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That was the topic of a discussion I was had today, with a friend of mine, who is a CEO of a SaaS company. Ironically, he runs a SaaS company that serves other SaaS companies.

SaaS was all the rage 4-5 years ago and now with a few years of  experience behind them. Many of the freshman batch of SaaS companies, we both knew,are still going through the growing pains (business model, scale, cost benefits). So it was worth a ponder, on our part, to see SaaS was all it was cut out to be.

We discussed a lot of different things about SaaS, discussing specific challenges that specific companies we both knew were going through. Here are my thoughts on SaaS (come to think of it they have been the same from 4-5 years ago)

• I think SaaS is the best model to deliver (enterprise) software. Software delivery and management is a specialized function and is best done by the specialists (i.e, those who designed and developed it). Assuming that IT teams in companies would somehow be able to perform the care-and-feeding of a enterprise application through it’s lifecycle is just not realistic. Companies have been living a lie all these years.
• On the business front, SaaS really levels the playing field in terms of risk assumption. The vendor now has as much at stake (if not more) as the customer who takes a chance on it. Customers having regained some of the (risk) leverage on vendors are not going to let go of it easily again.
• As for the challenges SaaS companies are facing around costs, profitability on each customer, I think it is still early days. We are merely in the second innings of a 9 innings game. Even the most successful SaaS company Salesforce.com has not quite figured out the exact magic to profitability. As the model matures, (think Utilities like Water, Electricity Grid), newer license models that are more advanced than the prevailing (predominantly) per-user license model evolve, the business model will become more manageable. So will the reliability and scalability.
• SaaS companies have so far focused on acquiring more customers and now that they have had those customers for a while, they will start focusing on adding more value to their customer’s business. That will result in substantial increase in the Customer Lifetime Value (CLTV) and reduction of churn. That will also lead to quicker amortization of the costs and quicker road to profitability.

Been a while since my last SaaS post. So feels good to be back writing about SaaS.

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Early stage companies routinely think of partnerships as a way to acquire new business. Being scrappy it is natural to think of being parasitic. “We cannot afford to have an army of sales people or we don’t have the mindshare or brand to make companies take a chance on us”. So “if only we can partner with Deloitte or KPMG we can sell into their entire existing customer base”.  Before you propose that strategy to your leadership team or you happen to be a leader yourself – just take a minute and think about it. You are a company yet to establish a reputation or recognition. Think of how many other vendors like you must be contacting the “Deloittes and the KPMGs” to partner with them. Thinking of partnering with “Oracle and SAPs of the world” in the early days is an even more outrageous strategy. Just make peace with this – “You are not worth their time”. Unless you have a way to bring them more business you are not worth their time. Better yet, get them in a deal that you have already clinched and give them business, not once but a few times before you get them to bring you into their deals. The friend/ex-colleague you have in a Deloitte, KPMG, Oracle or SAP might not tell you this directly, but that is the truth. If you continue to nurse any aspirations of going ahead with your partnership plan before you established some marketplace resonance for what is it that you do – you are naïve. Here is some reality for you  – for every success you have heard of a small, no-name company with their magical technology signing a partnership and then parlaying that into millions of dollars of business to become an overnight success, there are thousands (if not millions) who fall  by the way side pursuing this strategy. But then again, companies love to tell their sorry failure story of how they almost got this partnership working and how they were on the threshold of greatness. Stop dreaming and don’t become another road kill.

With that morale boosting rant done, here are some things to keep in mind while venturing into a partnership (using a bakery and cake analogy)

• There is no shortcut to succeeding in technology business. You need to first get someone to taste your cake and buy it from you. Yes…Directly. You might not make great margins on those deals, but you get the taste (no pun intended) of what the customer expects.
  • Repeat that exercise with an improved cake, factoring in the feedback from first customer, with a new customer. Do this until they tell you that you have really helped them. Think NPS (Net Promoter Score).
  • If they don’t tell you that means they did not meet their needs. They are just being nice in not telling you that. Repeat the exercise of improve-sell-and-check? Your value proposition (think nutritional benefits listed on your cake) is not complete until you manage to sell the cake to multiple customers and they all like it and agree to would vouch for it. Once you accomplish that, is when they will tell you of any additional needs/help they need. That is when you can augment your offering with an appropriate partner offering.
• From a timing perspective, until you establish some repeatability of revenue – ideally 3-4 quarters (or 7-8 customers whichever comes first), don’t even think about partnering. . All you will accomplish are a lot of “great meetings”. That’s it. It is a huge distraction.
• Start partner discussions from a position of leverage. Conversely, partners will reach out to you if you are doing well and that way you have more leverage in the structure of the partnership. Remember these very partners that you are seeking are also in those companies you are selling into. If your solution is doing its trick in that company they would hear about it and start doing the math. Soon you will get a “we should grab a coffee” call from one of their leaders.
• Partnership is not a sales thing. Partnership is a strategy thing. It is not something two sales guys on either side can whip up. Just partnering with someone, in the hope that they will be motivated to bring you business is like “Linking to someone with a lofty title on LinkedIn thinking they will help you get a job”. Neither is going to happen as easily as you imagine. Partnership should include the clear goals for success for either side. Without that you will not get buy-in from the top management of your partner. Success is more than just sharing some leads/opportunities (that is just crumbs). If the partnership yields value (to both companies) that is beyond what either can accomplish independently or with other partners then the partnership will work. Think of all those alliance partners who put “Oracle Partner” logo on their site (and pay money for that privilege). Most of them don’t see the light of the day. They still end up working hard, on their own, to build business. Oracle is not working hard to get them new business. Remember, it is always the smaller of the two that will do all the work to bring home the bacon. The bigger one usually waits to takes it share.
• This one might sound a little contradictory to the previous but it is not. When you are ready for a partner and if you are young company, chose a partner that is more established in the market. Partnering with another wannabe upstart or earlier stage company (no matter what they offer) is akin to having two one-year-olds trying to hold hands and teach each other how to walk. They might eventually succeed in that, but there will be a lot of falls, lost-teeth and bruised elbows in the process. Really painful, just don’t do it.
• You don’t need to partner at the first opportunity with another provider/vendor. Don’t be in a rush. If a particular customer has a need that can be serviced by a fellow vendor that you have identified (and verified), then use them on an ad-hoc basis and get to know their functioning. Think dating. If it works out once, try them again in another project. Remember divorces are painful. If things did not work, you can terminate partnerships but you will then have to deal with the child (i.e. whatever you jointly delivered to the client). Only after you have established that there is alignment in the value system of both companies, do you go ahead and ink the partnership.

