NASSCOM EMERGE Community An initiative to collaborate with members of NASSCOM

1. Are we (software companies) missing something that Tandoor Chicken has missed?

2. Why Tandoor could not get into the league of KFC and Kenny Rogers? Did we at least try to get there?

3. Why Nan + side-dish didn't become as successful as the Italian product called Pizza?

4. Did we worry about "scalability"? Have we at least started worrying about it now? Have we started talking beyond individual & family survival?

5. What contributes to the premium of Pizza, KFC etc.? What made children attracted to it? Is it just marketing or addictive taste?

I very much remember having full-chicken (small one) for Rs 30/- in Madurai many years ago. Now, I have become a vegetarian. For our two boys, we bought KFC chicken bucket (one full chicken) for over 350/-. The fundamental raw material for KFC is chicken which we can get for Rs. 70/-. For what, we pay the additional Rs. 270/-? Is it for the intellectual property?

If it is for the taste, then why we could not make our Tandoor Chicken business as big as KFC? If it is only a status symbol, then what we should do to develop self-esteem and higher value for the chicken products invented and made in India.

How can we stop our software innovation getting into this trap? Can we learn something from here for developing higher respect and value for what we make using our intelligence?

God discover Indian Potential; God bless all Living Beings!

I don't think there is any 'problem' here that needs to be solved. Indian food does not lacks in 'either' taste or 'perception'.

KFC and Pizzas are just new, and different. One more alternate added to list of options we have. Just like all the chinese restaurants that we have had since so long, now we are getting exposed to the newer mexican and italian restaurants.

And just like everything new and different, they can demand a price premium.

Think of McDonalds, they started at a price premium but now its not that much. We have 'Punjabi by nature' which demands a price premium for standard punjabi food too (and from my experience, its every penny worth the price, the food quality, the service, the ambience.)

You ofcourse know that a Rs. 370 KFC bucket includes price of Rs 70 chicken + shop's rent + cook's pay + counter-boy's pay + marketing costs and cost of all that they throw away at the end of the day so that next day's custumers get fresh food, not last night's leftovers.

Maybe I am missing your point, so let me know if you meant something else.

As usual, the problem is not in the indian-made product (taste) but there is a 'huge' problem in vision, ambition, perception, marketing, branding, reach, execution and scalability.

'Kumbakonam' Degree coffee is much more tastier than Starbucks. Which is more successful?

Are you happy with the success of 'Suguna Chicken' when compared to KFC? I do understand the cost of converting 'fresh/raw chicken' into a eatable food. Show me one single chicken product in India that has the "price, reach & size" of KFC.

Our complacency made us to feel happy just with the taste of the Indian food while we lag behind any of the international food-chain. I quoted many food related example to drive the point across in terms of our - in ability to reach and grow the way these international companies have done.

With the same perception and complacency, we should not miss out in the areas of software products. Looks like I missed the point completely; I couldn't drive this point (& huge problem) to you.

KFC is more than two decades old. It is a huge success, overall. It is a case-study for corporate success in the text books of management studies.

From cookies, chips to chicken, Indian products do not have the leadership position. The objective of this thread is to understand:

1. Our gap areas in Marketing

2. How we shrink the market opportunities & size

3. Our inability to scale

4. Lack of branding etc.,  So that, we can address all of them in "software" innovation.

Whatever I have learnt in the world of business is that there are great business ideas which are dime and dozen but great business leader are far and few between.

To make anything big happen, there is first a dreamer and a leader who believes in himself and his ideas and work with passion to fulfill his vision relentlessly.

We need Big dreamers in India and the more we have the more Global organization we will create.

The tougher the challenges, the bigger and a stronger dream is required to overcome it.

In the end it is courage, i.e. ability to act despite fear is what stands in the way and the only way to reduce fear is to increase the size of your dreams.

OK, as I understand your point is the lack of 'scaling up' of operations in India. Or to continue with your example, the "mom n pop" restaurants here don't dream of becoming nation wide chains? (correct me if I am wrong).

