Product Companies must focus on building their products and not run services!

This is one of the posts i wrote for Money control’s SME Mentor section! View Original Post. 

I have been interacting with many startup founding teams. Some of who have been building their product and are running a services outfit along side. Their point-of-view is that the services arm of their company will fund the product part of their venture.

Now, I am not against the idea of running a services company. I also buy the logic of startups bootstrapping & doing small-time consulting gigs or taking up short term projects to earn some revenues. Though, what bothers me is, product startups getting sucked into the services rut.

Let me list a few scenarios that I have come across to bring forth my point:

1. Two people come together to build a web-product. They brainstorm the vision for their product company. Figure out what they want to build initially and realize that they need some working capital to build a team, do marketing, etc. Also, they find out, what they have saved for this venture will not be enough to do all the above. The result – they decide on taking up services as a part-time effort. But eventually, the pressures of external commitment & delivery take major focus. Finally, product is sidelined & they continue to live-up to the services commitment.

2. Two people come together to build a web-product. They figure out what the initial plan of action should be. They realize they need more working capital, one guy opts to running the services part of the venture. The other guy begins to build the product. Eventually, the guy doing the services feels more important as he’s bringing the money in. The Product guy has a different point-of-view. The result: Either things fall apart and they part ways or the product guy is forced to shut shop and join the services part of the venture.

3. Two people come together to build a web-product. They calculate the amount of money they have for this venture. They work backwards to figuring out what they can achieve with the resources they have. They plan on building a minimum viable product and get as much usage as possible before they run out of money. They also plan on reaching out to friends and family to raise more money, once their product is launched, as they do not want to distract themselves right now. As Plan B, they will take on freelance projects for a few hours, if need be to make some money.

All the above scenarios are what I have come across during my interactions with startups. My advice to them is always: Focus is very important for a startup. Any distraction that has a tendency of slowing down your progress or distracting you from achieving what you want to do or are passionate about is best avoided.

Running a services arm is the most obvious thing to do, as it suddenly makes you profitable. But this path needs to be taken carefully. There is a danger of getting sucked into what you don’t want to do.

Scenario 3 is what I advocate. I have seen startups tread this path and have managed to either start making revenues from their product or have managed to infuse some money from friends and family based on version 1 of the product. Now, the choice is for you to make!

3 Keys to a successful startup: Engage-Build-Sell

Choosing what to focus on after getting started can be rather confusing for the startup founders. In most cases founders lose out on crucial time, right after starting, by focusing on wrong  things like fund-raising, team building, deep market research, building a fully functional product as their first release to go public!

When a startup gets started, it should have 4 things:

1.       A founding team (or a founder ) committed to making things work against all odds

2.       An important problem that impacts a significant set of customers, and hypothesis for the potential solution(s) that needs to be proven right or wrong

3.       Have skills to hand-create solution to the problem, combined with the initial subject matter expertise in the domain they are working on

4.       Some basic money to survive and work on the problem / solution

The above ingredients are usually a resultant of:

·         An ‘ah-ha’ moment of finding the right idea / problem to solve

·         A natural coming together of a team which has one main goal – solving the same pain-point

Once the problem to solve is identified, the team should spend time in figuring out the best way to executing it. So where does one start, anyway?

What to focus on?

When a team gets started, there are far too many things to take care of. Focusing on things that do not matter may happen unconsciously or unintentionally. The one guideline that perhaps will help in choosing one task over the other maybe in asking the question “How big is the impact of the task I’ll do to the lives of my potential/existing customers”. This is true not just for teams that are starting out, but all startups across (even helpful for executives in large companies in prioritizing their tasks).

Simply put, a startup should not spend anytime in things that do not impact its end customers / audience, as getting their attention and making an impact early is important.

Broadly classified, early stage startups should focus on only 3 things and keep the customer in mind at all times:



·         Engage: It is important to engage with potential customers to convert strangers to friends. First, think of who these potential customers are going to be. Every section of potential customers will have an early adopter category. These are people who are quick to use a product that seems useful, quick to give feedback, are largely forgiving and have a sense of what else is there in the market in the same domain. These are also influencers who will bring other users to your product. Look for such influencers in the potential customer segment you are going after. Reaching out to them, engaging in a dialogue will help in building a community that is listening to you or giving you attention, even before the initial product is launched.

How do you reach out and start a dialogue with them? Today, there are various cost-efficient or no-cost avenues of reaching out to strangers and making friends. Startup teams can simply start with their own blogs & establish their authority over the problem they are trying to solve. Social networks, micro-blogging sites and relevant online / offline forums are good start points to engaging the potential customer initially. Let the communication be focused to reach out to a few, strong followers. Do not spread thin. It’s not about spamming a list of email ids; but reaching out with your thoughts so that people who are interested will organically engage with you.

A startup building efficient ways of securing servers for businesses can engage with their potential customers by organizing seminars or events that teaches people how to secure their servers by themselves or how to pick the best tools for that job.  These events should be designed to give the potential customer a lot of value. This will lead to building of confidence, trust and respect about the product/brand/startup in the minds of the potential customers. But, at not point should these avenues be used to sell directly. The idea is to influence and hog larger mindshare, so that they pick you when they have to make a buying decision.  Like how McDonald’s is for burgers!

