Archive for April, 2013

Customer Retention Strategy

As a start-up CEO, it is important that you build this strategy right at the outset, because this is a smart way of growing your business instead of just adding new customers. Ofcourse, getting new customers is critical to your business growth because it ensures a bigger market share and more endorsements for your product. But customer retention ensures additional business at negligible costs. So how do you do this effectively?

Three things that are critical to your customer retention strategy are:

Deliver Top Quality Service:

You may have built the ‘best’ service delivery process to ensure top quality service. Constantly question that process and find ways and means to better it all the time. Use every customer learning to change your process for the better. Anticipate what the customer would want and deliver it without being asked. Make your service delivery process more customer-centric. All this may come at a cost. But rich dividends are ensured in the long run.

Deliver on your Promise:

For a young enterprise, building credibility is not only the biggest challenge but also a constant process. If you can get your customer to speak for you, you will have people listening. But for this, the customer should have got what he expected. What you promised. So, promise only what you can deliver and deliver what you promise. Irrespective of great service delivery, if the customer does not get what you promised, you will still have an unhappy customer.

Build Competitive Barriers:

Use your customer learning to better your product all the time. Come up with new functionalities and features. Know what your competition is doing and ensure your product delivers one better. Building complimentary products and features around your product will ensure recurring business from your customer as well as keeping out competition.

All these will help in increasing the Life Time Value (LTV) of your customer leading to rapid and predictable scaling of your business.

The author, Srikanth Vasuraj, is a Business Consultant focused on helping start-ups to grow. He can be reached at +91-98454 78585 or srikanth@nodiva.co.in . For more information please visit www.nodiva.co.in .

The Risk-Averse Indian Entrepreneur

Indian Entrepreneurs are one of the most risk-averse in the world. Well not all, there are truly some fantastic exceptions, but most of the demographic is risk averse. Let me explain:

In the business plan of an entrepreneur they do the math, calculate “their” salaries in, the prototyping costs, marketing costs and will assume that “no revenue” is made, and ask for the entire amount from an investor, who has nothing more than an idea and a team (which still demands a salary) that she supposedly has to back. The best pitch for an investor remains the same, Get on the boat, start rowing, and tell them to come onboard or miss the chance.

A lot of the new breed of Indian entrepreneurs have no clue about cash flow management. Its another symptom of the “Bangalore Flu” (that we have caught from the valley). Here’s an example of cash flow management. Air Deccan was started with 5 Crores (1Mn) in the bank. The cost of a Plane is about 60Mn$. The company went on to build the biggest fleet of low cost carriers in the country.

The Present day entrepreneur wants to plan for a fleet of 500, and the cash for it, upfront, at the best valuation, in the bank, funded by VCs. NOT. GOING. TO. HAPPEN.

Want to see who is driving the risk averseness in the market that Indians dont make bold bets? Look at the mirror. It starts with (most of) you.

Will Delhi startups outsource tech to Bangalore?

Delhi NCR seems to have emerged as one of the strongest startup ecosystems in the country. From internet to mobility and ITES/BPO/KPO, the quality of startups is compelling. However, of late, there has been a view that the tech ecosystem is not keeping pace. I was having a chat with a friend, who pointed out the following “facts”:

  • HasGeek is been doing some amazing work in tech events…they are probably the leaders in the tech. events space. They tried NCR couple of times and now have written off. I’m trying to work with them to bring some of their events in NCR.
  • In50Hrs has written of Delhi. They did 2 events and now have moved to Trivandrum.
  • MobileHackday – a hackathon done recently at one of the companies in gurgaon did not attract many people…they had to close the event and did not even have the jury members to come and look at the prototypes.
  • At Startup Weekend Delhi, there are around 12-14 ideas presented…atleast 8 teams present a powerpoint presentation and probably 4 present a prototype…Bangalore is just the opposite.
  • Some startups have started moving the tech. base to Bangalore :)

I have not checked with respective organizations mentioned above, but will take this at face value given the credibility of the person who mentioned the above. Also, given the spread of events, I am making an assumption that this is not a reflection on quality of individual events. I also do not view this as a notion of delhi versus bangalore, but more an issue around the depth of tech ecosystem in delhi area, and whether it is growing stronger or weaker. I say “tech ecosystem” not in the semiconductor research sense, but typical depth that startups are relying on (application/ systems level).

