Posts Tagged ‘Business’

Startup Mantra I – Solve Real Problem of Your Customers

How often do you hear a technology startup is a cool place to work because one can unleash her innovative brilliance without much questions asked?  Many successful technology companies, including Google have legitimized this work culture by giving employees a free reign to work on their ideas during office hours. However, I think Google manages their process much better than a regular startup on the street as many of their ideas survive to see a day on the internet. Albeit most fails! Why does innovation fail so often in startups?

A good friend and a budding entrepreneur Pete talked about some reason for it in his blog. He says that a startup is an organization working to deliver a service or product under conditions of extreme uncertainties. The uncertainty is not only in terms of the right solution but also the right problem for a startup’s customers. Pete had a point that many a times the problem itself is not very well defined, which makes the discovery process even more challenging. In my experience, most entrepreneurs can speak at length about their company’s solution but very rarely about the real customer problem they are solving. Why is it?

As a product manager, I am trained to uncover problems our clients face so that we build products that our customers will buy happily. Market research, client interviews and fact base creation are regular tasks for a product manager. The first lesson a product manager learns is to never ask a client about their desired solution but the problem they are facing. Mostly clients cannot articulate the solution but can talk at length about their problem. The question is how many startups go through this discovery route to find real problems of their [potential] customers?

Many of you might be aware of now popular Lean Startup methodology that encourages companies to unearth customer problem cheaply and quickly. Eric Reis, the inventor of Lean Startup term has been marketing his methodology aggressively and many entrepreneurs are embracing it. We also adopted it at our startup and decided to launch our first prototype for less than 1/3 the original cost. The idea is to test our hypothesis with a limited product and a controlled set of users to get an early feedback. These are still early days of our lean startup but we are already seeing the benefits of laser focused minimum viable product and longevity of our budget. We will know our fate soon [hopefully] but either way I will keep you all posted. Go lean budding entrepreneurs and solve your customers’ real problem!

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The Second Coming of Technology

Success has a lot to do with timing. When I graduated, it was almost the end of the technology boom of the 90s and we saw one of the worst periods in software business in the next few years. While the technology industry was struggling, boom was happening in finance. Most of my batch-mates who went on to do MBA and landed jobs in investment banks quickly rose to senior positions while raking in big bonuses in the first half of last decade. No boom lasts forever, so finance crumbled in last few years. However, boom does have a tendency to reappear and it did–once again in technology. Internet companies are seeing another dream run but this time muted in PR albeit sky high in valuations. How are you participating in this wave?

Marc Anderseen, the founder of Netscape and now a legendary venture capitalist, wrote an op-ed in Wall Street Journal on why software is eating the world. In his article, he made the case for pervasiveness of software in all industries and in many cases software-based business models trumping the old models. My enthusiasm doesn’t scale the same heights as Marc but I agree with his point of view. The software industry is one of the fastest growing and highly profitable with long-term sustainability. The current boom is second coming for software companies. This time they have real business models, revenues and profits with the same agility and ability to start with minimal cost. The technology entrepreneurial dream lives on!

Internet pervasiveness and mobile device explosion has provided a robust platform to Internet companies to realize their unfulfilled dreams of the 90s. Innovation is happening at all levels of the stack–hardware, devices, OS, delivery, software applications, and consumption. Apple and Google are changing the way we stay connected and consume Internet, datacenters are building backbone of the Internet, cloud companies like Salesforce are providing anywhere access to business information, social networks like Facebook and Twitter are enabling constant contact, and many more. The good news is you can participate in this boom irrespective of your technical skill set. So don’t wait–the timing is just right!

Interesting Idea But Failed Startup!

Entrepreneurship is the heart and soul of the great American economy. It is a fact and manifests itself in so many successful and not-so-successful startups, self-made billionaires and success stories. Most of my friends and acquaintances are either running a startup or planning to start one. These folks are highly educated, successful in their fields and very ambitious. I am sure this is not unique to just my limited network but a typical story of an immigrant community in America. While a startup is a great way to unleash one’s potential, I am surprised how much of it hinges on the next great “idea”. Most people consider idea and startup as synonyms especially in the technology industry. I keep hearing – “I have this great idea” or “Do you have a good idea? We can make a business around it”. I wonder how much of a successful startup is about a great idea.