I think businesses here have wisened up to fill this gap, I think we will start to see thefull impact of this "corporatisation of family businesses" in another 3-4 years.

My point here is that a lot of the problems are 'operational' difficulties, and not really 'missing the big picture' or 'not dreaming big enough'.

We have 'punjabi by nature' which is glortifing the punjabi food by creating a chain of stores with same great food quality and ambience (along with same price as KFC).

We have Haldirams and BikanerWala which have been operating chains and have a great brand value since a long time (although not at same 'extra' price, which I believe is a good thing).

And recently I came across a "Bittu tikki wala" shop in West Delhi. This guy is famous in marriage catering circles in Delhi (along with Seven Seas) and he now seems to be opening his outlets across delhi (its probably a while before if/when he will go for an IPO and become a national chain but I see the right seeds here).

I believe a big issue holding back Indian businesses is TAX evasion. As everything is done off the books, there needs to be some trusted person at the counter, and the shop keeper waits for his kids to grow up or brings in his brother, and thats the max they can 'scale up'. The organised retailers have been happily paying taxes, doing everything on books and hiring 6000 per month staff to man the counter.

To give another example, a friend of mine runs a mustard oil mill (sarson ka tel) and was supplying to most of delhi and haryana. But now there was a Jaipur company which had started heavily advertising on Radio Mirchi to build their brand in NCR (you might recall some 'kachhi ghani ka tel' ads on radio). And in reaction he had to scale up and start supplying to Jaipur to hit him back (and there biggest 'bottelneck' in doing so was paying excise duty to enter rajasthan, which they were happily evading till now in delhi/haryana).

So I kinda disagree with your 'food' example as I see many businesses who atleast 'now' understand the importance of these things. The marketing, the scaling up, or in short the 'corporatisation' of a business.

And a lot of the problems are 'operational' difficulties, and not really 'missing the big picture' or 'not dreaming big'.

Anyway, To come back to software, Indian companies here are still to happy with the massive profit margin in man-hour selling. I belive that 'this' problem does need  a little more attention in India and the recession can maybe help .

And even in services, surprisingly, most don't even demand that the Indian companies should be listed as partners or in 'credits' section of the client's website or product. That can be a start but in my experience the companies are reluctant to do even that.

(I have held senior positions in 3 small scale (40-50 people) IT services companies and each time the response was that "yes this is something we can/should do but lets wait a little while" DUH!!!)

Regarding product companies, I can't comment on focused towards Indian markets companies but as a company making consumer software products for International markets, my largest issues have been the cost of marketing and travel in US/Europe when all I have is Indian savings Not to mention lack of relevant marketing talent. I have approached 3 relatively famous companies in NCR region and each time their best suggestions were to SPAM forums and social networking sites, to get traffic and google rankings. YAA RIGHT.

I wonder why none of them even suggested buying shelf space in US retail stores, or taking in booth in a trade show. If they would have, I would have hired them right away.

I repeat my point here, a lot of the problems are 'operational' difficulties, and not really 'missing the big picture' or 'not dreaming big enough'.

Sachin:

Good reflection of what is going or not going on. Thanks for taking the time and responding in detail.

1. Can you please list what you mean by 'operational difficulties'?

2. In a country with billion people how do you know most people have bigger picture in mind and how do you know their dream is big enough? 

Ofcourse, not everyone has big picture. But then not everyone is 'supposed' to dream big. Not everyone is a class in school comes first, and not everyone wants to. Even in other more developed economies there is a vast majority (90%) which is happy with a usual 9-to-5 job.

We can never have enough of high fliers and it definitely will help to motivate more people on this path, but I just feel that India already has a good number of people trying to make a difference and understand the challenges.

In above examples, the 'operational' difficulties were how to maintain same profit margins and competitive prices even after paying income/sales tax and excise duty. In my case, it is getting specific marketing and legal advice.