·         Build: The first version of the product/solution that a startup will build must be something that aims to solve an important / acute problem for a specific set of small potential customers. It can be incomplete or imperfect. What is built can be a small part of the large problem the startup is trying to solve. But, it must be something that can be executed quickly and with the resources available within the startup team. It’s important to build and push out to early adopters.

The scope of the initial product must be narrowed down to a very myopic level. This minimum useful product must have one compelling reason for customers to use it. If it’s scrappy and looks alpha-like its fine (in fact the early adopters prefer it that – so that they can help you polish it). 

Remember using the initial versions of the internet? Connecting the modem to a telephone line, waiting for dial-tone, dialing in multiple times before it gets connected! As early internet users, we had all the patience of dialing a hundred times and endlessly waiting for pages to load – only because that was the only way to connect to the internet!

·         Sell:  Once you have a quick and dirty version of your product ready, reach out to the customers you’ve engaged with and sell it to them. Here sell does not necessarily mean in exchange for money; it also means getting end customers to use your product. It is important to get as many customers to use your product to get constructive, relevant feedback to build on the next version. 

It is important to start selling early. To reach out to potential customers, pitch them the value proposition, sign them up to use the product / solution. The earlier a startup does this, the better, as they have real audience to validate their product and give feedback.  

Though there was multiple email applications, most of us flocked to get beta invites of gmail. This was because google had engaged with us and had enticed us enough for us to get wishful about the ‘invite only’ gmail.  Or do you remember signing up as a test user for any of the products in the market today? I am sure you’ll be able to relate to the value that test users like you could provide to a product that’s being built.

The above 3 things are always iterative and can work in parallel. Engage while you Build, Sell & Engage.

In all building a great product is a slow, iterative and painful process. It’s important to believe completely in what you are doing, when you get started, but be agile and keep an open mind to change as you go along. Focus, Engage, Build Quick, Interact, Sell, Get users, Engage, Build again, Sell again, and Repeat all. 

Note: This post was written for Silicon India, sometime in July 2011. You can find the published link here.



World Diabetes Day – Did you check your blood sugar today?


The “age factor” compels you to do a few things, one such in my case is the urge to shed that extra fat and stay fit. So, i’ve been at it for a couple of months, but have always had a problem measuring my efforts towards that end.

Last week, Namit, Varun, Himanshu – founders of LifeMojo, one of MVP‘s portfolio sent me a test link to their B2C platform – Here you can not only assess your current body and lifestyle “health”, but also plan and track your diet and exercise schedule. These guys are in a pre-release mode and will open to users shortly… i’ll update my blog when they release, its a great tool to try out, if you are health conscious, a health freak or just concerned about over-weight. I know that they are also going to add tracking tools for preventive healthcare, such as diabetes and blood pressure.

Anyways, the best thing i liked about these guys is that even if they are in pre-release phase, fixing bugs and all that – When i logged onto this morning – i was totally impressed. I saw a little note on World Diabetes Day on the homepage. When i logged in it also showed me a little reminder about getting my blood sugar tested… So, lo and behold – i promptly got to the hospital near my house in the morning and gave my blood sample to get my sugar levels tested! This, i have been procastinating for a while, though my doctor had suggested i get it tested, considering the family history of blood sugar there exits.

Thankyou LifeMojo!

Change, old pals and a come back…

It’s been a while since I wrote anything in here. Between these few months, a lot has changed. Yes, change is inevitable and change is eternal, as one may quickly point out, but change is very personal and subjective too, as I’d like to point out. So, here is a personal account of change, as I witnessed it.

As I was saying, the past few months, I’ve seen a lot of changes. Amongst many other things like the change in seasons, change in time zones and environment, I am no longer an entrepreneur, but an entrepreneur on a vacation. As part of change, I have witnessed unexpected people act in unexpected ways, devils turn angels and angels turn devils, and trust towards mankind re-enforced. Evident changes that depress me sometimes, about my hometown, Bangalore; changes in broadcasting trends – with localized content playing on FM radio – things I read as part of the future of media while a student; technology integrating various communication modes to enhance experience – google, it integrates various functionalities very intelligently, I love this change, where I can check mails, chat or talk with that person online if I want to, or still leave a scrap on his orkut… Ah! And Orkut, I like the fact that I’ve been able to connect with most of my long lost friends on this social networking site. I guess what makes it tick for me is the scrapping feature, where I can leave a quick message for a friend and the friends section. And a small confession, I love to read up all the recent scraps of my friends and look up their friends list – I’ve found a lot my friends by snooping into other’s contacts.


So, that’s all about the change and other things in the interim period of hiatus. Hey and not to forget, orkut helped me with resources for one of my projects… who ever said this community thingy is mindless… I fie you – wake up and get real… it’s the world of technology and connectivity, get on the bandwagon – conservative minded and old fashioned!