India Startup Chat

What we learned from 10 episodes and 3 months of podcasting #startups

Nearly 30% of Americans actively listen to podcasts weekly, and over 17% globally, according to Pew Research. There are over 200K podcasts available and over 20K publish weekly. In the area of business and technology alone there are over 20K podcasts.

Ravi, Lakshmi and I started a podcast, India Startup Chat 3 months ago to explore the world of voice media.

India Startup Chat

India Startup Chat

The main reason we got started was to understand this new medium and try to engage with the startup community in India and outside.

I have been asked by a few listeners if podcasting is a good marketing tactic to adopt to generate awareness and engage with B2B customers.

After having done 10 episodes, I am not sure I know the answer yet, but I can tell you it is likely not going to generate a lot of leads as much as it will keep your brand front and center of your already existing users.

The way I think about podcasting is to use it as yet another means of creating engagement with users but with a medium that is used at a different time than traditional blog reading or catching up on news or social networks. It tends to be heard mostly in the afternoon after lunch for us.

Given than fewer than 10% of Indian Internet users ever listen to podcasts, while over 60% of them read blog posts and over 80% of them check Facebook daily, you want to allocate time appropriately towards various techniques for generating awareness for your company.

For B2B companies, I would say the priority would be much lower. Business and technology podcasts have 29% fewer listeners and 50% fewer plays than general interest podcasts.

From my anecdotal data gathering from 20+ listeners of our podcast, I can tell you most of our American users listen to our podcast on the soundcloud app, while over 70% of Indian audience listens to it streaming on Facebook, because that’s where we show up first – on their news feed.

Our audience is between 300-800 per episode, so, I am not sure we have reached any form of critical mass, but we have some data to work with.

Most of our listeners (over 80%) found out about our podcast since they were friends of Ravi, Lakshmi or I on Facebook or if a friend “Liked” an episode and it showed up on their news feed.

Most people (over 60%) listen to our podcast on their desktop (not surprising, given it is in India, at work) and I suspect that will start to change and move to more mobile in a few months / next year.

Since the number if iPhone users is relatively small in India (compared to Android phones), I think even if we optimize our ITunes podcast search optimization, we wont get too many (few, but negligible) new users.

What I did learn is that if we had the name podcast on the name of our show, it might likely get more listeners from searching on Google.

If you are considering podcasting for your startup, as a marketing mechanism, I will outline over the next few days what you need to consider, how you should set it up and go about marketing the podcast first to get your customers to listen.

Let me know if there are specific areas that interest you more than others.

3 techniques to support “Word of Mouth” marketing by customers for SaaS companies

I mentioned that many enterprise customers are loathe to talk about the products and solutions they use unless they have approval from their corporate PR team. In many cases they consider early stage startup products as a “competitive differentiation”.

Still, there are many companies (such as #Slack, Cloudera) that have done a great job in getting many customers to share their screen shots online and also blog / tweet about their usage of the product.

What makes enterprise customers want to share why they are working with a product or using it?

Customer Word of Mouth

Customer Word of Mouth

The 3 main reasons seem to be

a) Perception that the solution is associated with being leading edge, innovative or cool

b) Acceptance by peers and industry experts that the use of that product is a “safe choice” and

c) Incentives provided by the startup to talk about the usage of the product which leads to others in the peer group acknowledging the company as a thought leader.

 

If those are the 3 most important reasons why customers do share their usage of your SaaS product with others, how do you go about helping create a perception that being associated with your product or company is cool, safe or innovative?

I have seen many good SaaS company entrepreneurs starting to form an influencer advisory list, which is a private group of very interested, engaged and empowered influential community members – potential investors, industry analysts and a few potential customers.

This list of influencers is formed even before the product is ready and their inputs are sought before your product is ready or your messaging is clear. When these folks have the opportunity to shape your message and positioning in the market, they have more “vested” in your company and are likely to share your news and information.

Typically the influencer advisory list has between 7-10 folks and getting them to know each other (if they already dont) is a great idea. They can network and learn from each other and also help understand the other people’s perspectives.

In return for their time, some folks have given some of their folks the opportunity to invest early, still others have offered advisory shares and others have just paid for the regular meetups.

Startup Partnership Business Development Process

Understanding the mechanics of partnering with “big companies” with a large channel

As exciting as it sounds, when a business development or partner sales representative from a large company in your domain calls you, it tends to, in most cases, generate more work than get customers in the short term for a startup.

The first part of partnering with a large company is to understand when you are ready to “sell with” or “sell through” the larger company.

In theory, partnering sounds awesome. The large company has a huge installed based, they may not have a product competitive to the one you posses and your solution fills a gap they may have in their portfolio.

In practice the mechanics of the partnership, the logistics, elapsed time and commercial terms are the things that wear you down.

First realize that they are multiple “players” within the large company – if it is a large technology company, they are very much engineering driven – so the internal engineering teams have a preference to build not buy or partner. While the product management teams might have a more outside-in view, it is also likely they will prefer to build internally (“I dont think the product will take too long to build” OR “We can build what that startup built in 3 months with 3 resources”).

