person whose salary is the cost? Or it is on-premise software that you are replacing with a SAAS solution? Your product pricing has to be less than what the customer is currently paying.
  2. Your cost of customer acquisition should be less than the annual revenue from the customer.  Otherwise, it might not be a sustainable business. Cost of customer acquisition is roughly equal to total salary of sales people + some % markup for additional costs associated with an employee divided by the total number of customers acquired.  The formula might vary based on your cost model (e.g. advertisements), but you need to figure out a simple handy customer acquisition cost calculator even if it is not accurate.
  3. Life time value of the customer should be at least 3 time annual revenue from the customer (=1/churn).

Some Tips and Reference Material mentioned in the round table 

  1. 6 Cs of SAAS metrics and other resources, available at www.bvp.com.
  2. A book titled “Solution Selling”.
  3. Some of the participants found yesware.com  a very good tool for salespeople.  It tells interesting things about whether a prospect opened a mail, forwarded it etc.
  4. Slides used by Shashank at the round table are here.
  5.  A very good blog for startup sales is http://www.bothsidesofthetable.com/2013/06/13/why-your-startup-needs-a-sales-methodology/ (PUCCKA model).

Tweetable Tweets

Getting the first customer takes the longest time. Customer acquisition time drops exponentially. Tweet this.

To get initial customers, do whatever it takes.  Keep chasing the right guys. Tweet this.

Experiment with different models in your specific context to figure out what will work. Tweet this.

The customer needs to have instant gratification when he tries the product for the first time.Tweet this.

Getting references from existing customers is the best method for a startup to acquire more customers. Tweet this.

Have a nonlinear and transparent incentive plan to motivate salespeople to achieve more. Tweet this.

Build metrics in your product so you can measure which features are being used by customers.Tweet this.

In India, customers don’t say no directly. Get them to say YES or NO. Tweet this.

Get at least 10 customers yourself. And then go talk to channel partners.Tweet this.  

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Insights from the Sales Playbook RoundTable Led by Ambarish, Knowlarity in Gurgaon

The second Sales Playbook RoundTable in Delhi-NCR was held at EKO office in Gurgaon, led by Ambarish Gupta– CEO/Founder, Knowlarity Communications. About 10 companies attended the meet such as EKO, Easework, Busy, Yippster, Conixevus and few more. The format was quite engaging and action oriented as participants were asked to come with their own set of sales challenges for the RT. The session started with a brief introduction and the specific challenges participants were facing.  There was a good degree of overlap among sales challenges of different organizations. The common theme emerging out of the challenges can be divided into three categories – Profit margin, Velocity of Sales & Scaling up. I’m listing down few of the actionable learning discussed

Improving Profit margin:- 

There was unanimous agreement over the core purpose of business among participants i.e to make profit which is a very elementary mathematical equation i.e difference between revenue from a unit customer & cost of serving a unit customer. Even if somebody is making revenue, he may choose to leave a particular customer if cost of serving customer is more than revenue. Exceptions are always there if the unprofitable customer is a source of bringing other profitable customers. Organizations should have real time view of profitability of different customer segments and may focus on segments with maximum profitability. While formulating any pricing strategy, the above mentioned formula should be kept in mind.

  1. The most important point in improving profitability is to understand the sustainable value coming out from the different customer segments & know associated risks. For example- startups as a major customer base are not good for companies because most of them die in a year so average cost of acquisition & serving is always going to be more than the average revenue for these customers. Similarly, up gradation to the existing customer may enhance profit margin significantly.
  2. Ask the customers to pay for the product you are providing, you will be getting right kind of feedback about product & business model, if majority is not willing to pay, it’s a red flag and one may need to modify the business model & product
  3. The pricing model should be taking care of mind set of customers so if the target customers are not in a position to shell out big amount of money, the pay as you go model may be applied with known risk that churning of customers is going to be high risk for the company.
  4. Payment term is also quite important, For example – Even in SaaS model once can ask for yearly payment rather than collecting on monthly basis. It has got several advantages-a) Advance cash flow b) reduced tension & effort of collecting money c) you have got a time in which you can make customers use the product and take benefit out of product.
  5. Make customers’ use the product so that they can feel the business benefit. A happy customer’s life time value is quite high for the company. The companies need to make as many happy customers as possible as a brand ambassador so after getting word of mouth publicity /referrals the cost of acquiring customers reduces significantly resulting in better profit margin for the company in long run.

Enhancing Velocity of Sales:-

A lot of participants expressed their concern about increased sales cycle and discussed the ways to reduce the cycle time & find a right process for reaching out to prospects.