Having said all of that, I still believe partnerships have their merits. I have had some successful ones in my past life. They can lead to glorious outcomes. Just that there is a right time and right partner to do it with.

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Join.me provides a easy to use instant meeting solution by which you can easily do screen sharing and  run meetings and spare the participants the agony of installing any plugins on their desktop. It is slick and works just fine (I have run more than 30 meetings to vouch for it). If you are the presenter, it downloads a small app on your end with auto-installation that is less than a minute long and you are all set. You can begin the meeting and share the meeting id in the XXX-XXX-XXX format to your fellow participants. That is it. It’s a breeze.

Rondee is yet another entrant to the free conference calling arena. Most of the existing free conference calling solutions run into issues with VOIP solutions like Google Voice, Magic Jack and others. Rondee works around that with a California number and it works like a charm. You can schedule or do a instant call, record the conversation and have it mailed to you as a MP3 file. It gives you option to control whether you want to have your participants actively participate or be in a listen only mode.

Give both a try.

Disclaimer: I do not have any vested interests in either of the services.

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If in-person demos aren’t challenging enough, doing a remote product demo on the web takes it up another notch. You now have to contend with the painful experience of installing some plugin (WebEx being the worst) and then have audience spread across different locations, some on screechy VOIP phone. Given all the force majeure possibilities, the least you could is to be well-prepared for the demo, when the all the stars finally align.

While there are challenges aplenty in a remote demo,  there are some bright sides too. With a few smart techniques you might be able to achieve more in a remote demo than in an in-person demo.  Here are some simple techniques

1. Make them a stakeholder: Once the date for the remote demo is fixed, get working on finalizing the agenda. Instead of trying to define the outline for the demo yourself, make the audience (mainly the sponsor on the customer side) have a stake in the demo. Empathize with them that despite all the “inconveniences”  of a remote demo, your goal is to ensure they get everything they are looking for in the demo. And hence you would like them to define the agenda. Send her/him a one slide deck with bullet points of what you could be covered and what you think the audience would takeaway. At this point you are better off not making a ask. The last thing you want is the remote demo audience to arrive disenchanted about having to deal with another sales guy who is trying to peddle another product that they might not need. Indicate to her (the sponsor) that the agenda bullets you sent are just placeholders and you would rather that she come up with the agenda and what she (and her team) would like to see and takeaway. Once you get her to define the agenda, unbeknownst to her you have made her a stakeholder in the demo’s success.
2. Seek information without implying as much: While designing the bullet points for the preparatory one-slide deck, while listing takeaways, deliberately put roles of each decision maker(CEO, CFO, CIO…) you think would be present on prospect’s side and leave the takeaway column in front of their name empty. This will now serve as a template for the sponsor to fill in. Given that you have put specific roles there, they will now be forced to put expected takeaways for each/most of those roles. If they did not put anything – atleast you know that that role might not be a decision maker/stakeholder or present in the demo. See now without being very intrusive you have sought out some critical information. At worst, you might get people with those roles invited to the demo.
3. Target their agenda: One more thing you will benefit from is that in addition to receiving the agenda, as part of it, now you’ve got a clear outline of what they are expecting out of the demo. An in-person demo might not have yielded this information as easily. Not to sound presumptuous, but typically we leave a lot of things for later, as discussion points, to be done during the demo. Here now due to the constraint (it being a remote demo), you now know upfront, their expected takeaway. So you have the luxury of tailoring your demo to the target (the takeaways).
4. Keep them involved: Now that you are better prepared, conducted the demo slowly and have the sponsor guide you through the agenda. Make an explicit request for her to guide you in terms of what/when to move forward. Tell her that, given that she is in the room with the stakeholders and can see the sentiments, she would be in a better position to guide the demo. By involving her, you are now keeping the entire lot on the other side of the phone engaged. If the sponsor on the other side happens to be the Big Boss, (with her being the demo guide) the participation would be great. If the sponsor has her boss in the room as an attendee, you will be helping her win brownie points with her boss on her leaderships skills. So it is a win-win situation.
5. Leave-behind just in time: One of the critical things about product demos is the leave-behinds. You need to have something that keeps your value proposition fresh in their mind after you leave, atleast until your follow up call. Considering that you are not going to be there to leave behind things, have all those documents ready before the demo. When you are half way through the demo, send them via email. If you time it right, you might be able to bring up a topic that is in the leave-behind material and mention that if the sponsor checked her inbox she should have a brochure/whitepaper/datasheet that will have more information on that topic. Don’t send it ahead of time, they will have looked into the material and that would reduce the intrigue. Sending it just as you are mentioning it in the demo makes a big impression – believe me. It also speaks to your well-preparedness. (My assumption here is that the sponsor would come to a presentation with her laptop/iPad and would get to see your email with leave-behind material trickle in, if not make that a request ahead of meeting under the guise of  just in case).
6. Close before you end: One of the key objectives of sales demo is to eek out the next call where you can discuss the next steps. Most sales demos go long and by the time it is 5 mins to end the demo most participants start drifting out. The sponsor, herself, might be already thinking about the next meeting she has to hop to. In a remote web demo, this phenomenon might occur even earlier. So make sure that before you get to the end of the demo/presentation, create a close. Identify something in the “sponsor-proposed” agenda that you can provide follow up/deeper information on and agree on providing that as a follow up. If you can eek out  a in-person meeting given that you might “coincidentally” be in the area (might work for a local prospect)  that would be great. Once that accomplished, then end the demo.