In fact, the other thread it sparked in my mind was cultural and cutting across the country – are we propagating a culture of startup formation that relies on learning from the community and widespread exchange of ideas? That could be the other reason where founders and their teams might be putting their heads down and building their business, rather than throng events.

Would love to get comments on this. And if this is a real issue, what can we do about it.

Captain your Ship

As an entrepreneur or the CEO of a start-up, you need to clearly take the lead position, as it is your vision and mission that the team has to take forward. Not all CEOs of start-ups have the experience of leading an organization. But you don’t need to let that inexperience reflect in the way you deal with your people.

Build your ‘A’ Team

This is the most important task that the CEO has to put in place first. Choose your team for the special capabilities that they bring specific to your business. People with domain expertise, with experience setting-up new enterprises, experienced advisers etc. Use them to implement your ideas. You may not have all the attributes to run a business entity, but your team will. Have faith in your team. Allow them to make mistakes. Give them time. No business is an overnight success.

Set up a system for review and accountability

The CEOs job of managing his team becomes easier if a clear set of KRAs and milestones are set for each member and a well-defined periodic review process is followed. This will ensure accountability and adherence to timelines.

Communicate your ideas clearly

This is one area where a lot of business heads fail. Sharing of thoughts and ideas about the business with your team is important as it will serve two purposes – (a) they will know that you are on the job all the time; and (b) it will give them an opportunity to share their opinions and experiences with you and the rest of the team. Such exchanges will only help to better the business plan.

Establish lines of communication

Have an open-door policy. Encourage everyone in your organization to walk in to meet and talk with you. You never know where that winning idea could come from. Keeping your channels open would also help to keep a tab on the mood in the company, especially when things are not going as per plan. Have an open mind and treat each bit of information without any bias or prejudice and give its due credit. In fact, this could help you stay ahead of the curve.

Do not be afraid to make mid-term changes to your plans

As I have mentioned in one of my previous posts, most new ventures have had to change the entire plan atleast once in their life-cycle. By this I do not mean that you need to look at new business ideas and solutions. What normally happens is that the go-to-market or product/service/solution strategies go through major revamp, with acquired knowledge of market realities regarding your business. Most business leaders shy away from doing anything to their product/service/solution, as that is very close to their heart. This takes courage and an astute business mind. Afterall, the business was started to take it to success. It is important to keep your focus on this end-objective.

The author, Srikanth Vasuraj, is a Business Consultant focused on helping start-ups to grow. He can be reached at +91-98454 78585 or srikanth@nodiva.co.in . Please visit my website www.nodiva.co.in .

India’s Angels episode last weekend

Enjoyed being on India’s Angels last week – take a look

Collating Problems Worth Solving

In my experience working with Entrepreneurs for the past 9 odd years and possibly have seen a few thousand startups, there is one key attribute that instantly sets apart the startups that just might make it, to the ones that would struggle – the clarity on the problem they are trying to solve.

While we have made it a mandate in events like In50hrs that explaining the problem is crucial, we have realized that as a culture we havent yet learnt the art of observing the issues that around us – especially the ones that present opportunities along with it.

In an effort to help out, we have started collating interesting Problem Statements from entrepreneurs all around. Quite a few have contributed and we are starting to list them at the In50hrs site, as Problems Worth Solving (with due credits).

As a recent article said, Focus on Talking about the Problems, and not the solutions, its evident that the key to building a thriving ecosystem is by building the capability to spot the problems, but for now, we are giving entrepreneurs a headstart and hopefully a sense of what to look for.

PS: If you want to prototype a solution to any of these problems, do sign up for an In50hrs Near you.

PPS: Want to Contribute a Problem Statement? You can too.