The biggest risk with a startup is to not find a viable business model. Since most start-ups are genesis of an idea, they generally lack a sustainable business model at least in the beginning. Startup failures galore, the rare success stories are full of mid-course correction or stumbling upon something different while working on the original idea. I believe it is not an “idea” but a “market-validated idea” that should be the basis for starting a new business. It is easier said than done as most of the time it is not easy to articulate the concept in early stages, let alone validate it with potential clients or markets. However, this is not a reason to cut the process short. It can save entrepreneur toil, frustration and lost capital on a promising yet non-sellable idea.

I recently learned in a “pragmatic marketing” training that “your opinion is interesting but irrelevant”. I thought it summarized the idea-based startup thinking very well. Everybody has an opinion [read idea] but is it worth launching a business or a product around it? Only a factual research can confirm it. There is a reason that early-stage business cases have sections on market research, sizing and potential customers. A thoroughly researched, market-validated idea is certainly worth taking a dip into the entrepreneurship ocean. Otherwise, it doesn’t hurt staying on the sidelines and enjoying the sun! So next time when you hear a cool idea, ask how many potential clients also found it useful.

Get to the Point – Have a Fierce Conversation

Communication skills are the most difficult to master and key to success in personal and professional life. I am still on the borderline if it is an acquired or a native skill? I am fortunate to have some great communicators in my professional network and friend circle. They are great story tellers, suave talkers, and interesting conversationalists. I am always mesmerized by such people and look for their secrets to learn and improve myself. However, unlike mathematical equations and scientific facts, there is no one universal style that one adorns to be a great communicator. Everyone has a different way. I am a straight shooter and like to communicate the way it is. I always wondered if it was the right way! Then I read a life-changing book – “Fierce Conversations” by Susan Scott.

The core idea of the book is how most conversations in both business and personal lives are fake with participants avoiding to discuss the “undiscussable”. I found the idea of laying out the issue on the table in first sixty seconds and having a constructive dialog around it to be profound and a game changer. It is simple yet seldom followed conventional wisdom. The example of a tough feedback session generally starting with appreciation and “fake” praise leading to a queasy topic is common place at work. The recipient can sense the negative undertone in praise and wonder what is going to hit him next. Now turn it around and imagine if the same session starts with a candid feedback but with the intent to discuss it honestly and constructively to help the recipient.

I followed this principle in a recent meeting with a very difficult client. This client got into a habit of raising trivial issues to our senior management and complaining about everything. In our call to resolve a recent issue, I asked the client if there was more to this issue that we are not hearing. I told them how much we appreciate their business and want to make them a happy client but can’t achieve it without learning and addressing their real concern. At first the client was struck by my candidness but she quickly opened up to tell us how communication failures in the past led her to directly raise small issues to our senior management to grab our attention. Imagine how much time we saved with this insight! We now have a decent chance to make them a happy client by fixing this problem.

I haven’t yet found the magic potion to be a great communicator but by following some of the advice from the book I will certainly become a better communicator. Simple ideas such as avoid loaded statements – sugar-coated and irrelevant statements, replace “but” with “and”, and use silence in conversations are highly effective to make any conversation thoughtful, and worthwhile. Stop me when next time I try to take a long winded road to my point.

Wish you all fierce conversations!

Techie to CEO Step II: Unleash the Salesman Inside

Sales is the king! I used to hear this phrase all the time and ignored it as a conventional wisdom not applicable to the unconventional technology industry. Isn’t tech all about innovation and cool products? Don’t cool products sell by itself? Products that people line up to buy outside your stores or online. So engineers should be kings and not sales people. After a decade, I am proven wrong.

I am absolutely convinced that irrespective of the industry, sales is the lifeline of any business. Nobody cares how cool your product is if it doesn’t sell. A business is not a viable business if it doesn’t make money. We might consider Apple and Google as exceptions but really they are not. The fact that both are public companies and measured by their financial results speaks for itself. Google is widely known as an engineering centric company but the recent news of their head of engineering and head of sales making the most bonuses indicated the balance of power. We all know how much other software giants like Microsoft, Oracle, and SAP are driven by sales.

