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Incubator Funds in India: Sales and Business Development?

Posted on Tuesday, Nov 13th 2007

The idea is good. The product has been spec’ed under strong product marketing discipline. The talented engineering team has delivered Version 1.0.

Now it’s time to sell.

So, how do you sell from India, without burning through ridiculous amounts of capital, without spinning in place?

There are multiple answers to this question. However, one of them, for me, would be to have a TeleWebSales (TWS) team as part of the incubator. If that sounds like gobbledygook to you, then you need to read my discussion with Anneke Seley on TWS methodology.

I am a huge believer in telemarketing, telesales, and search engine/web-based marketing. All of these play to India’s strength of being a powerhouse BPO/call center player. Now, the time has come to apply that phone/web skill and morph to selling via those channels.

In terms of business development (doing larger partnership type deals), again, it would be good to have high-level business development talent in the incubator, since the individual companies would not be able to attract or afford such talent.

I will end this topic with one caveat. Only certain types of products/services can be sold in this mode, and it would be important to ensure that the “idea” is chosen accordingly. There are many businesses that require more direct sales forces or hundreds of millions of dollars in brand advertising. These are probably not the types of businesses I would recommend going after at this stage of the game. (Why? That’s a much longer conversation, but for now, trust me on this guidance.)

This segment is a part in the series : Incubator Funds in India

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I beg to disagree with this …

Buying in India is significantly in person … a strong inside sales/pre-sales team can back up a field sales team to start with … but one shouldn’t be too ahead of the market. WebEx, Centralized sales, Pre-Sales etc. are powerful elements worth investing in … but field sales is unavoidable for the next 3-5 yrs.

Sales is the #1 area the founding team should drive personally … (even the technical members of the founding team) …

(a) no one sells more passionately and with as much conviction as the founding team … which is key to sales anyways

(b) that’s the only way the team gets aligned with what clients want from day 1 … else it’s easy to hide in one’s office and keep building the business inside out … till you finally run out of money

Sridhar Turaga Tuesday, November 13, 2007 at 10:02 PM PT

Sridhar,

You have an inherent assumption about what is it that you are selling in your above discourse. What is that assumption?

There’s no need to sell consumer internet offerings in person. There’s no need to sell SaaS offerings in the US market in person. These are examples of the types of businesses that can avoid large direct sales efforts, by all means.

Sramana

Sramana Mitra Tuesday, November 13, 2007 at 10:09 PM PT

My point about in-effectiveness of TWS … is about selling products or services to Indian consumers or Indian enterprises.

If the company is targeting the US market … TWS is a great idea. Infact AdventNet and ZOHO do it quite effectively … out of India.

My point about the founding team driving sales in the first 12-15 months … is about in-effectiveness of leveraging a “shared service” sales function at the incubator.

Till the value proposition and go-to market is ironed out … outsourcing of any form may prove counter productive. Additionally, TWS needs services execution capability … can an incubator truly build such skills?

Sridhar Turaga Wednesday, November 14, 2007 at 2:19 AM PT

Sramana

You are quite right. I think that in the software product space global business development and sales will have to be done remotely. Which is why SaaS provides an interesting opportunity for innovation opportunities. SaaS naturally lends itself to remote sales as well as remote delivery of services.

Sanjoy Sanyal Wednesday, November 14, 2007 at 4:08 AM PT

Sramana,
In theory, this is a killer feature of the proposed incubator.

But in my opinion, this will constrain the openness of incubator to take up diverse and risky ideas/startups. In steady state the situation will be more akin to largely unsuccessful internal Venture/Startup fund initiatives of large companies.

Again, much depends on the actual people part of the team.

-Balaji S.
twitter: https://twitter.com/labsji

Balaji Sowmyanarayan Wednesday, November 14, 2007 at 8:24 AM PT

Hi Balaji,

Yes, indeed, everything depends on the “people” on the team. In fact, the reason to do incubators such as this is to bring under one roof a constellation of talent and experience that can be leveraged by a broader set of entrepreneurs. You will always see biases in what each group of people feel comfortable investing in.

Each one of us is a product of our experience and instincts. And also, don’t forget passions.

Diverse may not be the goal of the incubator. Leverage certainly would be. Risk is relative.

Investing in an optical equipment startup may be very risky for me, but not for Vinod Khosla or Promod Haque.

On the other hand, I would probably be more willing to do a luxury brand than either of them.

See what I mean?

Sramana

Sramana Mitra Wednesday, November 14, 2007 at 10:40 AM PT

Sridhar,

The entire TWS team would not be in the incubator shared resources pool. However, effectiveness of these functions depend largely on process, and experienced sales management, marketing management, etc. would need to be in the incubator management.

I don’t foresee the individual companies being able to afford that right away, until some critical mass is built up first.

Sramana

Sramana Mitra Wednesday, November 14, 2007 at 10:43 AM PT

Sanjoy,

Yes, SaaS is a very good area for Indian entrepreneurs to tap into for Concept Arbitrage,
price-undercutting, and selling to the US market.

Sramana

Sramana Mitra Wednesday, November 14, 2007 at 10:46 AM PT

Entrepreneurship and startup means breaking all the rules in Biz development, sales, finance, technical development, HRM etc. you need to write your own rules based on your internal financial situation. I think it’s misconception that Indian startup can’t sale, you can look around in the Bangalore and find that every MNC, Sillicon valley startup has an office here and most of the business heads are making trip to this part of the world. It may be bit slow or you may need to give extra discount but you can very well sale your product at a fraction of marketing cost in US/EU.

Sunil

Sunil Maheshwari Wednesday, November 14, 2007 at 10:34 PM PT

Sunil,

There are aspects where it is necessary to rewrite the rules, however, I have to say, what you say above could not be further from the truth.

First, to scale any business, by and large, you need to establish a repeatable sales process. Reinventing the wheel all the way is not very useful in this respect. Knowledge and experience of best practices really help. Reinventing the wheel burns valuable resources early on for no good reason.

Second, even though MNC’s visit Bangalore, etc. it is not necessarily obvious or easy to find your Economic Buyer, Technical Decision Maker, etc. walking on the streets in India. In some, rare cases, you may get to encounter these buyers in India. But don’t for a moment think anyone who works for a company that you are trying to sell to can buy your product.

Sramana

Sramana Mitra Thursday, November 15, 2007 at 9:51 AM PT