Building a Scalable Sales Process

To ensure a predictable business plan it is important to have a repeatable and scalable sales process in place. Thereafter, increasing revenues as per the business plan would only mean increasing the sales team and the geographies that you intend to address. Once the sales process is in place, the sales team would only need to follow the process that has been set in place to start generating business. A scalable sales process should include:

-   An effective marketing strategy for lead generation

-   A good understanding of the prospective client’s decision-making process

-   A Go-to-Market (GTM) strategy that is built around the client’s process, to ensure progress of the sales efforts to predictable and desired outcomes

-   A sales process that will help to control the cost of customer acquisition

An Effective Lead Generation Program

To establish a regular business beat-rate, it is important to ensure that the sales force is regularly fed with qualified leads that they can then take forward to a possible closure. This can only be achieved if there are several lead generation strategies in operation. These should include, but not limited to:

-   A good and effective in-bound marketing strategy using the website and social networks

-   Some amount of out-bound marketing to create some overt awareness, like interviews with opinion leaders, planting business-specific articles, organizing/participating in events etc.

-   Cold-calling through an internal or external team, using any qualified databases

-   A referral program for employees, customers and other external sources

Using these and any other lead generation program would help to ensure that the sales force is kept busy and they have a healthy funnel to work with.

Understanding the client’s process for a scalable sales model

This is extremely critical for ensuring a predictable process, without which the sales team will never be able to correctly forecast business closures. Understanding this process will give a clear view of the way the sales effort is progressing and the actions required to be taken to move the sales process forward. This knowledge will also help you to plan and put in place the necessary actions that need to be taken at every stage of the sales process to ensure that the client has the necessary information to push it to the next level internally.

For example, if the decision maker is looking to garner internal support from other departments, this should be clearly tracked and the relevant material should be ready for circulation within the decision-making team, even before they ask for it. This would help to bring down the sales cycle-time and also establish some level of credibility. Similarly, if you know that the CFO/CEO may be the final decision-makers, then you should be ready with the business case and ROI calculator, to be able to quickly present the business case when the need arises, instead of reacting. Such proactive initiatives will go a long way in building credibility for yourself and give the impression that you have done this many times before. This is very important for a new venture.

Once this process has been streamlined from the experience of selling your solution or product to atleast 10-15 different clients, you then know you have a process that is now predictable and ready to be scaled. You now have a process that is customer-centric and is able to predict the client’s requirements at every stage, enabling you to take pre-emptive actions.

Controlling Cost of Customer Acquisition

With a predictable and repeatable sales model, you are now able to track the sales progress and the time it should take at each stage. Any time over-runs will mean an increase in the cost of sale. Monitoring and managing this at every stage will ensure customer acquisition within reasonable timelines and cost.

Also, this model will now empower you to take decisive calls on how far to engage the client before business closure. The usual sales problem is continuing to service a client for unreasonably elongated timelines and still having no closures, leading to an unpredictable sales forecast and inflated cost of sales. With this customer-centric model, you can predict where the bottleneck is and come to a reasonable conclusion on the probability of the business closing in your favour or closing at all, helping you to take that difficult call of pulling out of the opportunity. In most cases, this is usually the difficult part and that is entirely because of a lack understanding of the client’s decision-making process and therefore a high reliability on ‘HOPE’. Knowing when to say ‘NO’ is very critical to ensure sales costs are kept within permissible limits.

Controlling cost of sales, increasing sales productivity and bringing in some semblance of predictability to the sales forecast are issues that even established organizations are grappling with, and I do hope that my experience in trying to address these issues, as enumerated above, would be of help.

The author, Srikanth Vasuraj, is a Business Consultant focused on helping start-ups to grow. He can be reached at +91-98454 78585 or srikanth@nodiva.co.in . Please visit www.nodiva.co.in .