  1. Network is very important in finding first few customers; it was observed that most of the companies got first few clients from personal network which resulted in an early traction for products.  So build a network of mutually beneficial relationship much before you try to reap the benefits.
  2. For reducing the time cycle, team should focus on finding the person in the target companies who is feeling the maximum pain for the problems you are going to solve and identify the decision maker such as CEO/CMO.
  3. For finding the relevant personal details such as mobile no. /email id internal to an organization, various tactics may be employed such as finding details from LinkedIn & Naukri profile, calling the board member as a journalist for interview etc.
  4. It is always advisable for going through a referral route if available so that the prospects would be in a frame of mind to hear. Moreover, while interacting on phone for the first time, you have just first 30 seconds to impress, be precise to what you are going to deliver in terms of benefits not about details of products. You will be getting enough time and a meeting with all the key executives if you can hold call for first 30 seconds.  The benefits should be clearly leading to either increasing the revenue or reducing the cost in direct or indirect ways such as, “I will help you in making additional money from existing customers” or “I will reduce the cost of serving to your existing customers”.
  5. If your product is new in market, one needs to identify the early adopters who are willing to take chances for launching the product with assessment of the probable competition, barrier to entry, market potential & preferred business/ revenue model in different markets.
  6. If the product is a replacement of the existing product then value from the replacement product should be of at least 10x more value than that of the existing product. The product companies need to understand & answer the key questions- why people should be replacing existing system/products? The mindset of a customer is always going to maximize the value per unit cost. One needs to find a solution of this puzzle for individual prospects before reaching them so one needs to concentrate on understanding the pain points with existing product and how to help prospects with those pain points while still providing the others as usual benefits to the customers.
  7. Both tangible and intangible value should be taken into consideration while evaluating overall value to the customer. One needs to be very careful if you are changing the path of doing business as usual for the prospects as there would be a degree of difficulty in doing something new for the customers. This is going to create negative value to the prospects.
  8. Keep customers / prospects engaged in a personalized way such as sending some information that may or may not be relevant to the product but may help prospect. Always keep a updated social profiling of the prospects from Facebook, Twitter and LinkedIn and find an excuse to follow up such as Congratulations for getting award etc. One need to understand that we are dealing with human beings not machines so clubbing of trust and emotions is extremely important to reduce sales cycle.
  9. The first point of interaction with customer is what you are going to provide. Talk to the customers in a language they can understand rather than focusing on product and features, it comes later in answering to the question how you are going to provide. For example- Our product will reduce the serving cost per customer in call center from 50 paisa to 10 paisa or our product is going to help in your business conversion by x% that is going to increase your revenue by y%.
  10. Even from the same target customer segment, different prospects are at the different stage of the sales cycle so marketing pitch should be in line with different stages in a sales cycle i.e Awareness – attract – Engage- Convert – Happy customer – Referral / word of mouth – new customers and so on.

Scaling up:-

  1. Product companies should connect to prospects to understand the pain points of the customers rather than building a perfect product with no market requirements. They should start talking with customers even if the product is not ready to receive valuable feedback.
  2. Time to make entry in the market is quite important as  it decides the opportunity windows of a company to tap maximum benefits in minimum time & effort
  3. The system & processes during the early stage of startup should be highly flexible. After a certain period the same flexible system should be converted into process driven system to run the show. Therefore, one should evaluate & understand the system / processes / resource that are needed to drive the expected sales after scaling up & manage the changes from the existing level to the future level smoothly.
  4. One needs to find the sales model that is highly effective and scalable after market test and multiple iterations. Once you have found the right kind of value proposition and target set of customers for that value proposition with effective sales channels, you can scale up same model exponentially.
  5. The choice of domestic vs. international market is quite tricky. In developing market competition is less, quality expectation is less, market potential is high but customers are not willing to pay so ticket size is small. One of the biggest obstacles is the mind-set of customers in developing market. However in developed market ticket size is high, less hurdles with mind-set but competition is intense with very high expectations on front of quality. So considering these two facts one can take domestic market as a test market for testing and enhancing the product. Once it reaches the level of international standard, one can make international markets as the primary source of revenue. Jumping to international market without having a tested product may block all the future chances in that market forever.
  6. The selection of appropriate sales channel may be explored after trying established model such as telesales, channel, face to face & enterprise sales. Only after market testing, one can determine the right way to get more profitable customer at lower costs.
  7. The product companies need to create a sustainable source of inbound leads rather than outbound leads to improve efficiency of the sales system. Sales people should not be engage with every potential customer, they should be getting filtered list of potential customer for engaging & converting
  8. Another basic question is how customers are going to discover you? One needs to see the whole picture from the lens of customers for scaling up. Depending upon the computer literacy of the targeted customer offline or online or combination of marketing tactics may be deployed. For example- if customers are searching heavily over internet for the keywords associated with the products- Google organic and paid search could be good idea to hook the prospects. However if the search volume is less then display tactics may be needed to create the awareness among targets & later for hooking.
  9. The product companies need to understand the mindset of channel partners and dynamics that is happening in the channel partner industry. As profitability is going down, existing good partners may be looking out for new streams of revenue. So, they would be happy to work on a more profitable venture for taking a new product to the market. Apart from that capability, influence into target market and willingness to sell must be evaluated for potential partners.
  10. The big channel partner may not be a good partner unless the new product can create immediate good streams of revenue for them, so small partners would a preferred set of partners because they would be devoting dedicated time even for small revenue however the impact on company’s revenue per partner would be limited so number of such working partners come into picture for getting maximum revenue in a given time.

