‘Customers buy your product does not mean they will use it!’ – Kishore Mandyam, Founder and CEO, PK4 Technologies

ProductNation interviewed Kishore Mandyam, Founder and CEO of PK4 Technologies, the company that owns the Impel CRM offerings. During this interview, Kishore shares some of his experiences in creating a product suited for Indian customers, and discusses his learning from dealing with customers and technological developments. Read on…

What was the motivation to start Impel?

There were a couple of factors that came together in influencing creation of Impel. During 2006-07 timeline, after having successful career and managing different aspects of business around the world, I was looking at what could be the next big challenge to take on. Frequent travels to different parts of the globe also had started to become taxing. The domestic market was showing encouraging signs of robust demand for product based solutions. All these factors influenced in we taking the decision to set up Impel, a product company based out of India.

Impel Home page screen shot

What were your experiences during the initial years of operation and what was the learning? 

As we setup Impel, we converged on the CRM area as our focus to provide solutions, since we understood that many customers in the target segment that we were aiming were not very organized in dealing with Sales leads and customer centric operations. We invested our initial 18 months to build the product and made it available for customers by 2009. Given our previous corporate experience, we initially started leveraging the state of the art marketing and selling techniques and were able to land about 120 customers during the first year of operations.

However, the biggest learning came next year, when we could not retain most of these customers. When we analyzed what went wrong, we discovered that our method of signing in customers using web based sales ensured that customers bought the product – but just purchasing the product did not mean that they would use it. It turned out that most customers had not tried the various features and capabilities of our product offering and hence were skeptical to renew the relationship with us for the next year.

As an organization, how did you respond to this learning and what new measures did you take to overcome these limitations? 

We all gathered back at the drawing board, analyzed the developments and worked on how we could enhance our offering to ensure more usage and hence more engagement from the customers. We further segmented our target customer base, identified the key sub-segments that showed more promise and started working closely with leads from that bucket. During 2011 and 2012 we got very good traction from lifestyle businesses and rural businesses that focused on selling and marketing seeds, solar lamps, pesticides, FMCG and so on. The targeted and focused engagement with this sub-segment yielded very good results for us, and by 2013, we had about 120 to 130 stable customers.

During the same year, based on our experiences thus far, we shifted our focus to engage with mid size companies and fast growing small companies. This shift in focus helped us to increase our profitability and ensured diversification into another segment of customers.

What are your observations on the Indian market based on your dealing with them over these years?

The Indian small and medium companies have many challenges for which they desire solutions. However, they currently are unable to articulate their problems and explain the desired solutions to the vendors who approach them. On the other end, if any vendor is able to identify these gaps in their operations, clearly articulate the pain points and propose a technology based solution that adds value / solves their pain points, the customers will lap it up.

In our own case, we started off with a CRM offering – we wanted to be the Salesforce for India. However, as we listened to our customers, we discovered that they were buying our software to solve a variety of problems around the CRM domain of which we had no initial knowledge of. This interaction made us tweak our offerings based on their feedback.

Secondly, the perception of Indian customers about cloud has drastically changed since the past 5 years. Customers now accept cloud as an alternative and secure medium of deployment. They realize that it provides them certain benefits than the traditional modes of deployment. This development, combined with the rapid acceptance of mobile and smart phones in the Indian ecosystem is creating a market of significant size that are willing to look at mobile and cloud based solutions to solve their challenges.

What are some of the areas which you wish you could have executed better on?

Being a bootstrapped startup, one needs to always prioritize on the areas that need the focus and attention to attain growth. Having said that, as I reflect back, there are a few things that I think we could have executed better. One of them is about the trial process we have to let our prospective customers try out our offerings. We notice that despite our best efforts, we were not able to better engage our prospects in ensuring their conversion.

While the above one was on pre-sales, I also think we needed to do one thing better – on providing better documentation of our product, on the post-sales and support side. I notice that a few startups in India have been very good in this regard – and they have good customer retention and lesser support costs on account of this. I think that if we can simplify the usage of the product to the end user, and support the end user with description of how to use different features of the product; this combination will help in long term sustainability for our company.

Interesting insights! In closing, what are the three things that you would like to share with your fellow entrepreneurs who are targeting the Indian market?

