Selling Software Products in India

After 5 months of marketing a product, I realized how difficult is the proliferation of a new product in India. Now I understand why the Indian market is so stubborn. The companies that have succeeded have all had connections, engaged in cronyism or not sold in India.

I am not saying those entrepreneurs have not been visionary and masters at execution, but they I don't think that they had to break the Indian mindset.

Here is the list of the recent entrepreneurial successes of India:

1. Infosys / Wipro / other - They don't sell in India
2. Airtel - Political connections got them valuable licenses
3. Air Deccan - Captain Gopi's army / political connections were helpful

I really have to rack my brains to find out one new business that grew from India solely on the basis of what value it delivered and without some crutch. I must say FabIndia is one of those exceptions - But they too started by exporting to the West! Info Edge and Naukri.com is another exception.

For the kind of products that we sell, its not that people are lining up to find out ways to make their small businesses more efficient.

Part of the reason is historical and cultural.

More than 75% of small business in the Mumbai area are owned by Gujaratis and Marwaris (full disclosure: I am a Gujarati too). Traditionally they have prospered due to their ability to migrate and form strong trade links across regions. They are still of a traditional mindset where investment in status and lifestyle comes before investment in their business. When they do business, they do it with a trader mindset. Because a trader always negotiates and keeps variable margins, they expect software also to be a tradable item or service. Also a trader does not invest in anything but inventory at the most.

Businesses in the West usually prosper because they invest in technology and hence they understand the value of technology. In India its a different story. I never thought this would hit me so hard so late in my startup process.

So I have two options if I want to break-even faster:

1. Sell to the West

2. Massage egos of larger companies. Sell to the West

Lets see how this process goes!

How Do I Find Good Open Source Projects?

Recently someone recommended me the CMS Concrete5. I had never heard of this CMS, but whatever little I saw, I found it very exciting. Seemed so much better than Wordpress, Joomla or Drupal - all of which I have got my hands dirty with. So the question hit me. Why did I not come acress this CMS before? This means that there could be many more interesting projects out there which I do not know about.

This got me thinking about what is my source of information? My immediate friends are not into exploring new stuff so they are out. Paid publishing sources like news sites are all sold to the companies with their journalists getting ego massages by paid PR teams. So they are out too. Many blogs / discussion boards are a lot freer but cater to niche audiences with niche tastes. For example, NewsYC caters to startups. "Experts" to have their own biases are and usually oriented towards the elite companies / VC funds.
 So how does a regular guy get to know about a good Open Source project? I think the viral word-of-mouth loop just got a lot more important. Large companies with an army of content writers are blasting the airwaves / cyberspace, so to speak and there is no place to broadcast your project. If you can spread happiness to one person, that person will pass it on to many others. That is the challenge of future Open Source projects.

Projects will have to sustain much longer and will have to cover a lot more functionality than before to get noticed. Someone starting / promoting a new Open Source project must be aware of this. Its going to be so much harder!

Large Company Sales Tips for Founders

Steve Blank has one message for startup founders - Get out of the building

So what happens when founders go out of the building and have to do sales with no previous experience? This is what happened to me. I had no experience of how large companies work.

Here are a few lessons I picked up from my experience of selling to large companies.

1. Network - There is only one way to break into large companies independently, that is via your contacts and network. Go back to your alumni association, your family, your school and college buddies. Start working on your networking skills. Networking is all about first finding a common interest (say Open Source or you went to the same school) with someone and then getting to personally know them - their family, interests, goals etc.

2. Find the right audience - If you are selling a business product, find business users who may benefit from the solution, if you are selling a technical product, go to the technical users. If you are not sure, go to the business users - they are likely to find a use for your product.

3. Be patient and consistent - Large companies are usually bureaucratic and paranoid about startups. But even within large enterprises there are early adopters. Once you get someone interested in your service, keep them in the loop. Remember if someone takes interest in you, they will give you a pilot or refer you to someone

4. Dress and present well - Large companies are used to smart (power) dressing and glitzy presentations. Make a good presentation, polish your shoes, wear neat formal clothes and talk confidently and clearly. Be prepared to flash a knowing smile as often as you can. Everyone likes people who look and behave like them. So try and mirror your contact.

