Something interesting is starting to happen among the B2B companies that are starting / getting funded in India. Companies that have a larger price point (> $1000 per month for e.g.) are all either a) moving to the US (company founder, key employee) or b) they are hiring larger inside sales (telesales) teams and teaching them how to sell outside India. There are exceptions (Visual Website Optimizer) but I am seeing more companies moving to US to seek faster adoption in the early stages.
By B2B (Business to Business) I mean companies that sell to other businesses, either small or large. There are enough documented issues selling in India to businesses, some of which include:
1. An extreme focus on cost by Indian businesses, which results in much lower (or non-existent) profit margins.
2. The inability to find good, trained sales professionals
3. The “request” by many “decision makers” to be paid a kickback, which if not paid, results in unpredictable sales cycles
There have been many company founders (OrangeScape, InterviewStreet, Mobstac, etc.), who all started in India, sold to their first few business customers here in India, but have now either moved to the US or are focusing on the US market alone.
Besides the fact that early adopter companies are largely there in the US, many or all of the issues listed above tend to go away bringing mostly issues of upfront investment on sales resources as the primary barrier to a US only distribution strategy.
So what does this mean for new entrepreneurs looking to start B2B ventures in India?
1. Dont. Seriously. Find easier and more fun things to do than sell to Indian businesses (This is a personal opinion alone).
2. If you still insist on doing that, get an awesome sales director / manager from a kick-ass company to head up your sales efforts sooner rather than later and help create a detailed training plan to hire, train and manage new sales professionals.
3. Look to partner and ride an existing distribution channel that exists. Tally has an excellent list of re-sellers / partners who you might want to talk with.
One last thought – Entrepreneurship is hard. Dont make it harder by choosing a distribution strategy that’s even harder.