I have tried this model a few times, starting with parts of it and finally settling with the outline above. Nowhere in the whole process did I come across as peddling something or presumptuous already knowing that the prospect needed my product. Nothing puts off clients as someone who comes to a company with very little knowledge and professes to know their needs. I will tell you from my personal experience, while being on the other side of the table, making buying decisions, I have spared no time shooing away such pests.

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As luck would have it, I was involved in two instances, last week, where a channel strategy was being adopted as a predominant sales strategy, albeit in completely different markets. Both companies however, were similar in that they were selling enterprise software and were in the early stages. While I had my thoughts on the rights and wrongs of going the channel route, I decided to reach out to a few in the know. They had confronted this challenge and made decisions one way or the other.

So based on all the discussions here goes, the Pros and Cons of going with a channel strategy for a software company, especially in the early days

Pros 

1. Channels (VARs or Partners) are already entrenched in the customer base you want to sell into. They have established relationships that will give them easy access to the decision makers. So there might be some quick wins to be had.
2. The Channel is expected to bring in the much needed industry vertical experience after having been on the ground and have a good understanding of the inner workings of a prototypical company in the industry. This can serve as a good reference point as you develop the early base product. Maybe even the product roadmap down the road.
3. Early stage companies are long on vision/ideas and short on budget. And very short on sales expertise. So Channels can present a way to get some traction without having to invest heavily into a salesforce.
4. Channels can augment the salesforce even in the latter stage of a company in geographies and micro-verticals where the company does not have a presence or want to venture into.

Cons

1. Early stage software companies are fluid in their very nature. The product, people and the marketing goes through a lot of churn in the early stages as the company tries to find a viable business model, product resonance and in one word raison d’ etre. At this stage getting unfiltered feedback from the target customers is critical in establishing the value proposition. Having a Channel partner as an intermediary becomes an unnecessary nuisance at this stage.
2. The logic that Channel Partners, with their “deep domain expertise”, will become the sounding board for your product roadmap is a flawed thought. The deep domain expertise is subjective based on what they offer in terms of service. Call me cynical, but when it comes to building a product, that at its very core might one day challenge their sweet spot (of providing last-mile services) will be viewed as a threat. Why would they then be completely behind improving such a product?
3. The incentives of a channel partner and the software are not always aligned. They will never be in most cases. Having two partners who need different things out of a particular deal will mean the product will have two masters. The product team has to tread the line where they leave enough for the Channel Partner (like a System Integrator) to add their value (read services). This goes against the whole expectation in the new world of software. Gone are those days when a prolonged implementation cycle preceded a software delivering true value. Software-as-a-Service has firmly ended that gravy train.
4. Pricing/Revenue forecast is going to be a challenge given that you are relying on a third party to meet its commitment. Ideally, a company would like to have partners guarantee or agree to certain performance numbers. But given the desperation of a early company, I am not sure you will have much leverage with partners. You just want to move the needle.

Channel Partners come in variety of ways – VARs, Solution Partners and System Integration Partners. The virtues of  partnering with Solution Partners whose solution might complement yours and be a net additive in terms of value to the customers is very clear and smart. I think having VARs and System Integration Partners early on creates a self-inflicted isolation from customer interactions, that is not good for the company. So if/when possible focus on establishing a clear resonance in the market place before you start bring VARs, System Integrators into the discussion.

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So if you are in the market for a free alternative PDF reader – I give you two for the price of none.