Then you have the marketing teams, which tend to be consumed (in larger companies) with the current quarter’s lead generation or to focus on helping their sales team’s quarterly goals. While they would like to partner, it is with the intent to have their message be more “cool”, “relevant” or “credible” with potential customers or analysts / press etc.

The sales teams would like to partner if it helps them get the deal done. If they do not get credit for the deal, (or quota relief), no amount of convincing will get them to partner with your startup.

I am going to skip over the other incidental teams such as Finance, Legal and Services team, since they tend to get involved in the back end of most partnership opportunities and rarely lead.

That leaves you with the Business Development team – who reached out to you in the first place. In most large technology companies, they are chartered with “inorganic” growth – or the ability to generate revenue either by having other companies sell their products or helping revenues grow by selling other products the company does not build itself.

In larger technology companies, most BD organizations report either to the Sales team or the Marketing team. In less than 10% of the companies they might report directly to the CEO (via the Corporate Development organization or Finance in even rarer cases).

Most business development professionals are well meaning, have an outside in market perspective and are keen to make deals happen, but, in most companies, they tend to execute deals and influence the strategy, not come up with it.

Meaning, they can make the deal happen if the product or sales teams desire, or they can say no to a deal, but they rarely initiate the deal. There are exceptions.

So, what should you do when a Business development person reaches out to you to partner?

First, ask them to help you understand the dynamics of their organization and their process.

Typically, they will have a 3 or 5 step process.

Startup Partnership Business Development Process

Startup Partnership Business Development Process

Step 1: Layout the market scenario, including product fit, competitive roadmap, etc. and get buy in from Engineering and the product teams. Obtain an executive champion

Step 2: Layout the Go to market plans, with help from the marketing and sales teams. Secure the executive champion for post integration.

Step 3: Detail the financial impact – the investment to be made, the potential revenue impact, the opportunity. Secure the budget needed for the various teams for the deal.

Step 4: Get buy-in to start negotiations with your startup. This includes discussion with their legal team on the framework of the agreement, discussions with your startup on the roles, responsibilities and work each team needs to do to be successful. This includes defining success with milestones at each stage.

Step 5: Final contract completion and roadmap for the partnership with the outline of the announcements, etc.

This entire 5 step process usually takes months if not 2 quarters on average.

Customer Development Hierarchy of Needs (Maslows theory applied to Customer Development)

Maslow’s hierarchy of needs applied to customer development

Yesterday, I had an entrepreneur reach out to me to ask me a few questions about his #napkinStage idea. He was doing customer development, he said and before he’d get to far into the development of the product, he wanted to talk to customers.

One thing that he mentioned to did not surprise me as much, but was indicative of the state of the challenges faced by all entrepreneurs.

I have sent over 110 emails (20-30 were warm introductions, rest were cold).

“I have been trying to get to talk to potential users on the phone so I can ask more open-ended questions”, he said. “I have gotten 2 people willing to talk on the phone”. The rest have been reluctant to phone and prefer to email or message.

Yesterday I was reading the survey results by attentiv (the graph shows the # of mobile phone users who use various capabilities on the phone with some level of frequency.

Social Networks, Email and Text, No Calls

Social Networks, Email and Text, No Calls, Credit: (attentiv)

Turns out, the entrepreneur was facing the problem that 90% of marketers face. We just dont like to talk any more.

I would have not been surprised about this if this was only that they did not want to talk to strangers.

That’s not the case though.

In the customer development hierarchy (or Maslow’s hierarchy applied to customer development), while the pre-purchase may be the pinnacle of the customer development outcomes, the customer calls are the hardest.

Customer Development Hierarchy of Needs (Maslows theory applied to Customer Development)

Customer Development Hierarchy of Needs (Maslows theory applied to Customer Development)

I have seen many of the entrepreneurs at our accelerator give up on the “Talk to actual customers on the phone” portion of the customer development sprint.

This is for both B2B and B2C companies.

Most customers are comfortable with online surveys, many are willing (even at the expense of getting spammed) to even provide their email to be notified when a product gets launched. While pledging on Kickstarter and pre-paying revenue are the ultimate goals and more indicative of traction, the customer call still is the holy grail that every accelerator program asks their participants to do.

I think that will have to change over the next few years. If messaging is what most of the customers prefer, I suspect entrepreneurs will start to focus on getting potential users to “join their public #Slack channel”.

Open discussions are much more simpler and easier to manage using Twitter or Slack, compared to phone calls, which require a lot of commitment in terms of time, attention and focus.

Most people are losing the stamina and energy it takes to have a long conversation on the phone.

#NapingStage marketing people at startups are becoming more product managers than brand builders

Yesterday we talked about the changing nature of the sales person’s role at the #napkinStage of a startup. While many people still prefer the “closer” to the pipeline builder, I think if you have a great product that customers can try, use and then buy you dont need to “close”. Customers will “buy” or “close” themselves. Enterprise and SMB software use to be “sold” not “bought” – that’s now changed. Only if you have a poor quality product or an expensive one, do you need to “force” people to buy.

Today I am going to talk about the role of Marketing folks in the #NapkinStage of a startup. While many startups may not hire a marketing person early, I think the role of the “marketer” is being performed by someone who is responsible for “getting traction”.

