Listening to a TiE Chennai talk between Suresh Sambandam (Founder & CEO of Orangescape) and Pravin Sekhar (Founder of Krea).
Suresh talked “on the difference between B2B product and consumer product. B2B ideas don’t come out of blue, it comes from years of experience in an industry or vertical. By studying the usage of our first product, a cloud platform, we noticed that many of our customers were developing workflow features, each of them repeating it. This led to identifying the need for a new product KISSflow.
In a B2B product you got to have powerful marketing, not selling. We did lot of content writing, evangelism to get people to try our product. Premature selling efforts may be catastrophic. We got lucky break, got initial momentum by getting to participate in Google IO in USA, coverage in TechCrunch, so people knew about the product.
It’s not true in India you can’t sell high priced products, you can sell it, but the number of customers who will buy is less. When you have limited resources for marketing, the question is where you focus, India or Global (USA), USA is attractive due to its size and quick decision of potential customers.
Our patent around rule engine, created a barrier for any quick competitors. We are not focusing on profitability, it doesn’t make sense to go for it when you are growing 30-40%. Our initial sales was done to customers in Chennai including to Numeric, Rane, Unilever. USA sales initially was slow, didn’t take off. We raised only USD 1 million and that was nowhere needed to do an entry to US, today if I were to redo I will do with nothing less than 10-15 Million dollars.
Every entrepreneur is a sales person, only after you sold few times, you should hire a sales guy. Professional sales team, they need a model to repeat. Only an entrepreneur will have the motivation, time to spend sleepless nights to figure out the sales model. Then to repeat it, hire the sales team. On pricing of a product, don’t ever go with the idea that price is cost plus margin, kill that idea. It has to be a sweet spot near what the market can afford to pay.
If you are building an enterprise product you need to be present in USA. If you are building an SaaS product then there is no need to be in USA. You can go to LegalZoom create a US Company, go to Regus get a virtual office, then open a US bank account and you are done. Initially we are not aware of SEO optimization, but once we started to play with it, we realized the huge impact it has, there were 63 keywords we got to be focusing on. SEO can also be tricky, you got to be careful.
The only reason you are starting a company is to do what you believe in, not to do what an advisor or coach or what I say. 80% of US enterprise sales happens remotely. Our experience in exhibiting in conferences has been bad, it’s not worth it. In the US many managers have a $5000 per year purcahsing limit, so if you’re product ACV falls below it you don’t need to worry about longevity. If you are crossing $5000 then you can very well price it $25000 as you have all the overheads like sales team.
In our sales process, we are very focused on metrics, user behaviour, SEO position & individual sales people performance”.