 

HR Ideas : Fresh Talent Acquisition, Campus Hiring, Tests for Hiring, Group Discussions & Just-In-Time Fresh Talent

In this blog post we would focus on one of the key aspect of any building fresh talent pool for growth. Every growing organization cannot ignore this essential method for talent building. This method is successful based on the Job market, Industry awareness & Social Influence on the Young Generation in that market.   There are many Government initiatives in various countries based on the business/economic environment in those countries. India – Govt. of India spending lots of money in developing resources through their National Skill Development Programs.  In Wales-UK the companies are provided grants upto 50% of employee salary to companies based on the location and skills they are hiring.

 

Hiring Fresh Talent:

Businesses across the globe strive to build efficiency in People, Process and Technology. A growing organization would have no choice to build within. A building within the organization means a plan for cost efficiency and building future talent the way you run your business. Many growing organizations keep certain percentage of the new workforce hiring for Fresh Talent. This gives them an edge of building and sustaining Hands to Deliver and Senior Management Head to think.  It becomes many times inevitable to recruit fresh talent for growth.

 

Idea: Create a simple processes for Fresh Talent Hiring in Organization including pay range(Your affordability + availability in your areas of operations), designations(do not go by fancy designations – simple meaningful for the role), Training & Orientation time (Must for getting value), Measurement of performance parameters and Growth Opportunities in future. Hit the road once these things are defined with clarity.  Variations can be possible based on Industry, market & Social circumstances around employment region.

 

Campus Hiring :

Campus Hiring is all about building your brand with the potential employees and bring some of the bright and new ideas into the organization. However, It’s not as easy as it sounds. It is a hard work for the employer to make an effort to identify the potential colleges who can produce the best that suits for you. No campus is right for everyone, please identify your own campus based on what you want and if they college graduates are tuned to come to your campus.

Idea: Do not go by the rank of the school when you choose.  Talk to the head of the college and see how his/her focus in grooming the students in their college.  They would be able to give you multiple options including they can send their students to your office than you going to the college.  However, there are advantages if they visit your office to keep them more close to the realities.

 

Hiring Tests for Evaluation:

Conducting Test is a universally used process for filtering from more applicants. This test can be applicable based on the position (especially jr.level) unless it is a mandatory Regulation in specific positions. A Selection Test can focus on the work related and non-work Related. Work related test would include the areas of business/function. Non-work related can be to test the mathematical, logical thinking ability etc.,

Idea: Building a Test for evaluation can be tedious many times. However, use this as a point of elimination first, but the result of successful candidates can be used for Discussion point during personal interviews. Build a simple test and administer internally to see the reliability and build some Upper and lower control limits for elimination (Tolerances). Do not make it lengthy, but focused on the output that you may want to draw. Include Work related & non-work related together to save time and give equal number of questions as far as possible.

 

Group Discussions:

Group Discussions are generally to evaluate one’s ability to collaborate and communicate with the group. This can also bring about the team dynamics and the adaptability of the individual who are involved.  The participants can be put to discuss a specific topic related to their function or general ability/knowledge. This method is again used for elimination/filtering from a large group of applicants.

Idea: Building Group Discussion evaluation is important which can focus on 3-4 key parameters which would impact the potential job that the applicant is going to face inside your organization. Typical parameters include Communication (verbal, non-verbal), Interpersonal skills, Building Ideas & Developing Relationships.

 

Just-In-Time Fresh Talent:

Business wants any resource Just-In-Time to make sure that the return on investment is perfectly timed. Any Business organization would be thrilled to see If they get a readymade resources for them. Currently governments are building lot of talent pool to make sure that the employment generation happens quickly. All the efforts are made to build employable people as soon as they complete their education.

Idea: As always “No pain – No Gain”. A step forward can help you to a great extent in building your talent. If you are in a specific area of specialization you could design a program which can be given to the Government Initiatives (India – National Skills Development Program). You may get in touch with your Industry association to ask for your required resources and help yourself (In India : http://www.nsdcindia.org/our-work/industry-associations.aspx, http://www.nsdcindia.org/faq/entrepreneur-faq.aspx  in UK wales govt. :http://www.gowales.co.uk/en/Graduate & UK Govt. https://www.gov.uk/jobcentre-plus-help-for-recruiters  )