5. Blend in the culture of the company - This may be difficult if you are not too experienced, but try and look for signs. Are your prospects specific or vague? Do they act important or humble? Are they paranoid or risk-taking? Are they formal or casual? Tailor your pitch accordingly and try to fit into their culture.

6. Communicate and be serious about commitments - Once your foot is in the door, keep your contact in loop. Startups usually fail to grasp or estimate the true costs of executing a project. So it is best to under-promise and over-deliver. If you think you are going to run over deadlines, keep communicating. By communicating, you will get valuable feedback about how your project / pilot is progressing and if you need to make any changes to your solution or approach.

If all this is not for you, then you do not have the temperament to do large company sales... like me :-) All of this is usually time consuming and expensive. This is why enterprise products are so expensive!

Finding the ideal team structure for Startups

A lot of what is written about managing teams is a discussion of the two basic classes of teams, centralized and decentralized teams. Both have their pros and cons and are best suited to different situations.

Centralized teams also give rise to a top-down structure of an organization. Top down teams can get a lot of work done as all members work in tandem. Independent and creative thinking can jeopardize the entire organization. The scope of work is divided into two classes, thinkers and doers. Thinkers do medium/long range planning, anticipate issues, allocate resources, manage motivation and doers execute the activities that the thinkers have identified on a transaction basis. Centralized teams are usually stable and provide security to all its members. Large companies and governments usually fall into this category.

De-centralized teams on the other hand are much more fluid and depend on creative and independent thinking members. These teams are usually upstarts and their objective is to find a niche that has not been exploited by others. Every member is a thinker and doer. The tasks are not stable and the position of each member is not secure if they are not willing to change their roles or learn new skills.

Truly decentralized teams are a much more rear phenomenon in business than centralized teams. Hence most people would have never experienced working in decentralized teams or even heard of anyone who worked in one. This also includes founders of start-up companies

A one to three person start-up does not face this problem, but when a start-up takes more risk than usual, the centralization / decentralization problem comes up. This is because most people have no experience / understanding of de-centralized way of working. As Steve Blank rightly points out, a start-up is a "search" for a scalable business model and hence what it requires is a de-centralized team. This is exactly what Jason Fried and company write about in "Rework"

Or the other option is to become ambidextrous. Be centralized and de-centralized at the same time. Let the need drive the structure. Say if you need to do extensive testing before a new feature release, make a centralized team and split planning and doing. If you need to build 10 new features in a month, keep it de-centralized. The catch here is that all the team members also have to be ambidextrous.

SAP lauches ByDesign

This month saw the release of SAP's online ERP - SAP ByDesign. Going by the great brand it has and all the German zest for engineering, it seems to be pretty good. I did see some of the videos online about the product. Now in India they seem to be going at Rs 3000 - 5000 per user per month depending on the number of modules you select.

Again brings me to the question. Similar products by startups like us - iWebNotes.com give most of the features at a fraction of the price. Dozens of other startups also have similar products that give many of the products at the same price. So where is all of this heading to? We know SAP cannot have the cost structure to give a a lower price.

Comments welcome!

Driving Traffic to your Site - The Real Story

There is tons of stuff on the net about driving traffic on your site - mostly by SEO/SEM marketers, but whats the real story?

An easy way to understand this is to imagine this - you are opening an restaurant - why do you think people would come to eat at your place? Here are common reasons:

1. Your restaurant is at a convenient location where people commute or work and don't prepare food
2. You have a cuisine that is unique and not offered anywhere around
3. You have healthy, tasty food at a good value - something that the overpriced restaurants around you are not fulfilling
4. You have a great atmosphere with live music where people can spend a happy evening.

and so on.