10 years ago, the Marketing person at a startup was focused on building analyst relations, attending and participating at events and building a “brand”. They spent a lot of time with agencies building the right creatives, making sure they had good “brochures”, giveaways and promotional content.

Changing Role of the SaaS Marketing Professional

Changing Role of the SaaS Marketing Professional

The marketing person’s role is now more like an early stage product manager – I call them opportunity managers than product managers actually.

If you have a good product, then it sells itself in a 15 min demo (or a 3 min video). Yesterday, one of our companies (Beagel) told me about how they have a 70% conversion to paid customers in less than 30 min, so this is not a rarity.

The role if marketing manager is now focused a lot more on metrics like Customer LifeTime Value (LTV), CAC (Customer Acquisition Costs) and CTR (Click Through Rate), then results of “Brand surveys”, or “generated leads” and analyst reviews. They are becoming more data driven.

Attending events, writing whitepapers and delivering webinars is being replaced by creative copy writing – SEO, engaging on social media (Twitter, etc.).

With this change it is becoming obvious that most marketing is now focused on measurable outcomes associated with revenues, business and product than purely brand.

Surprisingly, even at larger companies (such as Microsoft), I am finding that most Marketing folks are coming to learn about these techniques of “Lean marketing” from the startups at our accelerator.

Tomorrow I will talk about the changing role of the #NapkinStage development team and how they are becoming more Customer service organizations than product engineering.

Most early sales people at startups are becoming more marketers than closers

Over the last 6-7 months I have been helping #napkinStage companies hire their first few sales people to grow from the founders selling the product to growing a sustainable team to help sell.

The most important thing I have noticed is that most of the sales people are learning the science and art of marketing – building an email list, engaging on social media, writing short opinion pieces on trends, etc.

The primary reason is that most of the sales folks at startups have to build their funnel first, and most of them have few relationships or existing customers to get referral customers from.

10 years ago, or even 20 years ago, most of the techniques sales people used to fill their funnel was “cold calling” or “smile and dial”. There were few emails as well, but largely attending events to network and cold calling were the prevalent strategies.

Now targeted emails have replaced cold calling. Initial connection on social media – Twitter, LinkedIn have replaced connecting at an event. Writing a blog post or participating on a podcast have replaced sending PDF files of marketing collateral.

The role of the sales person as a closer is becoming less relevant now, and their role as a facilitator is becoming more important. The effective sales professionals I know are learning the art and science of coordinating a concerted campaign to get access to individuals within an account who can help become champions at a prospect.

Changing Role of the SaaS Sales Professional

Changing Role of the SaaS Sales Professional

Sales people are becoming more “industry experts” and learning about events prospects should be attending, having an opinion on current trends and curating content that they believe will be useful for their prospects.

That used to be the role of the marketing person.

In tomorrow’s post I will examine the changed role of the marketing person. Their roles are moving from more being more art and creative to science and data driven.

How the 6 digit Apple passcode requirement wastes $6.551 Billion annually

Apple this week announced that they are going to require 6 digit passcodes instead of 4 digit passcodes for the lock screen.

Newer ipads and iphones will require the 6 digit passcodes. That’s apparently more secure than 4 digit passcodes.

The only reason to go to 6 digits is when your phone gets stolen by someone who can brute force 10,000 codes (with 4 digits). Well, apparently, most people use pretty common passwords, so if you only try 27 known passcodes (such as 1111) then your chances of unlocking the phone are at 67%. That means only a third of the people actually use complicated passcodes that will take more than 15 minutes to crack.

If however, you have 6 digits, then the combinations are a million (versus 10,000+) so, it should take longer and more effort to crack your password.

I doubt that. 90% of people will go with 111111 instead of 1111 is my guess, or 123456 instead of 1234. Now, your stolen phone will take 22 minutes to be unlocked instead of 15. Yay!

Apple has sold 512 Iphones to date and about 200 million iPads. Of those, about 75% or 534 Million devices are still in active use. 83% of them run the latest version of iOS.

I am going to assume that most people will upgrade to the new OS version so about 500 million (534 million to be exact) iOS devices will be upgraded to 6 digit passcodes.

The median salary in the US is about $42,000 and the median iPhone users salary worldwide is higher – $53,000.

90% of the iPhone users move to 6 digit passcodes and each user actually unlocks their phone 50 times a day (given that most users glance or unlock their phone 150 – 500 times a day, it is a reasonable assumption).

The extra two digits will cause 1 second more to unlock is also a fair assumption to make.

This equates to $6,551,388,888.89 in productivity loss every year.

iPhone 6 digit passcode Migration Wasted Productivity

iPhone 6 digit passcode Migration Wasted Productivity

With no discernible added security. All for a feature going from 4 digit passcodes to 6 digits.

There were 1.6 Million phones stolen in 2014. The average price of the stolen iPhone was $250, equating to a $400 Million market.

End note: I know the value of a stolen iPhone to a user (especially if there is a loss of life tragically in some cases) is much more than $250, but a 6 digit passcode is not going to change that for the better.