1. Foxit Reader – one that I have been using for the last 4-5 years since I first developed the distaste for Adobe products. Foxit is comparatively lightweight to install and run. Starting as a barebones PDF reader, over the years they have added a few bells and whistles like skinning, browser integration, recollection of previous sessions to make it more appealing. Also recently they have added sugardaddy Ask.com toolbar to fund their free version. If you keep your eyes on the installation and uncheck the toolbar installation, you are good to go. You can download Foxit reader from their site here
2. SumatraPDF – the new kid on the block and my current favorite when it comes to PDF readers. I am stickler for bare bones and this serves me just fine. It is fast and has a smaller footprint. If you are just venturing out into free adobe alternatives world, I suggest you try Sumatra first before looking elsewhere. Download it here

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So here I was in a position to interview another Sales executive for a late stage startup which had up until now grown through the personal network of the founders. As the company reached adulthood, the decision was made to bring in seasoned Sales executive that will help take the company to the next level. To build a small sales team that was hungry and was keen to do something amazing. While not holding a sales executive position, I have had the responsibilities to influence and impact sales in many of my past roles. So interviewing sales people had become a regularity for me. This time around, as I was preparing for the interview, I thought it was a good time to jot down the strategies that have worked for me.

So how do you interview a sales executive when you are not an expert in the mechanics of sales like compensation strategy, territory management etc ? Here are some things I have used to evaluate them on

1. Research Skills: First and foremost, I  try and understand how much the sales person knows about my company (the hiring company that is). Notwithstanding the fact that someone in my team would have already talked to the candidate and told them a lot about our company, I would still want to evaluate and see if the candidate has made an effort and done additional research on his/her own. I would ask them about some lesser known facts about our company that someone with little research could have found.  A candidate who does not research enough about the company they are going to join, tells you something about how good they will be at their  job (of researching a prospect). Granted that marketing will be tasked with enriching a lead with information about the prospect but when it comes building new relationships a little bit a personal touch would help. This is where those additional research skills are paramount.
2. Passion for the problem: Most companies look for top-performing sales people from another successful company as the prospect pool for their sales position. I think that is a faulty strategy. In most cases the sales job would have become easier for people in those successful companies and the hunger (and hussle) might not be there. Not to mention the rigidity that they might have. I would rather look for people with passion for the problem we are trying to solve.  A quick word on passion. I don’t believe passion is transferable. Either you are passionate about a problem or you are not.  In big companies, the brand leads the sale. In startups, there is no brand yet. I have worked with sales guys who came with tall acclaim of their past deeds and just could not understand the pain of the customers we were trying to help. They soon got frustrated and it was a disaster. If the customer does not feel that you understood their problem, they will be hesitant to move forward and deal will drag on.
3. Know your needs clearly:  Companies often are too ambitious for their own good. A company that has barely found resonance in the marketplace for their offering has no business looking for a big time sales VP who is used to carrying millions of dollars of quota. Based on that thinking you will get recruiters sending you hoards of resumes wherein each candidate is making claims of closing business worth 10 times more that what you are looking for. So what is wrong with that you say? Someone who has done 10 times the revenue target you have in mind can only be good isn’t it?. Unfortunately not. Punching above your weight class might be good in many other cases but not so much in early stage sales. In the early stage, sales team needs broader skills. In addition to closing sales, the sales person is also a proxy to the product manager and should continue doing the validation of the value proposition. So someone who has hit home runs all his/her life, he/she will not be willing to take pitches or get hit and just get on base. So in early stages, it is much better to get someone who has the aptitude to nurture opportunities and generate strategic sales.
4. Listening Skills: Sales people are typically not great at listening. It is ironic given the very requirement of their job is to listen to the prospects and understand their needs. Most sales people believe in controlling the discussion and even have a script coming into each meeting. That goes against early stage sales. To test this, I intentionally hog the early discussion. I don’t give them a chance to interject to see if they get frustrated. And then  later on go back to some of the points I made to check if they really listened. This will be a preview of what will transpire when they go to a customer site. My test is to see if they listen twice as much as they talk. Remember, we have two ears and one mouth, and there is a reason for that.
5. Gets the Startup mentality: Most people think sales is sales – it is pretty much the same. Quite the contrary. Startups by their very nature are evolving, by the day. Value proposition changes constantly (and hopefully gets better). Someone who cannot think on their feet and adapt will find it challenging. I wrote about this  in an earlier post about Product Completion and what makes for an effective software sales rep. Someone who cannot deal with ambiguity might find it challenging to sell a startup solution that is ever evolving. Ask them about some of the common challenges in a startup. If they start talking about the product was not ready and the product team did not deliver then you need to be on your alert.
6. Attitude: In most companies, sales people are the most cheerful and gung-ho. With their arrival, they inject energy into the room. They celebrate victories and boost the confidence and when things don’t go their way, they are still optimistic. To me that is a key ingredient in a sales person. In a startup there are problems aplenty. If it is not the sulking engineer, there is the ever crashing server to deal with. Not to mention the perennially complaining customer. Startups will have more than their share of problems to deal with, so the last thing we want is to add fuel to that fire and get a sales person with attitude issues.
7. Define the Value Proposition: After going through what we do (and hopefully a few prior meetings with my colleagues) by now the candidate should have learnt enough about our company. So I play a little bit of role playing with them. We pick a company they would first sell our product to, if they came on board and I become the decision maker in that company. I ask the candidate to pitch our product and try and convince me to buy. As part of that role playing, I also evaluate the candidates articulation skills and also style of presenting the value proposition. This tells me how they think on their feat. I routinely change the role of that decision maker from a CIO to CFO or a COO, wherein I imply a change in role of the candidates’ point-of-contact,  a to see if the candidate is able to course correct and adapt the value proposition.