To be more descreptive, I can find tons of lawyers here who can explain legal contracts. There are few who are also experienced in software licenses. But I can't find any who is experienced in actual 'arguments' in specific intellectual propoerty or competition laws cases involving foreign countries. They don't even know about some pretty famous precedent cases which define the limits of what we can or cannot do within legal limits. And their answer in most cases is just a 'play it safe, don't do it'. While I have no intention of doing anything illigal or unethical, somehow I don't think playing it safe can let us spread our wings far enough. And without confident legal advice, its hard to take some of the potentially very rewarding steps.

Same with marketing expertise. Every 15 year old with a blog knows about google ads and search engine optimization (and about spamming forums with self promoting posts). I would expect better from a marketing consultant whom I can trust to run my campaigns.

Fortunately, I didn't have any difficulty finding a smart accountant who could save our taxes. So thats one bright spot.

I have now a good advisor on marketing, but not in India which makes it expensive. Maybe its just that I am not looking at the right place so any guidance will help.

 

Sachin:

Thanks for your quick response.

I have added a thread do you 'strongly' believe that good (or sufficient) number of people 'dream big' that is sufficient to transform the software industry in India?

Please click on this to answer.

Then coming to the operational difficulties, am just trying to capture key issues from your detailed response.

a. Inability to maintain profit (after necessary expenses)

b. Lack of marketing advice

c. Absence of legal advice on intellectual property

Have I missed out anything? If so, please add like a bullet points.

Will start a separate thread on these areas so that we can focus and go deeper in each of the narrow areas. Otherwise, both problem & solution will look little blurred.

Sunil: Thanks for your insight and wisdom. "to reduce fear is to increase the size of your dreams" - I like it.

When we were kids, we jump into the well in our fields and have good swimming. During summer time, the water level goes down; then jumping into the well becomes little scary. When we see bungee-jumping & para-jump, jumping into the well will be like a kids-game - no more fear when we learn and "ready" to face the big issues - isn't it?

Assume that few people "have big dreams". What are the challenges in taking it to reality when comes to software marketing in India?

Obviously, execution is not a one-man show.

I don't know the purpose of this discussion or why you started this thread? Are you (or someone else) planning to actually 'do' something about whatever comes out of these discussions because it feels like I am just ranting for no reason, in the end these are just things that we need to work our way through.

Sachin:

My apologies if I mis-lead this thread. My purpose, as always:

1. I would like to go "deeper" in the discussion - as much as possible

2. I try to spilit the topic if the topic becomes 'too broad'. At the same, I try my best to link (for looking at related topics or to drill-down).

3. 'Provoke' good thoughts and ultimately improve participation (from many)

PERSONALLY:

We as a PRODUCT COMPANY, need as much insight as possible to improve "SOFTWARE MARKETING' strategy (specifically for the Indian market).

IN THE INTERACTION:

I do not have any rights to 'judge' the responses. I strongly believe whatever we contribute is useful for someone who reads. Am sure your thoughts are well said.

Sachin, please let me know your mobile number. I will call you to explain. Am not perfect; but I can change. NASSCOM Emerge is a small team - need active pariticipation from many. Asking is best way to share and gain knowledge.

Sachin:

>> Are you (or someone else) planning to actually 'do' something about whatever comes out of these discussions ?

1. Yes, our responses am sure will create knowledge for whoever wants to use on their way towards their business or personal goal.

2. Collectively as a community, this will help list action item that we can act upon to improve the eco-system, market climate or whatever

Personally, I have learnt so much from the community-participation. I like more "action items" as outcomes of the knowledge we collectively create & share.

OK, I think we started off on the wrong foot :-) So lets try again.

You questioned in the first 2 posts: if we have any fundamental issues here in India or if Indians need to understand marketing better. I think that is too strong and too broad a statement to make. I think Indians do understand and have been doing a lot of great marketing (I guess the Indian in me got a little offended there, lol :-) ).

