Category Archives: Startup Marketing

Should you sell in person or virtually?

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This morning, a good friend of mine and I were having a conversation on the phone and he started to scold me. Literally! He does that with brotherly love though. So, nothing to worry 🙂

I mentioned to him that I am heading to Mumbai for few client interactions and he said that in today’s world I should make use of technology and do Video conference with potential clients rather than traveling every time. Not for anything, but as a bootstrapped entrepreneur and someone who is quickly burning cash, this is indeed very important.

I told him, “I agree, but for me, a personal connect is very important. It gives confidence to the client that this person is coming all the way and is real and has a passion to solve the problem”. This is the same way I look at wearing a blazer or suit whenever I meet a client. Many people asked me why I do that. It is to show that I am committed to the time they have given me and I truly respect that. My dress is a way to express my respect for their time and business.

Do you remember Barney Stinson from How I met your Mother? Suit up! And throughout the sitcom, he is the only one who stands out with his passion for suits and, you know it 😉

After the meetings in Mumbai, I now am more convinced that we need to make the first impression especially when you are building your product and getting the first clients on board.

What are your thoughts?

Starting up to Sell (S2S)

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In today’s world, starting a company, finding funding and taking products to market is not tough, but the toughest is to sustain the business. The moment your idea is out in the market, there are a hundred others who will bring similar products with different Business Models. As an Innovator and Entrepreneur, your success depends on how well informed you are about your competition and how deep you understand your product and domain itself.

You notice that big companies buy smaller ones to consolidate and also reduce their competition. This is the law of nature. We need to accept it.

As your startup grows not just in financial value, but in the Value Proposition of the offering and the market capitalization of the product(s)/company is what drives a potential acquisition.

One of my acquaintances was explaining his idea and business to me. It was a tech product and I asked him, where do you see yourself in next 5 years and his response was very clear “Similar kind of company was acquired by XXXX for Rs.XXXX, so, am working to find a buyer and wish to sell”. No harm in this approach, but you need to understand how you build your company to be acquired.

When you start a business wanting to sell it off after a while, the efforts are more arduous.

First, even though it is your idea and you feel this is the best the world can have unless you have convinced your customers/clients there is no value-add. After this, if you are wanting to sell, then you will need to identify the kind of companies who might be interested in acquiring you. After you identify, you will need to understand how you can stand out from the competition so that your potential acquirer looks at you and after they see you, you must present yourself to them (only after their invitation) in such a way that they should be  convinced that this is the best product for their portfolio.

Considerations and key metrics for building a Sale Strategy:

Articulate the WWH -If you have watched Simon Sinek’s talk on Start with Why you know what I am talking about. Very clearly articulate What you are developing, Why and How you are going to impact lives. When this clarity in the vision exists, it becomes easy for you to build your value proposition. 

Identify a good Value Proposition – The key to a successful company is its value proposition. The value proposition cannot be lame, but a real problem should be solved. For instance, Apple manufactures iPad cases with a keyboard, but if you notice they do not have a button on the keyboard for the function of double-click of home button the iPad, but still they sell more smart cases than the others who do. Logitech, for example, manufactures fantastic keyboards for iPad’s and they have a key for the double-click function. Why do you think Apple is not doing it? It is their product and they wish to sell more of the accessories, but even after these many years and so many people asking for it, they have not incorporated the key in the keyboard. Why? Because Apple’s belief is in simplicity. In order to go to home screen, all you need to do is press command+H, it does the job as the double-click does. And if you want to navigate between apps, use cmd+tab. Simplicity is Apple’s mantra and they will not budge, instead, they will push their consumer to adapt to their way of doing things. When more consumers adapt, it increases their value proposition. Simple.

Build a breathing Business Model – A Business Model is a blueprint of how your idea can solve a problem and how you can make money by solving the problem. What is a breathing Business Model? It is nothing but having an element of adaptability when circumstances change and the tough get going. Consider Google, Apple, Nokia, all major companies which have marked their presence in this world. All these companies were on the brink of collapse at one point of time in their lifetimes and only bold moves helped them recoup and stabilize.
          