I think we are at very interesting times as regards to targeting the Indian customers with our technology solutions. The first thing I want to let other entrepreneurs know is that the average Indian manager is much more willing to engage and evaluate your technology offerings. This is a very encouraging sign for all entrepreneurs. Secondly, mobility as a technology development is a big disruptive force, especially in the emerging markets. Hence, plan to leverage the power of mobility in all your solutions and that will surely delight your customers. Lastly, Indian customers take really long cycles to decide to buy. Continuously engage with them through marketing and other touch points, even when you may have ruled out immediate purchase in this quarter. If the customer is engaged, he will simply come back to you when he decides to buy and will close the deal in a day!

Indian SMB market at 48.8 million units growing at a CAGR of 4.53%

Our recently launched study titled, ‘Indian SMB Sector 2013’ captures some interesting facts and figures on the burgeoning SMB segment in India. The study reveals that with a total base of 48.8 million SMBs, India is expected to emerge as the largest SMB country globally.

The SMB sector in India is growing at an exceptional rate and has the potential to be one of the primary drivers of the Indian economy. Today, 1.5 million SMBs export their products or services outside India which is a sign of the sector’s rapid evolution. The sector is expected to be the largest employment generator in the country and today represents the true entrepreneurial spirit of the Indian business community.

The study also highlights that the Indian SMB space today is largely dominated by micro scale businesses which account for 95% of the SMB landscape. This is followed by small scale businesses contributing 4.8%, and the rest 0.2% by medium scale businesses. Out of the 48.8 million SMBs around 55% are located in urban areas whereas rural regions account for the rest 45 %.

SMBs in India have gained strategic importance from both corporations and the government. The recently announced tax incentive for growing SMBs in the Union Budget is one such example. Such initiatives have helped SMBs enhance their competitiveness in the global markets. Globalization in trade is further driving SMBs to improve their efficiency of conducting business.

The study also states that around 82% of all SMBs are situated in 10 states in India. These 10 states, also account for 2/3rd of the mobile and internet subscribers in the country. Additionally, Manufacturing is the single largest vertical at pan India level followed by Repairs & Maintenance, and Services vertical. Greater employee mobility, increased competition and expansion in terms of office locations have further pushed SMBs in India to generate more employment. The study indicates that the Indian SMB sector provides employment to approx. 81.16 million people in India, growing at a CAGR of 5.29%, while the fixed investment has been consistently increasing over the years at 11.48%.

The following are some of the key findings of the study:

  • India is a hub of 48.8 million SMBs providing employment to 81.16 million individuals
  • Micro enterprises account for 95% of total SMBs, small & medium put together hold the remaining 5% share
  • 1.5 million Indian SMBs export their products or services globally
  • 55% of SMBs are located out of urban cities whereas 45% are situated in rural areas

NowFloats – Getting small businesses online in 4 SMSes and 13 minutes!

NowFloats – Getting small businesses online in 4 SMSes and 13 minutes! 

I love clear mission statements, and NowFloats couldn’t be clearer:

9.6 million small and medium businesses need a website. Only 0.6 million have one. That’s 9 million tasks on our desk (and that’s just in India!)

I recently got a chance to catch up with Ronak and Jasminder (Jas), 2 of the cofounders of this exciting company called NowFloats that aims to bring SMBs online, without making them sweat over it (other 2 co-founders are Nitin Jain and Neeraj Sabharwal) . NowFloats is a team of 20 (4 founders, 4 tech, others in sales and support), based out of Hyderabad, though their customers are spread all over India. Overall, I was very excited by what I listened and saw, I sense that NowFloat holds immense possibilities for small businesses and has all the right ingredients to be successful in its mission.

The problem for small businesses

Given increasing reliance of users on search, it is becoming important for offline small businesses to have an online presence. An online presence needs to have discoverability (users know that you exist), engagement (users interact with you and like you), and conversion (users visit your offline business). However, when creating such an online presence, a small business has to grapple with 3 problems:

  1. Creating a website takes too much time and effort – even for tech-savvy type, which a small business owner is not.
  2. Updates require engaging website developer again – too much effort and dependency
  3. Online marketing is hard and expensive, and requires digital marketing expertise, not something a small business owner has

Standard option currently for a small business is to do nothing about online presence; very few businesses hire someone to create, maintain and market their site which is very expensive option without clear ROI.

NowFloats solves this problem for small business in an easy-to-use manner at an extremely affordable pricing.