As I mentioned, I have not lived in a salesperson’s shoes, carried a sales quota. So I look at it from my vantage point where I am called in to help Sales and being responsible for revenue. Using these strategies above, I have been able to help influence sales hiring decisions.

What has worked for you? Would love to hear from you guys who might agree or disagree.

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Wonder, what would be his reaction if someone were to ask him what Cloud Computing was – his old rant berating Cloud Computing still reverberating in many years.  But we all knew he would come around eventually and he was merely posturing to buy time for his teams’ to catch up.

Anyway I digress.

Enough has been written about the Taleo acquisition and how Oracle is eating the humble pie when it comes to Cloud Computing and Oracle is venturing into Cloud Computing despite Larry’s histrionics. So this will be a quick 3 points for and 3 points against post.

Here are three things I think Oracle would gain from this acquisition

1. Oracle got a company equivalent to what SAP did from their SuccessFactors acquisition. At a much cheaper cost compared to the spendthrift SAP. Although Taleo and SuccessFactors had slightly different focus. Here are some details. Same revenue better margins at almost half the price just when both the companies were demonstrating fatigue from their breathtaking runs in the last 3-4 years and with the eventual leader in this space Workday looming large in the review mirror.With this acquisition Oracle should be able to defend any potential customer loss in the SMB space happening to either SuccessFactors and Workday.
2. Talent Management was not Oracle’s forte. Even after and with the Fusion applications. (What kind of endorsement of  Fusion Applications is this you ask?) So this acquisition will be net additive in terms of the capabilities.
3. Taleo brings with it 5000 more customers to Oracle. Most of the customers are SMBs and new era companies that are not currently sending annuity checks to Oracle.

But there seems to be more things not to like about this acquisition, here are three from my point of view

1. It is public knowledge in the industry that PeopleSoft had the best HR products before they got consumed by Oracle. When that happened, two factions emerged from the erstwhile Peoplesoft leaders. A Dave Duffield faction and a Craig Conway faction. No prizes for guessing which faction was more passionate about HR space and where they have landed since. So with this acquisition Oracle seems to have ended up getting the faction that is made up of Sales, Consulting, Bizdev. And Workday with the product, passionate team and consequently a better product.
2. Talking about Product. Another well known fact about Taleo is that it is not a “True SaaS” company in the strict sense of implementing multi-tenancy and single code base etc. It is more closer to ASP than a True SaaS with heavy customization involved. Taleo is an amalgamation of 3-4 platforms, if not more, coming from acquisitions and a person in the know told me that a new customer on-boarding effort involved a lot of professional services effort to finally see the light at the end of the tunnel. Not sure Oracle needed that hairball.  Then again it might be just what Oracle wanted given Larry’s distaste for multi-tenancy.
3. Oracle has one of the best profit margins in the technology industry and have had that for a long time. Taleo on the other hand has negative profit margins (-4.76%). This will not be tolerated at Oracle. If you apply the Oracle playbook to this acquisition that will involve serious re-jiggering and will change Taleo big time as we know it. It is not a big enough business to let it run as business unit all to itself. If it is rolled up under the PeopleSoft or Fusion product lines then it will be a lot of fun.

Based on these incidents, here are some things I see through my crystal ball.

1. HP and IBM are customers of Taleo and something tells me there will not be for long.
2. Taleo and Workday had a complementary relationship due to the different areas of HCM space they played in (Talent Management and HR respectively). Now with Taleo becoming part of Oracle, that relationship might be done. Will this mean Workday, which itself is readying for an IPO, would go and buy someone like a Cornerstone OnDemand to augment the Talent Management capability.
3. With Talent Management vendors firmly tucked in, the big guys will venture into the adjacent space of Learning Management Systems where they will devour vendors like SumTotal Systems, Saba etc.

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The question was ambiguous to begin with on a multitude of fronts. Here is why

• First of, a software product is never complete and attributing a percentage complete to the product is not right. Since all metrics around software product are only valid if they are looked from the point-of-view of value a customer derives. So a 100% complete product from a product manager’s point-of-view might not necessarily mean 100% from the market/customer point of view. So no one can tell with certainty that a product is 60% or 70% complete.
• Secondly, even if we managed to concoct a percentage complete for a product it is still not accurate because a 100% complete from the point of view of the mom-and-pop shop round the corner might just translate to 50% complete from the medium sized company downtown or 10% complete from the point of view of Fortune 100 company like GE. So it is all relative and misleading.
• Thirdly, if you are looking for a company that claims to have a product that is 100% complete and still looking for a sales guy, that implies they have missed the boat. They should have built a ramp way before they reached 100% and had a sales force created to capitalize on the increased value delivered by the product. You might be joining this company a bit too late.

Coming back to the original question – how does one answer that question.

A software product should always be measured and rated based on the value it delivers to the customers. Always refer to the value proposition of the product with respect to target market it is looking to serve. So a better answer to the question would be something like

• we have managed to help 50 customers derive tremendous cost savings that they continue to find the need to use it after 5 years or
• we have helped customers so much so that 50% of our customers are from referrals.
• we have been growing 50% year-over-year, which indirectly points to the increasing value delivered to customers and the consequent increased adoption.