Google never had a business model. They were a loss-making machine not knowing how to bring in revenue with searches. AdWords changes everything for them.

Apple almost collapsed before Steve was called back. It took just a year to conceptualize the iPod, but that changed everything for Apple.

Nokia is more than a 150-year-old Pulp and Paper company, how they adapted to the changing times and build a portfolio of businesses is what made them what they were.

The list can go on, but the most important aspect is that your business model should be able to breathe. Remember, none of the companies which I mentioned above changed their business model but instead diversified into what was valuable at that point in time.

Identify who can acquire you – Based on what you are building, identify who will be the most interested in acquiring you. The list you make might not be interested to buy you at all, but the list will help you understand what these companies look at. For instance, many Health-tech startup’s today look at being acquired one day, because the domain is a lot complicated than you can imagine. How do companies identify potential acquisitions? Apple recently acquired a Hyderabad based Machine Learning Startup. Without going into details (which I am not completely aware of), this shows that Apple is foraying seriously into Artificial Intelligence. Apple also made few AI acquisitions in the recent past. Do we know if the founders were targeting Apple? We don’t know, but this is just an example to understand what companies might look for.

Keep margins high – If you watch Shark Tank, you notice that the Shark’s jump into making deals with entrepreneurs who show higher margin’s for their products. Why? This will enable them to take the risk and also demonstrate you don’t have much competition. If you produce at Rs. 10 and sell at Rs. 12 (because of the competition), then you will really struggle to survive and also this means there is a lot of competition which is making you sell at a marginal profit. It is like earning Rs. 10,000 per month and then having EMI’s worth Rs. 6,000. The math does not match and you cannot sustain for long.

How do you achieve this? You achieve this by having good processes and a solid estimation methodology. This gives your investors a lot of confidence.

If you look at e-commerce companies, this is why they struggle. Even though their valuations are high, get a lot of investment, the only hope is that tomorrow something changes. It is a dangerous way to build a company, but today investors accept it and also you should be lucky to find a good investor.

Yes, all the points which I mentioned above are same for building a company without an acquisition strategy. However, the small caveat is identifying your future and being prepared for it. Honestly, building a company to sell is a bigger task and emotionally draining, because if you are not able to sell, you are stuck and you will be frustrated which will lead to collapse unless you are strong-minded and can take it forward.

In summary, it is double the effort in starting up to sell and hence requires more energies. I call this the S2S (Starting to Sell) Syndrome.

My personal recommendation is that you start with your ideas, look at how the market is responding and after your first-year financial filings, start evaluating how you might want to sell, that is only if you want to.

Position

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In the army, the Commander of the force should and must understand his position in relation to the enemy. Else, he will not be able to make the most efficient use of his army and his efforts will go in vein.
In the similar way, when you are out to sell your idea, you should be equipped to understand where you stand in regards to your competition. Else, you will make the wrong efforts which will only give you heart burn and end up in no or less results.
In developing our thinking skills, we need to understand what position we are in, accept our competitors positioning and then derive a step-by-step strategy to address what we need to achieve.
This comes with a holistic view of what you have available for yourself and how you position your skills to gain the advantage. For this, the first skill you need to embrace is visibility. As the Commander has a map of his battle field and identifies his and his team’s positioning, in the similar way, you will need to draw out a map of your competition and where you are in the competition. Only then you can have a realistic approach to how to tackle the market.
As an entrepreneur, along with giving wings to your idea, have a visible and realistic preposition of the market. This effort will give you unprecedented advantage to make your first win.

Focus on the Design – Startup Lessons

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When we have an idea, the next step for us to get it to the market at the earliest. Which is good, but not necessarily the wisest thing to do.

The key parameter in bringing any service/product to market is its present-ability, in other words Design.