So what is it that you want people to know? Its your USP - what makes you stand apart. Your first target has to be to drive the "initial" customers, then if you believe you are doing a good job, they will come again and bring in their friends too!

So where would you start? If you are at a convenient location, you just need to put up a nice welcoming banner and people will start coming. If you have a unique cuisine, you can start targeting that clientele by showing a presence at community events or doing a targeted mailer. If you offer value, make sure your message covers it well.

Driving online traffic to your site works in the same way! Its all about people, place, product, price - Once you know your USP, it will be logical for you to find out who will be interested. Whats more, if you have an offering that is truly unique and benefits a particular community, people will WANT to talk about it.

The corollary is that if you can't figure where your offering fits, then you need to do that first. Driving traffic is not about some technical wizardry. Its about figuring your marketing USP and asking the basic question - "why would people be interested in visiting my site"

Then its a matter of contacting a few people who could help you and the rest will follow!

iWebNotes - Online ERP for SMBs

Mumbai based Startup iWebNotes has launched an ERP for Small and Medium Businesses at Rs 299/user/month. The ERP covers modules like Accounting, Sales, Inventory, Purchase, Projects and HR. There is also an online demo and an automated 30-day-signup. The initial response to the launch as been very positive and iWebNotes is getting around 10 sign-ups a day.

iWebNotes has breached the price barrier for ERPs and hopes that lowering the cost to such a level will drive mass adoption. The other advantage for SMB customers is also that it is a completely hosted solution on the so-called "cloud" model that is promoted heavily by IT vendors. Using the cloud approach, customers will also benefit by having their servers managed remotely. This is a complete win for customers who want to spend their energies in managing their business not software.

Other SaaS / Cloud applications in the market, mostly clones of SalesForce or Freshbooks are too simplistic or cover only a part of total business requirements. iWebNotes' approach is unique because it takes an integrated approach to all business functions. This is more valuable to companies that are beyond the startup phase.

iWebNotes has also built its own rapid-application development framework that will help companies who want to customize their ERP.  iWebNotes's Open Source model gives customers an exit, in case they want to host it on their own - something that Salesforce and others don't allow. It also allows opportunities for other companies who want to specialize in customizing the product. iWebNotes also plans to provide services to customers to help them setup their servers and migrate the application to their own.

Mr Sooraj Surana, of Peekay International, an early user of iWebNotes is extremely happy with the solution and says "We have a lot more reports that we can view, which helps us manage our business more efficiently. We do not require trained professionals to do simple data entry as with many other business applications which require training before it can be put to use. The best feature is that this application runs on a web browser. No CDs or installation files required. I can get to know what is happening in my company weather I am in Mumbai or Delhi or any other part of the world. All I require is just an Internet Connection on a computer"

First Post

The objective of this blog is to write about Online ERPs. The "Online" part of it is easy, but what is an ERP? Lets explore.

Most of the writing relating to ERPs and "Enterprise" software filled with jargon and keywords and many times, pure garbage. The idea of this blog is also to use simple language, a normal person can understand.


Lets keep the large businesses out of this. New subsidiaries of large businesses are welcome but the real large ones with zillions of transactions are out of this discussion. Now when we look at small and medium sized businesses their challenges are different.

What they are look for is a way to consolidate all their business data that lies in excel sheets and paper sheets everywhere. So whats the big deal?? ... The deal is this:

1. When the customer calls about a current or old order, you don't run around wasting your time finding the right excel sheet or right paper or calling ten people. So it saves time
2. You don't wake up all of a sudden in the middle of the night thinking about a payment you had to collect. Once all your invoices are in one place, the system helps you keep track of your payments
3. You don't start screaming when you find that your warehouse is out of stock. You know before hand what is the position.
4. When you sit to make your next investment, you have all the data you need. You know what are the fastest growing product categories, you know your best performing sale territories.

Not convinced yet? Well give it a thought.

ERP or Accounting Software?