That should give enough indication of the viability of the product and convince someone looking to join. %complete for a product is a vanity metric which means nothing.

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The company has been doing well making opportunistic sales across a wide spectrum of companies either through referrals or personal contacts of the founders.  As you well know, personal contacts and referrals can help you get your early adoption but at some point you need to have a strategy to build a customer base organically. That is where I got introduced to help crystallize the product strategy.  Much as the companies would have liked that to be true, it is unrealistic for a small company to target a horizontal customer base and meaningfully meet their customer needs over time. They were targeting a niche usergroup within a large company and that made it even more tougher. So as the first course of action, I recommended that, we narrow the focus to a particular industry vertical rather than making it a horizontal offering. After evaluating the existing customer and product evolution it was clear that we had to focus on one vertical that would give us what would amount to a viral growth (Is there such thing as virality in an enterprise software world? there is  and I will get to that in another post). After the management team bought into the strategy, the next step was to come up with a clear value proposition that would resonate with that target segment. This had to take into account the specific personas we were targeting in the companies.

Some background on the target users in the companies. The personas we would be targeting fall under the broad investment banker community. Mostly comprising of smart MBAs that deal with complex business challenges. So imagine the prospect of us walking into their flashy offices and saying we have something that will help them. We were risking getting thrown out by the security guard for the sheer audacity behind that claim. So to sidestep that here is what I came up with. We identified a few contacts in the target segment and reached out. We would have not gotten an appointment if we said that we had something that would help them. So our pitch was along these lines

“We have something that we have been selling to the Capital Equipment companies and suddenly in the last 3-6 months we have been getting a series of repeat requests  from guys in <your industry> to sell them our product and that they would love to have this tool and they think it would help them immensely in <activity 1> and <activity 2>. Before we license our product to them, we wanted to run it by you and make sure we are not getting into an area we are not experts in.”

Voila!. we got our appointment. Notice that by saying that their fellow professionals/rivals feel it can really help them created the urgency for them to meet with us and see our product. Our saying “area we are not experts in” mellowed their ego I am sure. Now we had to prepare the demo to win them over while continuing to maintain that we are not there to sell and merely there to get their approval of the product solving critical problems for their industry.

So the objectives were clear – orchestrate the demo in such a way that we eek our their validation, perk their interest and get them to give us a chance to sell to them. The operative phrase being “give us a chance”. If we were too eager to sell to them, it would have shown in our actions.

As for product demo itself here is a script we followed

1. We made the demo about the life-in-a-day of that executive that we showed the demo to. We also took a realistic scenario of how they were tackling a problem. In fact, we mocked up the demo with that executive as the user. A little bit of pandering of ego has never been wasted in opening up the discussion.
2. We deliberately mocked up another company (a fierce competitor of theirs) and accidentally opened up that portfolio before the demo. Just long enough to give him a glimpse, and make it seem like we are talking to them as well, all the while never saying anything. This ensured that we got their full attention.
3. We made the demo about them and not so much about features and asked some open-ended questions like
   • What would you do in this scenario ?
   • Does is it really work this way?
   • I am sure you have sophisticated applications that do this already
   • How would modify this feature to do that?
4. We also did some role playing to pretend we disagreed on some topics thereby allowing that executive a chance to interject with his sagely advice.
5. Finally asked the question, if he were in our position, would he see the value of going into this vertical and why would someone buy it and importantly who would buy it. That was the watershed moment. He started explaining  how we should sell, whom to sell, how to articulate the value proposition, how to price the solution.
6. If that was not all, he also turned around and said, he would be happy to introduce us to others within his company to discuss other aspects on business where this product might be helpful.
7. When we finally ended the demo, we said, if it was not too much of a hassle, we would like to update him with the feedback we received from other companies in their vertical we were due to meet. Needless to say, he said, he would have rather we circled back to him in a couple of weeks, while he thought some more on how this could help his firm. That was hook, line and sinker !!. Perked his interest and got a lead to call him back.
8. Some things we ensured during the demo were
   • we avoided the customary elaborate introductions to highlight the “earth-shattering stuff” we have done in our pasts and spent that time on how their company has been executing.
   • we avoided elaborate numbers (remember they live and die by numbers so we did not want to evoke the monster) and stuck to the problem.
   • we avoided any implication of us knowing how they work and stuck to the “you are the expert” theme. It is usually tough for tech guys to sustain that stance during the entire demo. Being a tech guy myself I can vouch that we rank right behind, if not on par with, the Wall Street MBAs in terms of our egos.
   • we left our sales mindset back in our offices and instead wore our Product Management hat and listened and took notes.
   • and foremost of all, we religiously obeyed nature and listened twice as much as we talked (remember two ears and one mouth are there for that specific reason)

Time will tell how repeatable this strategy is. But we are confident that this will get us further in penetrating this vertical. As we find other personas we will tailor our demo script accordingly. In the meanwhile, we are waiting to hear back from that executive so we can go and nurture that opportunity further and hopefully one day close the deal.

What other techniques have worked for you to get traction for a new product?