Steve Jobs paid such attention to detail that even the smallest alphabet on the product is tested for appropriate printing. In a Mac, if you open up the system, you will find the list of names of all people who worked on developing the product behind the screen cover. No one opens and see’s what is inside, but that is the dedication they give for Design.

Design of the product/service should reflect the culture, vision and mission of the company. So, when you set out to bring out a new product, elucidate your core values, vision and mission statement and then begin the ideation for the design. Because, what people see is what they relate to about your company.

Toughest part of Idea Execution

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Few days ago, I met with a person who left his job in the US and came back to India to start up. His family continues to live in the US and he shuttles between the two countries every six months. His idea is unique and to both of our knowledge, he does not have any threatening competition as on date. The idea is good, it is self-funded and he is good with it for some time. Since his idea is a platform to bring stakeholders together and provide service, he is doing financially fine as of now.

As we spoke, I asked him what was the toughest part of bringing his idea to reality – convincing family, Money or signing up people? He smiled and said “Marketing”.

He is correct. Having an awesome idea is just not related to the functioning of the brain and connecting with people, but to market the idea to the appropriate stakeholders.

In a startup’s context, Marketing is just not about showcasing your idea to the world, but it is the art of showcasing the idea as it connects to your potential clients.

Marketing fundamentally needs an understanding of what your client is wanting, what is the value proposition of what you are offering and how the offering is positioned.

When Radio Mirchi (98.3 FM) was born way back in 2000, the biggest challenge for them was to make listeners tune into their frequency. No one was switching on the Radio at home or in the car. At this time, Radio Mirchi focused on playing English music which was considered hip and cool. During the time slots of 7 AM – 10 AM and evening between 5 PM – 8 PM, they played English music and slowly people started tuning in to follow the trend.

When an idea is conceptualized, we need to first create our offering in a way such that clients would come to us and then we can build on what our unique proposition is.

Thinking for the ‘app’ markets

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In today’s world, startup’s are focusing on utilizing technology to bring in elements of convenience to the end user. Strategies for market penetration and consumer usage (downloads) have evolved over the period of time.
Few elements of marketing have remained the same and will do so.

Word of mouth marketing has a lot of value. Have you tried using this product? or have you downloaded this app? makes a lot of difference. I would like to use something which has been tested by someone else. In the pre-technology era, advertisements made a good value. If Nirma has become a household name, it is only because of its advertisement in the TV.

In the technology space, we do not see a lot of advertisements on the TV and a few in these days are utilizing the power of radio. Most of the ideas and apps still go with a word of mouth or sometimes a mention in the media.

Apps do not have market segmentation – they are same for everyone. If someone drives an Audi, BMW, Volvo or Jaguar, we identify them differently when compared with someone who drives a smaller car. In the technology space, you cannot differentiate between someone using Uber or Ola app.

One of the biggest challenges for tech startup’s is understanding their consumer needs. Very few companies actually do survey’s and understand the user preferences and then build their application.

Traditionally, market surveys in the ‘target’ market segment helped companies to identify what their consumers want. Even in the tech space, few companies do the market survey, but these surveys do not cover various geographies. If the startup is based in Bangalore, the maximum the survey’s reach is to the metros and smart cities where people are using email or The Internet. But, there is a lot of population who do not see the email or cannot use the internet to answer questions. For Tata tea to become number one in the country, they had to understand the taste of tea in various parts of the country. In UP, people preferred large granular tea where as in Orissa people preferred the fine tea dust. The taste’s are different and so, the company had to innovate and bring out a different category in the product to ensure maximum reach. How can we do this in the technology space?

I don’t think there is a formula to understand this. The market time for technology product is few days or months and for a goods companies, it is months or probably years. So, it is very important for them to do the survey’s and get their product right. In technology companies, if uses complained, then they can immediately make changes to their design or functionality and roll out a new release.
Is there a formula to get the app right the first time? It is time to Think…