NowFloats Promise

NowFloats promises to allow a business owner to create a website in 4 messages and in less than 13 minutes – send the name and address of your business, website name you desire, and your website is ready to use! If you wish to update the site (messages on message board or updating any of the original details you provided while creating the site), it is as simple as sending another message.

It may look like a simple and easy website to create, but it packs a lot of punch:

  1. Site and every message are geo-tagged, which means local searches will show up your website and deep-link to your message.
  2. Your website and each message is search engine optimized
  3. Each update is a page so it can be shared by your customers on social networks, which again has endless social, search and business possibilities.
  4. Visitors can subscribe to get all subsequent updates, or leave message for you to follow up with them 

NowFloats – The Product

Design: NowFloats is a very well-designed product. Their company website as well as the customer sites are beautiful in their minimalist and pleasing design.

Technology: They have a scalable architecture, built using Microsoft technologies. They have 4 patents filed and 2-3 are on the way. They offer subdomains under nowfloats.com in addition to allowing customers to use their own domain names if they wish – like Body Granite Gym and The Courtyard & Cafe Courtyard do.

Analytics: They care deeply about analytics that customers get about their online visitors. Businesses get weekly information about how their site is doing (# of page views in a week). On their product roadmap, they have features to provide details like which messages got max view, keywords which generated maximum views, etc., goal being to show what type of content is attracting maximum traffic.

Pricing: Pricing Plans (5K to 12.5K a year) are very competitive, given that even hosting a site costs 3-5K a year.  NowFloats is still reviewing pricing strategies based on market feedback so expect this to change soon.

Test-driving NowFloats

As I took the service for test-drive, here are my impressions:

  1. It is very easy to set this up indeed. I was up and running with http://ilovebooks.nowfloats.com/ in less than 10 minutes.
  2. As soon as the site was created, I got a call from their customer service. They wanted to confirm my identity and walk me through the next steps, including collecting payments.
  3. I realized I picked a wrong name for my business, so I wanted to change. A call to customer support informed me that they will have to do the change for me, though an app is coming which will allow self-service. Later I found it was only partially true, the name (and many other details of the business) can be updated through SMS messages even now. I promptly used the service.
  4. I wanted to update the site using my laptop, but changes can only be done using SMS, upcoming app, or customer support. I find this a little annoying.
  5. I tried to get creative and sent an html fragment as an SMS message, which created a broken message on the site. Given that I can’t update it online; this requires me to call customer support. Later I was told how to do this, and also given the current target audience, this is not an often used feature.

Customer Acquisition

Clearly small businesses see value in NowFloats offering. In a short span, they have 1600+ customers live, including customers like Hazzel Ice Cream Cafe and Dr. Chandrika’s Kerala Ayurveda . I was fascinated by the variety of customers they have attracted, including my favorite restaurant in Hyderabad, a Nokia Priority franchisee, and even a personal branding site. These sites are discoverable (through geo-tagging, auto-generated tags and other SEO techniques, sites and messages come up in ahead in all search results) and drive engagement (users subscribe to the messages, businesses get notified when someone subscribes or shows an interest). Conversion (people visiting the business) is hard to track and NowFloats team is working on some solutions that will allow such tracking.

NowFloats has multiple approaches and channels to acquire customers:

  1. Geography: Started out with targeting Hyderabad businesses. Currently they are focused on Bangalore businesses. The goal is to have pan-India sales presence soon through partnerships and other means and continue to expand city by city.
  2. Catagory: One of the innovative ways they target a particular category is to target the franchise business owners of a particular brand. For example, they have brought many Nokia Priority franchisee owners online, same with Printo. Given the huge number of franchisees in India, this seems to be a winning sales strategy.
  3. Partnerships: They have a shop-in-a-shop model with Printo. Since Printo serves much of the same customer segment as NowFloats but with a complimentary service, this is a great move to gain customers.  They are exploring similar partnerships with complimentary service providers.

Couple of other things I would like them to focus on:

  1. Online Presence: I can’t discover NowFloats online. Google search for getting my business online didn’t say anything about them in first 3-4 pages. I think they need to make their discoverability better as they go forward.
  2. Social: Small businesses thrive on communities and loyal customers who like the service they get. One of the best ways to reach small businesses is to tap into this community and loyal customer base, through social or other platforms. I would love to introduce NowFloats to the small shops I visit near me, but there is no good way for me to do so.