Ok, we know it’s all about sales, but what should we (non-sales) folks do? The lesson I learned is to align yourself with sales if you are not one of them. I am not suggesting being subservient to sales but having your actions help close the deals. It could be as simple as dropping a line about your competition or delivering a product demo, but make sure you are closely aligned with this function. There is a salesman inside all of us; unleash it to magnify your potential.

 

Techie to CEO: The First Step

I spent the better part of my career in technology function, mostly developing software.  It was exciting to write the most efficient program, design complex solutions, and manage large software projects. Even though I always thought of myself as more of a business person, I never paid much attention to the commercial side of technology. The techie inside had a simple business logic–customers will line up to buy the best software. Of course, I was entitled to be paid because I could write the best program irrespective of company’s performance. Then, I moved to presales and it changed everything!

Two years of selling complex software to fortune 1000 companies and working with sales and marketing was an eye-opening experience. The realization that it is not the best software but the best-positioned solution that sells was startling. Customers didn’t care much about algorithms in the software, but how would it solve their business problems and deliver value. Total cost of ownership, payback period and return on investment calculations didn’t factor in the most optimized program or complex design. While software features were important, it was relationships, sales presentations, product demos, and managing client expectations that were critical for a successful sale. Sales and marketing folks–often perceived as “more talk and less substance” were the front and center to close deals and bring money to keep the lights on.

I still believe that development is a very important function of a software business but now I also understand the importance of the commercial side. It doesn’t surprise me when a developer boasts of being the heart and soul of the business while thinking of sales and marketing as just the face. I was in the same boat a few years ago. It is easy for a techie to ignore the importance of sales and what it takes to acquire a client. Most software companies intentionally isolate R&D from business realities, thereby making it even more difficult for technologists to understand business realities. However, if you are a techie with entrepreneurial aspirations or an ambition to grow into senior management, then start learning about how your business sells and makes money. Your superior technical skills definitely make you indispensible for the company but your sales skills will grow you into top management ranks. A strong technical expertise coupled with great business skills is a potent combination. Remember, it is money that makes the world go and your career.

 

Play To Your Strengths & Collaborate On Your Weaknesses

A few weeks ago, my mentor and I were discussing the path to leadership over a great French wine. As a usual mentee looking for pearls of wisdom, I asked him how to overcome my lack of storytelling skills. He candidly answered, “Get a storyteller on your team!” His point was to build a strong team with complementary skills and play to my strengths.  I was surprised by his simple yet profound response. I understand teams are important for business but can one really outsource ones weaknesses to others? By the way, my mentor is a great communicator who can handle tough situations with ease.

Since I was aware of the “team” thought, somehow everything at work and outside work started manifesting the importance of teamwork and complementary skills. Recently, I created a new pricing for some service packs. A finance person helped me put together the pricing model. While I struggled with formulas in excel, for him it was the way of thinking. Sales operations pointed out challenges of bringing this structure in our quoting tool while client services were happy to see standard low rate that clients always wanted. Marketing was thinking of how to communicate the benefits, while the CFO questioned the revenue loss due to price drop. No matter how good I am with numbers and business concepts, I can never think of all these aspects in a given time frame. But a team with complementary skills can cover all bases!

Fine, it makes sense to have a strong team for great execution. What about the teamwork? Can everyone work in a team? I used to manage a large team of developers and loved it. Now, I am in an independent but cross-functional role, and it is challenging. I always admired my CEO for his great communication and business skills. However, I realized that his greatest strength is working with a team. He is a really smart professional with great business acumen, but he hears everyone and respects their opinion. He brings the best in his team members – finance, marketing, sales and technology – uses his smarts to articulate a coherent strategy and delivers it to his audience in a simple yet interesting way. He is not expert at all business functions but functions like one with team power!

As always, it was enlightening to meet my mentor. I walked out high on a great wine and tip on team work!

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