These insights were the result of the sales round table meet. The round table meet ends with a promise of meeting again for discussing and sharing experience again in coming month. Thanks to  iSPIRT ProductNation in being instrumental for building core competence in product organizations.

Guest Post by Manoj Kumar, a volunteer for ProductNation

Posted on

So you want to enter the US market

As many of you know, Avinash Raghava is a persuasive individual. So when he approached me first to write for Product Nation, after some hemming and hawing, I agreed. On a recent call, he told me that nice though my writings have been so far, he was hoping I could help our readers with specific issues related to entering the US market.  He is absolutely right and I will start looking to him for guidance on what topics might be of interest to our readers. One of the first things we agreed, I’d write about is how companies should think about entering the US market. So here goes. 

I have been associated with the Indian IT business since 1989 and so I have seen the peaks and the troughs over the years. The IT services business and its offshoots into KPO and BPO have thrived over the years. And even now, if you are an entrepreneur and have a captive client, you can make a 20% return on your top line with some work and a tailwind. It is the product or IP related business that is a different animal.

I was fortunate enough to have the opportunity to understand the product business during my rather long stint with i-flex (now Oracle Financial Services). I had patient bosses, excellent coaches and the opportunity to understand three very different geographies – North America, Asia Pacific and Latin America. There are a few lessons I learned along the way and I am happy to share them with you. This is not an exhaustive post on the subject by any means, just some thoughts. Here is the first set of lessons learned:

Lesson #1 – Stay away if you can, it may not be worth it – Entering the US market (or any foreign market for that matter) is a big, messy, expensive proposition, if you think you will make money from day one, think again. It will take time and commitment to make it work. For example, in my previous life, it took investment from our company in a full blown sales and marketing organization, PR, analyst coverage, partners etc for close to over two years before we saw anything resembling success in the US. Latin America was a different story, the company did it half heartedly and did not invest in what was needed. Needless to say, we weren’t too successful in that geography. Entering a foreign market is not for the faint-hearted, it will take time and resources AND there is no guarantee of success.

Lesson #2 – Product business is not like the services business – Given the extensive experience that Indian companies have in the outsourcing world, it is no surprise that many startups are founded by folks with a services background. And since they have a services background they bring some of that mindset to the table. The challenge is that the product business is different in just about every way that matters to the services business. The approach to selling, the pitch, the implementation, support, partnerships, the list goes on and on. Unless the management is willing to change its outlook, this will cause you problems.

Lesson #3 – Awards are great, case studies are much better – I often come across promising companies in India that have been recognized for the excellent work they are doing. While awards are great, they are not enough to mitigate buyers’ concerns around vendor risk. Remember, you are an unknown quantity for the buyer, and as the old saying goes – “Nobody gets fired for buying from IBM”.  That is where case studies come in handy. If you have a multinational client, try and enter a foreign market through one of their subsidiaries. I know this works because I have used this strategy before. If you don’t, perhaps you can build case studies around a business reason that will resonate with similar companies in overseas markets.

Lesson #4 –  Get your story straight – One of the biggest challenges I see for Indian companies is around messaging. Most startups are founded by techies.  As a result, the messaging is very tech heavy.  I suspect the current crop of buyers is suffering from an overdose of “Cloud”, “Enablement”, “Web2.0”,  “Enterprise-class”, “Multi-Tier” and “Mobility”. The problem is that when everybody ends up sounding exactly alike, nobody stands out, and the message doesn’t address the problem they are trying to solve directly. A good message should be free of geek speak (to the extent possible) and to the point. Always remember that to the buyer you are relatively unknown, highly risky and you have a short time to grab the buyer’s attention. If you can’t even get them to understand what you do, well, good luck with closing the deal. This is hard and requires skill. There are people (like me) who can help you with this but it is critical that you do it.

Lesson #5 – Have a plan but be willing to change – When you are trying to get a foothold in new market, it is very tempting to get opportunistic. You leverage your contacts and get that first critical deal. That is how you get into a market, but what you do after that depends on whether you have thought about it or not. I encourage my clients to think about going after prospects that make sense in the larger scheme of things. In a significant departure from the services way of thinking, product companies can’t be everything to everyone. You have to think about what you are about and what business problem you are tackling. Based on that, you form a hypothesis and a plan. Then you test it out in the market. If it works, you are golden, if not, you tweak it. The point is, you can’t go after anything that moves: you don’t have the resources for it plus it WILL dilute your brand. Get opportunistic within your framework and you will already be ahead.

These are just some initial thoughts. Remember that like anything else in business, there are no guarantees. What you want to do is to increase the probability of success. Do companies succeed without the points I have listed above? Sometimes. Do companies fail even after they do everything above? Sure.

I can’t promise you success if you follow my advice but you’d be ill advised to ignore it. If you have thoughts, experiences or comments, please do share.