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I classify the whole offshoring effort into four buckets -

Vendor Selection

• 90% of the success is driven based on vendor selection
• Conduct small engagements with 2-3 shortlisted vendors to sample their capabilities – most overrate themselves. Seeing is believing – don’t tell them that there is a long term engagement in the offing. See if they can connect the dots. References are overrated and, most often than not, irrelevant to your specific case so evaluate their competency for yourself.
• Evaluate the generals not the soldiers. Soldiers leave or get transferred, so measuring generals is a must.
• Choose vendors from two different countries if you have the flexibility and split the work between them. Let them know there is a split and let them also know the fittest survives. Healthy competition is good. Don’t look for volume discounts initially.
• Bake the quality metrics into the SLA and split the comp based on fixed + performance based parts.

Contract Process/SLA

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CSS Sprites help us bundle up multiple images into one and reduce the number of images that are downloaded to the browser. It also reduces the contention that is created during page rendering while browser is still waiting for the image to be downloaded.

Project Foundue CSS Sprite Generator is one of the best free sites that allow you to upload a bundle of images and generate a sprite alongwith the CSS styles that will provide accessors for each image in the sprite

Check out one of the sprites I created for my blog

combined image

 the styles to access those individual images

.pc-social-icon{background:url(http://static.prudentcloud.com/pc-social.png)}
.pc-facebook{ background-position: 0 0;display:inline-block;height: 32px;width: 32px;}
.pc-feed{ background-position: -42px 0;display:inline-block;height: 32px;width: 32px;}
.pc-linkedin{ background-position: -84px 0;display:inline-block;height: 32px;width: 32px;}
.pc-twitter{ background-position: -126px 0;display:inline-block;height: 32px;width: 32px;}

 

The Actual code to display the image in HTML

Connect with us @

<a href=”http://feeds2.feedburner.com/Prudentwire” class=”pc-social-icon pc-feed”/>
<a href=”http://twitter.com/prudentcloud” class=”pc-social-icon pc-twitter”/>
<a href=”http://www.facebook.com/prudentcloud” class=”pc-social-icon pc-facebook”/>
<a href=”http://www.linkedin.com/company/prudentcloud.com” class=”pc-social-icon pc-linkedin”/>

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Now to make life better, there is a new kid on the block. A leaner, friendlier improvement on PHPMyAdmin – Adminer. While there is something to be said about the naming skills of the creators, the tool definitely is a marked improvement on PHPMyAdmin. The tool has support for MySQL, PostgreSQL, Oracle, MS-SQL and SQL*Lite. Besides that they also plugins for a host of content platforms like WordPress, Drupal, Joomla, TYPO3 etc.

Not impressed yet?

Here are some more things they do

They also support a myriad of languages starting with Arabic, Catalan, Chinese, Czech, Dutch, English, Estonian, French, German, Hungarian, Italian, Japanese, Lithuanian, Polish, Portuguese, Romanian, Russian, Slovak, Slovenian, Spanish, Tamil, Turkish.

They are Apache 2.0 License so you can use it however you want.

Now go and get yourself a copy of Adminer.

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A mid-stage software startup that I have been advising was planning their website and asked me for some advice. Here is what I drafted as a rough template for their website. Thought it might be useful for other companies thinking about their website.

Note: It is going to be a long page but I hope you will find it useful.

Software/Technology

While there is no standards as to what technology should be used for building your website, conventional wisdom is to use to use something that gives you more for less effort. WordPress is fantastic platform for building a website. Given the other things like blog, social engagement, newsletter, forms and more importantly SEO etc that you will need on the site, WordPress should be your first (and only) consideration. If philosophically you think Drupal, Joomla can do the job, you will not that wrong. If someone recommends that you build a website from scratch then run as far as possible from that person and look for someone smarter.

Website Structure

A typical minimal website structure should look like this.

You can always add more things to it as necessary. I will go into detail about each section and explain the necessary ingredients of each of those pages.

Home Page

The home page should clearly articulate the message in a crisp way. Don’t make it wordy as people don’t read and figure out your value proposition. Make it pictorial and easy to understand. Cap that off with a clear Call to Action to get the users to signup or download your product. The page should have at the most one or two things that the visitor should be expected to understand. Anything more than that increases the risk of losing your prospect.

Company

About Page

About page is the place where you demonstrate the passion that drove you to build this company. Use this page to share the  following

• The genesis of the company – as to how you came across the problem and were bothered about it and seeing that no one was solving it you got down to solving it.
• Briefly talk about the founders and how they shared the common passion for this problem space and how the founding team got assembled.
• Drive home the mission of the company and how the company would operate. Things like “Customers will always come first…” and “Don’t be evil…” messages that company stands by should make up the about page.
• Don’t miss the opportunity to make a Call To Action on this page asking the reader to engage with you by either signing up/downloading for your app or reaching out to your customer engagement team.
• End the page with links to the contact page and requesting readers to engage with you on the social platforms like Twitter, Facebook and LinkedIn.