Competition and Differentiation

When I researched around, surprisingly, there aren’t many cost effective ways for small businesses to create online presence. India Get Online program from Google aims to get Indian businesses online and are a viable option for a small business. However, I think NowFloats offers a more targeted and sustainable product, that can potentially complement the Google offering.

Google’s strategy is to get a basic site up for you so that you are visible in local searches, to stay visible. NowFloats focuses on getting a site for you and market it online for you, thus helping you stay focused on what you do best – run your business.

What Future holds for NowFloats

I see NowFloats extending itself in 3 areas:

  1. Richer Eco-system: NowFloats plays in the local search space through their mobile app. A successful ‘NowFloats for business’ means rich data about local businesses available for their app to make use of. Controlling the supply of rich data from small, local businesses has lots of grand possibilities.
  2. Richer Revenue Models: Currently, there revenue is subscription-based, and it may be hard to show how an investment of 12500/- per year translates into increased traffic (and revenue) in their offline business. Their goal is to evolve newer revenue models that can directly tie NowFloats revenue with SMBs revenue, thereby creating a symbiotic and sticky relationships.
  3. Richer engagement with businesses – Businesses need many services as soon as they realize the potential of an online presence. Selling online, driving deals, building software solutions for their businesses, etc. all can be offered once the business is on-boarded.

Power of an idea lies in simplicity and pervasiveness. After I talked to NowFloats team, I have been observing small shops around me in a new light. If the great little corner shop selling briefs could be easily discoverable, If my favorite restaurant in Greater Noida could be more engaging, if the grocery shop in my apartment complex had an easier way to let me know of his deals, I am sure these businesses would benefit immensely. And it is so simple for them to do so now – by using NowFloats. Nowfloats is a very powerful idea whose time has come – may all the power be with small businesses and NowFloats!

Bharat Goenka(Tally Solutions) talks to us about the company’s ‘stubborn’ decision to stay focussed on products

Bharat Goenka is the architect of what is arguably India’s most successful business solution — Tally.  Co-Founder and Managing Director of Tally Solutions, Mr. Goenka developed the famous accounting solution under the guidance of his father, the late Sri S S Goenka. Today, the product is the de facto accounting solution for many SMEs and Mr. Goenka serves as an inspiration for many aspiring software product entrepreneurs. In an interview with pn.ispirt.in, Mr. Goenka talks to us about the company’s ‘stubborn’ decision to stay focussed on products, the non-DIY nature of the Indian SME and the necessity for product companies to stay focussed on the product mentality.

Tally is one of India’s most successful product stories, and it definitely appears to have ticked all the right product story boxes: responded to a genuine market need, stayed focused and evolved with the needs of users. Given the benefit of 20:20 hindsight, would you have done anything differently?

The reality is that one doesn’t really learn from the past. We continue to do audacious things, we continue to get some success out of that as well as failure. Over our 25 year history, this has happened multiple times. Multiple times, we have taken a decision and it has gone wrong — but if the circumstance arose again would I take the same decision? In all likelihood, yes — I would have no reason to expect success, but I’d still have the optimism and think just because it went wrong in the past doesn’t mean it also has to go wrong this time. So although I would say it’s unlikely that one would have really done anything different, I can give you an example of a decision not working out for us. In 2004-2005, we changed the price of the software from 22,000 to 4,950 thinking that we would be able to sell software as a commodity. The reality was that for that time, it was difficult to sell software as a commodity in India in the B2B space. And so we suffered, massively. That proved our belief that we couldn’t sell software as a commodity, but it didn’t stop us from trying. We lost almost 50 crores in those one and half – two years, so I would say our single biggest mistake was that.

Tally – or rather Peutronics — was founded in 1986 at a time when much of the Indian software industry’s focus was on services. The decision to remain a product company when the tide seemed to be going the other way couldn’t have been easy – why did you make this decision?

Actually when we started off, virtually every company had a product. Whether it was TCS, Wipro or Mastek — everyone had a business product.  The shift to services took place in the mid-90s, particularly towards the edge of the Y2K environment. We were one of the few stubborn companies who believed that while there was a lot of money to be made in services, we would never be able to address a lot of customers. So the mandate with which my father and I started the company in 1986 was that we were going to change the way millions of people do their business. We were clear that by moving to services, we would never be able to achieve the objective.  We were unclear how long it would take us to get to a million — 25 years later, we are still trying to reach even the  1 million mark. But in 1986 we were clear that we want to be able to touch millions of customers. Therefore we remained focussed on our product line.