Anyway, coming to software,

In my case it was a problem finding expert advice, and I was surprised to not find it locally. Now we are using legal/management consultants in US and Europe (I contacted authors of popular management books, most of them run consulting firms and while they are expensive, they are not 'that' expensive and its easier to trust their advice. I don't know if this is something you would like to try). Again, they can only help with strategy and we still need to figure out how to manage our operations (I am resisting the temptation to hire fresh MBA grads and then training them, I would prefer to hire someone who would rather train me in marketing).

Can you share some of the challenges you have been facing? How did you solve the ones already solved?

Sachin: Thanks.

>> 1. Is there any fundamental issues that we should quickly address in selling software in India?

Just to clarify little bit. I didn't make any statement. It is just a question. I didn't use the word 'marketing' (this question is on 'selling').

I have my own personal opinion on this; but, I do not want to restrict the discussion in line with my own feelings and experience.

Yes, Indians are good in marketing. I haven't seen much evidence to use the adjective 'great' in this context. I 'feel' that it can become or it should become 'great'.

Now, let me get into our personal experience through your questions:

>> Can you share some of the challenges you have been facing?

- Selling software is little painful for us (startup) in India

- Convincing on our value is little easy; making them take the decision to buy our solution is little difficult initially as they were worried whether they can trust small companies or not ... So, it is little bit of a hard & painful journey for software product companies in India. That's why we wish that the eco-system is little bit better.

>> How did you solve the ones already solved?

As for as advisors are concerned, we have access to good number of Indian and american expertise in marketing and legal. Trying to partner with companies to 'sell'. Convincing big-player to partner with us is little difficult. Partnering with small & niche player is little easy but selling will be little bit challenging.

Overall, software market in India is too tiny for its size. So I FEEL that EITHER we are not doing something right in the software industry OR we are NOT nurturing the eco-system sufficiently. Whatever the reason may be, the outcome is not very encouraging so we have a long way to go.

>> Just to clarify little bit. I didn't make any statement.
>> It is just a question. I didn't use the word 'marketing

OK, I guess I misunderstood your tandoori chicken example.

About selling, I seems like a curve we need to follow. The smaller partnerships come first, and once we have enough of them the bigger ones will follow, and with them the customers... its been a slow process for us, so I guess the key is to make it all happen faster than money/motivation burns out :-)

1. Why the software-product sales process is (or should be) SO SLOW in India compared to USA? 

2. How many entrepreneurs can survive this long journey? Is that the reason many people (Indian in India) with the entrepreneurial spirit continue to live the comfort zone of the corporate cushion?

3. Is there any thing we can do "collectively" to speed it up little bit?

Good to see a long and detailed discussions.

When we say "software" selling in India---In India its not the matter of who is selling, its matter of who is buying...We still do not have the habit of buying any software(Untill its the company who is paying it on your behalf !!!) , if you don't believe we can check the list on our personal computer, how much of them are bought ! (Pls. read "We" including me)

Now as far as capturing the market in other countries is concern, how many of our companies are able to do/invest on enough research on the requirement of the specific market ? How many of them have the time/investment to develop the product and marketing offices across World.

I have practically seen in recent cases while helping companies for M&A, when some Companies decided to create Internationally accepted product but now struggling as the investment got exhausted... 

Yes, I do agree even IP advices is not easily available.

Piracy is a double edged sword as it can both hurt sales and help in word-of-mouth spreads, I guess how one takes it depends on the stage at which the product is in a cycle. Also, it is more of a factor for consumer software and not much for enterprise software.

There are a lot of companies in India which are trying to 'reinvent' successful US businesses/services/models for Indian markets. But I know of atleast a few companies which are building truly innovative products which will globally move forward the industry they are in (if they are successful).

I guess the key is to get self sustaining cash flow as soon as possible (even if it means releasing windows 3.1), and then keep working till you get to releasing your Vista. Relying on solely funding rounds is not something I would recommend for sustaining, funding should preferably be for growth.

1. What is the "Top Most" success factor for selling "Enterprise Software"?

2. Is 'money' a 'big issue' for software business? If so, what does it take to convince the bank to lend? How big the money should be (minimum need) to create the basic solution and do basic marketing?