Entrepreneurship


This morning, I was talking to a friend of mine who is doing his Executive MBA. He was mentioning during the conversation that one of his friends is really bent on joining an analytics company and his interest levels in that are very high. Apparently, he has tried with most known brands in analytics and he hasn’t been lucky due to various reasons.

On hearing this, I casually mentioned why doesn’t he look at starting a boutique analytics firm and he can target the small retail units. I really wasn’t talking about the largest airline companies or retailers or the software companies of the world. I was talking about companies that can act on the findings immediately.

In fact, this is going to be the next wave and there are already a few established players and as a necessary evil, all the top IT services companies are setting up a practice to tap into this space. I believe with India as the market, it would be the boutique firms that would win the business, for they would be cheaper and make analytics actionable with the local market knowledge that they have. To top it, analytics requires knowledge about Mathematics, Business and Technology. India has the knowledge in all the three areas and also the scale.

Time for the analytically bent to start the boutique firms.

Ever since I started shopping at flipkart, I stopped visiting book shops. Flipkart is one site that I visit at least a few times every week and the size of my wishlist keeps growing. I have been absolutely fascinated by the experience of the site. Initially, they were peddling only with books and with time, they started dealing with mobile phones, electronic items etc. with some fancy advertising like 30-day money back guarantee. This is what I call an elaborate exercise of ‘chewing more than you can bite’.

As it is, the retail market for books is big and getting bigger – addressing this itself would mean a number of challenges like procurement, vendor relationships, logistics and payments. Add to this mix, the other products and we are multiplying the challenges by at least another 3-5x times. Looks like, they are bent on addressing all these challenges and coming out trumps. This in the short run will certainly increase their cash flow and would sound a great strategy, however in the long run they are bound to lose focus. This is only my assumption at this point and it can be disproved but the chances I foresee are slim.

In the last few weeks, I have been having issues with flipkart where one of the books that I ordered after seeing the availability did not get delivered. Initially, I received a mail stating that they would need 3 more days to process it. After 3 days, I was told that they are sorry about having not delivered and they don’t seem to find the book in any of their procurement channels and they cancelled the order. Today, one of the deliveries got messed up – the invoice details are right but the wrong book has been delivered. Cracks have started to show now in the efficiency and what appeared a winner through ‘word of mouth’ publicity is becoming messy with expensive advertisements and whole load of products.

Maybe, I am over-reacting here but could it be a classic case of lost focus? I keep my fingers crossed on the verdict and my take would be – the earlier they hive off other products and manage just books, the better it would be.

I was talking to one of the SaaS vendors and he was mentioning that their Sales & Marketing expenses were 75% to 125% of their new sales bookings. He was also mentioning that anything below 75% and anything above 125% is considered to be danger zones. I was relating this to one of my earlier posts on this “To SaaS or not to SaaS – An ISV’s perspective”.  In that post I had dealt in detail as to why ISVs may not be going for SaaS discounting the benefits of moving to SaaS.

This high percentage of Sales & Marketing expense adds another dimension to ISVs possibly not wanting to move the SaaS way. For them to be successful, it becomes extremely important for ISVs to ensure that their sales and marketing is cost-effective, for which they need to have extremely good visibility on their sales funnel and ability to predict and forecast accurately. Additionally, they need to identify metrics that would be able to measure the returns on every program that they do in the mix. Keep what brings revenue and throw what doesn’t in your marketing mix.

This also makes it necessary for the ISVs to have access to quality funding that will allow them to do increased sales and marketing spending towards achieving breakeven and eventually profitability. As more and more customers seek SaaS, this may not result in a level playing field as big platform players would be better positioned to offer them as opposed to non-funded setups. Else, you need to have substantial legacy revenue for you to easily move the SaaS way.

I’ve started writing a book on ‘how do you get your customers to buy your product or service?’ specifically with the B2B segment in mind. My writing is going to be based on the following, though not in the same order:

1. My writings will be based on the work that I did – with more focus on what one shouldn’t do rather than what one should do

2. I strongly believe in the fact that there is no such thing called the ‘right way to market’ – it would speak about the experimentation that is required and how to keep it low-cost

3. New age marketing tools like Social Media Marketing, buzz marketing etc.

4. Why is it so important not to lose focus on traditional marketing principles; for instance, value proposition and positioning statements remain sacrosanct irrespective of the medium that you choose

4. It would also have templates that would allow one to do their marketing plan

5. It would have practical examples with which one can de-risk their marketing intiatives

6. Series of interviews with marketing practitioners from different settings. These would also be covered in the book

7. Lead generation techniques, lead nurturing techniques and  its effectiveness

8. Thought leadership – it certainly is about thoughts?

9. Marketing ideas that you can take and implement immediately; ideas that wouldn’t take you more than 2 minutes to start implementing 

10. Taking it out of social marketing, specific focus is going to be on twitter – I am going tweet about this book as well effectively

I’d appreciate your comments and also appreciate inputs on what you would like to see in this book.

Social media is gaining popularity is stating the obvious. It has in fact become so disruptive that it is affecting businesses, and I want to take the example of Recruitment consultants. Their main revenues was in finding talents that hiring managers can look at.

What has happened now with the growth of social media is, internal recruiters of corporations have started using sites like facebook and linkedin, over and above the job portals and are able to scout for talents very extensively. This has put the brakes on these specialists whose ability was in identifying talents and qualifying them before the hiring manager gets to see them. Now this is getting compromised and for the recruitment consultants to survive, they need to re-invent themselves and start focusing on verticals, level of hire, headhunting etc. and you cannot survive by being just another recruitment consultant.

Social media is here to stay,  and for good enough reasons, it is helping individuals and companies in their pursuit. At the same time, it is pushing the limits on traditional means of doing business.

There is an exciting event siliconindia is organizing on June 6th (Saturday in Bangalore). It’s by far the largest and most exciting event of its kind in Bangalore.

It is your chance to know the building of companies like rediff.com, naukri.com and tejas networks as their founders come and share their journey with us. Additionally there will be 100 most promising technology startups showcasing their products. You can meet these entrepreneurs and also over 40 investors. To attend this event, register free at http://www.siliconindia.com/startupcity_09/index.html

Adding a few more:

  • Watch live product demonstrations
  • Get a peek into cutting edge technologies
  • Lay hands on the best-of-breed solutions
  • Meet young, energetic and passionate geeks
  • Experience the culture of innovation in small companies
  • Visionary keynotes
  • In-depth panel discussions

Time: 8.45 am to 5 pm; Date: June 6, 2009, saturday; Place: Nimhans convention center, bangalore (near dairy circle)

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