So what was that inspiring moment for you? Did you wake up one morning and decide that this was what what you wanted to do — to change the way these millions of customer did their business, or was it a gradual evolution?

In the months before we got the product Tally out, one was into the product mindset but for developing systems related products like compilers and operating systems. So I was preparing myself to do those kind of products. At that time, my father was searching for a business product for our our own small-scale industry business. He examined multiple products, but couldn’t make sense of any of them. He very famously said: “When I’m buying a car I want to be a driver and not a mechanic.” Similarly, he was looking for a product that would help him run his business — not his computer! Every product that he was looking at required him to change the way he thought about his business.   So because I was interested in software, he said these guys can’t do anything can you do something? So I was trying to solve his problem. After six months of development, I would say that it was his inspiration and thinking that formed the idea and belief that the product should be something that the country should also use.

The belief is that Indian SME’s need to be “sold to” – the job that’s conventionally handled by IT resellers who are critical to Tally’s business model. What are your thoughts on the changes that Cloud technology might bring to this scenario, with the whole “self-service” angle coming into play?

India is not a DIY country, and this is unlikely to change in the SME sector.

The way the market works in India is like this : SME’s expect people to come and sell something to them, even if it’s bottled water. You expect it to be delivered, and you expect to pay for it in a different way. In India, SME’s behave identical to the way enterprises behave abroad. Abroad, SME’s behave identical to consumers.  That’s why in most MNCs, you see that the SME and SO/HO market being handled by a common head while the enterprise head is separate, because they need to be sold to. In India — actually, in all developing markets — the SME and the enterprise behave similarly. In the west, the cost arbitrage of selling to a business is so high that the small business has no other option but to behave like a consumer. In developing markets, the cost arbitrage is low enough to send people to do the sales. And therefore, the buyer expects someone to come and do the sales. It is not about whether the visit is required because of the software complexity or the commercial complexity — it is an expected visit.

In your opinion, what are the three most common things that mislead or cause the downfall of Indian product companies today? What advice would you give them to overcome these?

I think it would boil down to one — which is to be clear about which business you’re in. Most people believe they are in the business of making money. Okay, even I am in the business of making money but my point is this: you can never be in the business of making money, you have to be in a business — money is an outcome of that. To explain it better, imagine that you are a software developer who wants to start your own product company. Capital costs are not very high — a single computer will cost about 20k, and assuming you develop the skill, it will some months to develop a software, and you’ll get your software out. You might put together an infrastructure, sales people etc and you’ll put up a monthly expenditure of about 25 – 30k. You start seeking customers — you  find me. You sell me your product for say 10k. In all likelihood, I bought your product because I like your software development style and perhaps your product solved two or three problems I had — but I still have twenty more. Now because I like your software development style, I’ll ask you to do more work for me. I might ask you to expand the product features, solve some HR problem that I have which this software doesn’t solve and I’m willing to pay you for it.

Your first ten customers will give you so much work, you won’t have time to go out and find your next 100. Or even if you find your next 100, they will give you so much work that you won’t be able to look for your next 1000.

So ultimately, you will still continue to successfully make money, but you will never be able to create a successful product company. This is the single trap that I see almost all product companies fall into today. They all make money, and that’s why they’re still in the business but they stop eyeing the fact that they were supposed to be in the product business and not the services business. Now imagine taking a strategic decision like this in the early days when there was no competition in the market– today you can take a decision to change over night. But in the early days, while we did do services for companies (if someone asked you to do something extra, you did do it) we refused to take a single penny for any services that we did. That forced us to focus on selling new licenses. Otherwise once you’re able to get money from services, there’s no requirement to sell new licenses!

In your opinion, what’s the reason behind Tally’s popularity? At the risk of being politically incorrect, is it because of its “accessibility” due to piracy? Or is it largely because it’s simple and user-friendly?

Pirated software doesn’t become popular — popular software gets pirated. We strongly believe in one thing: if my software is not valuable to you, your money is not valuable to me. So customers are able to see tangible value in our software after they’ve paid for it, and therefore they tell their friends to also buy our software. Word of mouth has been the principle pivot of popularity, and we’ve told people on a number of occasions that if our software has not been of value to them, we would return their money. Even after three years, people have returned and we have returned their money. In 25 years, this has happened nine times to us. But fundamentally, if our software doesn’t work for them, their money doesn’t work for us.