Leadership

I think Leadership page is where you build trust with the reader. The reader/prospect, after going through your product/service offering details looks at the Leadership page, they are essentially looking to see who is standing behind this service. Use the leadership page to demonstrate that you have all the ducks lined up. Here are some key guidelines for listing executive profiles

• Each profile of the leader clearly talks to what they do in the company and what they are responsible for. If you are a product company let the profile show why they have done in the product space. All else like their other business interests should just be supplementary and if not required be omitted. Remember it is not a resume of the leader. It is their role in this company that needs to highlighted with a brief on their past credentials.
• Every profile name their should have a role they play in the company. CEO, VP of Marketing, VP of Engineering, CFO and CTO etc. In the absence of a specific person for that role, it needs to be clear that someone listed is responsible for those roles. Make sure each profile includes photos of the leaders, links to learn more about them through their LinkedIn profile etc. I would even enlist their email contact information for people to reach out. Give them more reasons to start a conversation with you.
• Have separate sections to list the Leaders of the company and Board of Directors. Customers will be first interested in the leaders of the company and then in Investors and Board of Directors.

Blog

In the current age having a blog where you interact with your stakeholders is paramount. A blog will allow you to share your thought leadership, company vision in a non-marketing-speak way. All top executives (CEO, CTO, Marketing) and other customer facing execs should blog. Blogs also provide the best way to build brand equity from readers and search engine perspective. Most companies struggle to create new content all the time. But it can be easily done if you follow these ideas. Here are some ideas for creating fresh content for your blog

• Information on Industry Events that you are hosting/participating in like webinar, tradeshow, user-appreciation event, free training etc
• Thought leadership on the challenges faced by companies in the space (not product speak)
• Customer case studies (preferably from the horse’s mouth via an interview)
• Tip/Tricks, Best Practices in using the product to generate the best value out of the investment in your product – keep generating day-in-a-life of your product user. Don’t publish product documentation or their fragments. Videos are better than text posts.
• Integration scenarios between product and other industry leading products (this will be lead generation for services and partners)
• Get partners to blog on their experiences in integration/selling your solution and lessons learnt.
• Sharing new BIG hire that company made. Ideally make a video introduction.
• Sharing any acquisition that company made and how it will help customers
• Product Roadmap – high level with ideas with business motivation behind them.
• Respond to other bloggers, tech news sites that make references to your product, company, execs. Good or bad. In case of bad, you better do it in a timely manner rather than let it fester on the internet.

For more ideas on what goes into the blog checkout my blogpost –  Online Marketing Anti-Pattern #2: Tis just another PR outlet

Press and News

This is one of the most underutilized parts of the site in most companies. Companies think having a Press Release with Businesswire or using some PR agency only constitutes press and leave this page blank. Here are some ideas

Press Release

• Every month you should plan have one press release – no you don’t need to pay for it. You just format in the way you would for a PR agency (internet has free templates galore) and publish it albeit to your own site alone. The idea here is to show activity in the company and give content to lot of PR aggregators who harvest PR content from  sites around the world.
• PR need not be some BIG event that happened in the company. Anything of moderate importance can be worthy of PR. Every new customer acquisition might not need you spending 500 dollars and running a Press Release through an agency. Just do a Press Release on your site.
• Any conference where one of the execs spoke is a Press Release or your executive being quoted is worthy of PR.

News

• Same rules applies here as PR. Every news item like a reference on a blog, tech news site about the product, company, executive, partner is a news item that can be linked on this site.
• To build a critical mass of news items reach out to those very sites to give an exclusive or interview. It is a you-scratch-my-back-I-scratch-yours relationship. More links to your site = more google juice.

REMEMBER !! No news is not good news in the world of marketing and technology companies. Conversely, amplifying nuggets of what is going on with the company always demonstrates the “happening” company.

Contact Us

Give people ample ways to reach you. Here are the common ways to allow them reach you

• Direct telephone number
• Create a form to send emails to you rather than specifying email address. Provide drop down of different reasons people might want to reach you.
• Twitter handle is another way to send you message
• Facebook and LinkedIn pages are other ways to get them to reach you but for these channels you also need to have more bandwidth to closely manage those interactions.

Products

Products page should be broken into specific solutions so the message can be simple and crystal. We might start with one product. Here is the general structure of each page

<Product P> helps you increase revenue by ……..

A screenshot of application or picture of people doing the activity that product helps with or process diagram

Using <Product P> you will be able to do ….. ….. …… …… ……

Frequently Asked Questions What is….. How is …. Where is ….

Quotes from customers “<Product> has helped us tremendously to optimize our business strategy ….” – Jon Adams, Chief Financial Officer, Big Company Inc “We were struggling with …. challenges …. and then we decided to implement <Product> and the results have been outstanding” – General Manager GE Medical.

Download the whitepaper that highlights to learn more about how <Product P> can help increase revenue.

Services

Each Service should have a separate page and provide details of the service and the why, when, how to avail of that service.

<Service S> is geared toward organizations that need … and achieve that ….

A screenshot of swimlanes, chevrons or picture of people who might need the help with the service or process diagram that depicts the service

What can you expect as part of the <Service S>? ….. ….. …… …… ……

Frequently Asked Questions What is….. How is …. Where is ….

Quotes from customers “<Service> has helped us tremendously to optimize our business strategy ….” – Jon Adams, Chief Financial Officer, Big Company Inc” “We were struggling with …. challenges …. and then we decided to implement <Product> and the with their <Service> we have been able to achieve …” – General Manager GE Medical.

Download the datasheet that shows the value delivered by <Service S>

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