This this a question I have been grappling with for a long time:

What category do we fit in? Are we an accounting software or an ERP?

Here are the arguments either way:

Accounting Softwares are smaller in scope and are used by small businesses. They may also contain additional workflows for stock keeping, but usually are simple. There is not much scope to tag your data across territories etc and not much scope of setting budgets, rules on discounts etc.

ERPs on the other hand are traditionally used by large and mid-sized businesses. They have the capability to handle large volume of data. The core functionality is still accounting, stock keeping, pre-sales, invoicing etc. There are lot more options to categorize your customers, territories, sales people. You can set targets and complex rules.

So where does iWebNotes fit in?

My take is that it fits into both the categories, it has the multitude of options that required for real businesses and also is simple enough to use for small businesses. So we are trying to blur the gap.
Ideally, we must combine the functionality of the ERP and simplicity of the Accounting Softwares so that customers get the best of both world.

Two Years of Web Notes - Slow but steady

Dan Pallotta has written a great blog on "misfit" entrepreneurs who see a different world and try to do something about it. http://blogs.hbr.org/pallotta/2010/07/misfit-entrepreneurs.html

Obviously it feels good to reads blogs like these to provide relief to the suffering (ego) :-)

Today we complete two years of the Web Notes experiment. After dabbling with solutions for a while we finally "pivoted" to the products model because that is what our calling is.

Our goal is to provide "usable" enterprise class systems at low prices. We also want to make it open source and provide unbeatable value to customers.

Sure, we have problems, but we will fix a problem every day, until the product becomes ready to use by pragmatic mainstream customers. And we are getting there. Slowly but surely.

Major Release this August

We are very excited as we prepare for our first major upgrade after the launch. The upgrade is planned for 1st August if we are able to get things right.

In this release, we further push the barriers of the ERP by including social networking features. A company is also a social organization along with being a commerical one. We want our users to be able make social relationships in the company, communicate in familiar ways and share information using our social networking features.

We are also planning is to throw open our powerful customization tools to the users. In the first release, we restricted the customization to ensure ease of setup but with more and more customers demanding it, we are planning to throw all the settings open.

We also have learnt from our your feedback on making the setup process simpler, so we are going to completely re-design our setup tools. We studied other apps such as Salesforce.com, Zoho and Freshbooks to understand the best practices in each of them. We will now bring all setup under one page so that you know where to go when you setup the system.

Along with this we will also release numerous patches and fixes and also launch a brand new Maintenance Module. We are also aware of the quality issues many of you have reported. We as an organization have discussed this extensively and will include more and more ways to release with testing as many scenarios as we can.

Cheers

Building a "beautiful" product

This is again a "pivotal" stage for the company. We have built a certain product, persistently over years and is there for everyone to see. While early adopters take their time, we keep on the cycle of continuous improvement and people start recommending our product, there is bound to be a lull in strategy. Not being aware how long this phase will last, there must be an integrating theme to the phase.

This is a phase in which our progress will no longer be measured by the number of features we produce (we are already past that) or how much revenue we generate (we are still to get there).
The target for this phase should be - to build a "beautiful" product. To get a sense of progress, there must be a measurable. How do we measure this?

Lets break this up:

1. The product must be easy to understand - headings, labels, actions and exit must be clearly marked
2. The product must be consistent - similar paradigms to be used throughout
3. The product must look familiar in terms of other applications that the users might be using
4. The product must be stable
5. Messages must be clear and suggestions must be given if there are stoppages
6. There must be "sign-posts" (suggestions) for users to reach a particular target. We can put in "scenarios" for users to understand the product.

This gives us nice targets! Lets see how well we progress on this...

Starting a new blog

Usually I write on our company website but I am starting to write here so that our friends in Google can index better! Will write on technology and startups.
As Steve Blank rightly puts it, a startup is a search for a business model. Hence the tendency by startup entrepreneurs to think a lot about their strategy and business model. So I hope this blogs helps others as much as it will help me in straightening out my thoughts!