We see a lot of product start-ups coming up in both the enterprise and consumer space. What would be your advice to start-ups — where do you think they are lacking, and how should they go about correcting these issues?

I would ask them this: are they solving the problem for someone else vs are they solving the problem for themselves? If they are unable to be the most prolific users of their own solutions, they will find it difficult to put it elsewhere. It’s the problem of architects, right? The architect is building for you — so they build and go away, but you have to live in the mess. I think as a company we had the privilege of this insight from my father. My most famous depiction of his words was in this context: in the early days, I had asked me a question against a certain context and when I was trying to explain to him that it was very difficult to solve the problem in that manner in software, which was why it was done in a particular way he asked me “Are you writing programs to make the life of the programmer easier or the life of the user easier?”. The general tendency I have seen is that very few start-ups are willing to take the challenge of solving the complexity of the product themselves so that they give simplicity to the end-customer — and this is a fundamental requirement of the product.

The second problem that I find with product start-ups in the country is that most people design the software as if they are going to be present when the software is going to be used. It makes great sense for them to explain to someone how to use it, but if you want to be a software product company you have to design a product that can be used when you are not there. So, from a technical viewpoint fundamentally I would say that it is about being able to sit back and reflect upon these issues that impact your design. From a operational viewpoint, from day one you have to design as if you are not selling. It’s easy for you to design a product and for you to go sell it, because you’ll design your sales processes which are centered around your ability to sell. And this ability, because of your intimate knowledge of the product, will always be higher than someone else. So be able to design sales and service processes that are not operated by you will truly bring the product into the product category

NASSCOM Product Conclave 2012 Reflects the Arrival of a Vibrant Product Ecosystem in India

The kind of conversations that you heard around product companies are changing. From an ambitious “billion dollar companies” born out of India (the overarching goal of NASSCOM Product Conclave last year), the focus is shifting to the bold prediction of product software’s robust growth, in the coming decade and half, eliminating poverty. In his opening remarks, Sharad Sharma, NASSCOM Product Chair (who I hear across the board is an inspiration to the whole community of product guys) called product entrepreneurs by labels as aggressive as “arms merchants” and “disruptors.” He went on to make a bold prediction: “product industry will lift India out of poverty.” He sought to portray Cloud as instrumental in product space becoming an affordable, productive, and collaborative space that would transform public health centres and schools in India.

Reflecting the evolution of NPC, Som Mittal, President of NASSCOM, said that NPC is a great platform to compete and collaborate. He also revealed that NASSCOM is entering into an MoU with SIDBI to provide risk capital to small companies, which would include IP-led product companies. (SIDBI was provided a fund of Rs. 500 crores in the Union budget for investing in SMBs.) He saw angels, investors, and incubators becoming active in the product ecosystem. Mr. Mittal’s statement that CIOs were open to buying from startups should give product entrepreneurs a sweet ring in the ear.
M.R. Rangasami, co-host of NPC 2012, saw three phases of evolution of the product industry in India: mimicking US to get funding initially, growth of enterprise software in the next decade, followed mobile and Cloud computing causing a paradigm shift in this decade. He was optimistic that software products offered at low price points offered by product entrepreneurs (leveraging the Cloud) will be consumed by thousands of customers.
Naveen Tiwari’s Leap of Faith

In a sort of answer to the overarching question of a billion dollar business emerging from India (the same time around last year when Flipkart was rumoured to have obtained a billion dollar valuation), InMobi, a mobile advertising ecosystem player, has emerged as perhaps the biggest company to grow out of India in the last 5 years. Naveen Tiwari’s keynote should be remembered for something alien to product entrepreneurs in India: talking numbers that are in the million and billion range—a trillion ads providing $2 billion worth of economic transactions, reaching 80 million people across 165 countries. The mercurial growth of InMobi has been made possible by the “Think Big” approach of the team and not being complacent with the present status. The company is devising methods to grow five to ten times in the 5 years from now. Naveen Tiwari said that massive scale happens with huge risks and the InMobi team was willing to bet on it. Aiming big, going global, and hiring the best are the three mantras Naveen Tiwari proposed to build a similar company in India.

Ram Shriram’s Bet on Mobile and Tim Parsey’s REM
The man with the Midas touch could not touch down at Bangalore as personal commitment stayed him put in the United States. Ram Shriram of Sherpalo Ventures who delivered the keynote on video sought to paint a glorious future for mobile phone-based innovations going by the sheer number of them. (An exclusive coverage will be done on his address.)

As M. Rangsami announced the TED-like speech of Tim Parsey of Yahoo!, who has changed seven domains and as many companies, it brought a fresh whiff of outside air. Instead of thinking inside, this change of thinking by organizers to bring in someone with a different perspective seemed to have carried well. Tim Parsey gave an absorbing, exuberant keynote on design being important for products. Using the bicycle as an example of his REM framework, he translated the evolution of bicycle to products within the REM framework. Rational value, Emotional, and Meaningful are important components of the design, in Tim Parsey’s philosophy. A rational value in terms of performance and new capabilities, designing for feeling, classic minimalist, and ultraminimalist (appealing emotionally) styles, and being meaningful (aligning to values and evoking personal memories) make a product appealing to the customer. The design principles and design culture should be enticing for the employees as well as end customers for whom the product is aimed at, he emphasized.

So many of them, which one to go?—Indian SMB market too small
End of keynotes opened up to six parallel sessions and thankfully one was cancelled. The sheer excitement of peeping into several sessions would have satiated the delegate but wouldn’t have had a carry on their learning. Color codes in the Agenda clearly showed the prospective audience base for the sessions. If I would have made a point of covering them all, I would have left the readers disappointed with piecemeal quotes that wouldn’t serve purpose. I stayed on with one session per slot. In a curiosity to understand the Indian market, I walked in with a lot of hope of three wise men telling us how Indian market so big as an ocean could be tamed with a magic wand. In the end, despite “doom and gloom” sought to be avoided, Indian market despite millions of potential customers turns to be less attractive for a product entrepreneur if segments are suitably sliced. Pari Natarajan of Zinnov showed the microcluster of leather SMEs finally boiling down to 2000 users. Terming product business in India for SMBs non-VC fundable (implying lack of scale), Pari however said e-commerce is a robust segment. Naru Narayanan, investor, mentor, and former executive selling retail products across India, cautioned the lure of big numbers. He sought to convey that any big number showcased should be treated with caution and provided his guestimate method of arriving at a rational figure. Vijay Anand put the conversation in perspective by bringing down the glorious 900 million mobile users to an active 300 million (multiple SIMs being the discounting factor). Despite the promise of the billion plus, Indian market is yet to become technophilic. Technology touches a niche and not yet mainstream.

This led me to a conversation with Kishore Mandyam of PK4 Software, who led a panel on AWSME Survey, the Nielsen survey commissioned by NASSCOM to look into the SMB market in India. This is an awareness survey by NASSCOM to understand what ails the SMBs in terms of buying software. In over a 1000 SMBs surveyed, it was known that only 30% of SMB owners were approached by a software provider and for example in Kochi, 86% of SMBs were not approached. Out of them, only 9% know the term Cloud computing. To make SMBs adopt technology massively, NASSCOM mandated this survey to drive its Software Laga Do Yaar! Mission. The survey will be used to further enhance the market penetration of software by understanding pain points, influencers, and decision makers by a follow-up engagement perhaps by using case studies to influence buying decisions.

Pivoting is painful is what I got to understand in the panel discussion on pivoting. Naveen Tiwari, Ashish Kashyap of Ibibo, Rajat Agarwalla of RJ Softwares were engaged in a panel led by Shruthi Chella of Groupon. Instituting pivot as part of culture is next to impossible. Pivoting in a small company is easier whereas in a big company, it is first tested within a small group before massive adoption. Customer needs, market opportunities, and competitive advantage drive pivoting. Ashish called pivoting as “changing punctured tyre of a car in motion.”

As the afternoon set in and more sessions awaited, the delegates swarmed the lunch area exchanging contact details and engaged in conversations.

Contributed by K. Venkatesh, VirtualPaper for YourStory.in

A great product ends up creating its own market by typically disrupting an industry or creating a new one – Archit Gupta, ClearTax

Here’s an interesting story about a young entrepreneur who put his personal life ahead of cool, calculated business decisions and went on to create a very successful IT Products Business.

Going back in time – background

Archit graduated in Computer Science, from IIT Guwahati and a doctoral level programme in the same subject thereafter, from Wisconsin University. The inherent brilliance and appreciation of things technical, was always there. This story is about taking all this, harnessing it and shaping a model which has all the trappings of a sound product.

A chanced paper publication and presentation thereafter – on network storage and efficiency – earned him many laurels, the least among them being offered a job in a start up, the brainchild of an equally brilliant professor from Princeton. Archit became part of a Core Engineering Team, which positioned the company in its own niche space. A solid reputation built on strong execution capabilities, was what this team epitomised. He put in a two-and-a-half year stint, and later on the company was later taken over by another Fortune 500 Company, EMC. By this time, the spirit of entrepreneurship had germinated inside and was beginning to take shape.

It was in late 2010 that he was faced with a peculiar dilemma – whether to stay back in the Valley or return to India and start off on his own. Personal reasons outweighed business instincts, which necessitated a move back to India. By then, the decision of going the entrepreneur-way was already taken. It was now only about that – what, and when. Having a father, who was a partner in a large CA Firm, helped in sharpening Archit’s laser-like focus and identify addressable gaps in a market dominated by the Chartered Accountants.

The Idea

The existing products (filing of returns) in the Compliance Space (Taxation) weren’t very good and there was a huge potential to design a better product by introducing an Americanised approach to solving bandwidth issues – offer a cloud-based solution. The CA profession has often been cited to be traditional in its approach, and this product which was conceptualised, was doing just the opposite. Break the traditional way of thinking. It offered a platform based product, leveraging future technologies, like SaaS based models on cloud or even build mobile applications in the times to come by. These were the early days of Clear Tax – simple to use and largely influenced by a product called Turbo Tax, from US. A major game-changer was about to enter the market.

The Product – ClearTax

It is not just a rudimentary e-return filing software, but designed to also educate the user and help him / her make informed decisions. Today, the bulk of users are in the Consumer segment but a drive is on to gain larger share of the pie, in Enterprise space too. The company has tied up with Institute of Chartered Accountants of India (ICAI) and leveraging this to build strong networks in the user community. Initially there were teething problems of migrating from desktop based applications to a cloud-based one but surprisingly the adoption has been very quick. Presently, the penetration has been in the top 8 -10 cities in India, which means there is a huge potential for growth, in untapped markets.

An Excel sheet based tool provided by Income Tax Department has captured about 40% of the market share and the balance is fragmented, which is where ClearTax operates. In terms of usability and many other critical functionalities, ClearTax is way ahead of even the market leader. On-line filing has been made free for women, which in a way is giving back to the community.

The enterprise segment is what will bring in margins and needs to be penetrated with precision. Reaching out to SMBs is a daunting task. Considering their size and nature of operation, the focus of entrepreneurs is really running their day-to-day show. They are too busy in doing what is their core activity – trading or manufacturing. Not being tech-savvy either, puts an additional pressure on marketing such products which are Internet-driven. The earlier adopters of ClearTax were Chartered Accountants, who in turn promoted it aggressively within their own community. It was also recommended by CAs to the SMB business. Otherwise through traditional advertising route, it is a very costly proposition.

The Product Eco-System and what it takes to succeed

A good product is something which users want. Of course, not all user desires are desirable (say recreational drugs for instance), so when we talk about a good product, it has to be consistent with the founders’ value system.

For success in the market, there are other factors at play :

  • The size of the market has to be sufficiently large for the startup to be able to deploy sufficient engineering, sales and marketing resources, for its success. Software Products interestingly can attack large adjacent markets, so this is something a startup doesn’t necessarily have to worry about when they start creating a product.
  • A great product ends up creating its own market by typically disrupting an industry or creating a new one.
  • Marketing: There is a lot of noise in the market place. Users have to be convinced to invest time/money/effort into this new thing. This requires very good marketing.
  • A good product comes with incentives for its own growth in the marketplace.
  • Good Engineering: Less important in the beginning, but becomes very crucial as the product gains traction.

Incumbents and competitors have to be out-executed.

We signed off with Archit Gupta, Founder of ClearTax, a very successful IT Product in its domain. The spirit of entrepreneurship is oh-so-intoxicating. Entrepreneurs are essentially dreamers who have the ability to make others believe in their dreams.

Here’s wishing the team at ClearTax a great year ahead.