Event Report: “Building Tech Products out of India” with Naren Gupta of Nexus Ventures
(This is a live blog of the event Nexus Venture Partners’ event “Building Global Tech Product Companies out of India” where Naren Gupta, founder of Nexus chatted with Abinash Tripathy, founder of Pune-company Infinitely Beta about the challenges faced by companies trying to build a global product. The other four partners at Nexus were also there. This is essentially a collection of observations made by the various speakers during this event.)
- Indian companies are good with technology, but we don’t build sales and marketing organizations early. Most engineers think that if you build a great product, customers will be easy to get. This is the biggest shortcoming that needs fixing.
- Having a sales & marketing person in the founding team is great, but not necessary. Having one of the technical co-founder play a sales/marketing role is really great. Customers tend to trust technical guys more than pure sales guys. And this is a skill that can be learned. Initially, it will be hard, as you will be turned down by a large number of people, but you’ll figure it out. We all know how to do sales & marketing – because we do a lot of that when dealing with our parents, teachers, siblings. We’ve just forgotten to apply those skills in the context of our work.
- The large markets are in the US, so how do you build a good sales and marketing organization? The best people in the US are both expensive, and hard to find.
- India now has customers who are willing to pay for tech products. So it is possible now to use India as a test market, and build a small sales/marketing team based on this.
- Not all sales/marketing has to happen on the ground. You can achieve a lot with the internet and phone.
- The market of the future is not necessarily in the US. For example, new technologies, the US is a maturing market (i.e. there are legacy products and you have to convince people to migrate) whereas less developed countries are green field markets who are more receptive to new technologies.
- The most experienced companies in the world are not just building great products – they are building great customer experiences. And experience is everything – from how the customer first hears about your company, how your product functions and makes the customer feel, and afterwards, if there is a problem, how you handle the problem and how you treat the customer. You need to be building great experiences. Example: craigslist is the top classifieds site in the world, but has a not-so-good experience. AirBnB took one small slice of this market, built a great experience around it, and now has a billion dollar valuation. DropBox makes the experience of backup and file-sharing so smooth and unobtrusive.
- The biggest challenge in building a company is how to build the right culture. Before hiring, Pune company InfinitelyBeta makes prospective candidates build a mini-product and then review that code. Hence their hiring process takes 2 months. But then they know exactly what kind of a programmer they are getting.
- Pune is ahead of other Indian cities as far as people building or interested in building products. This is probably because Pune has traditionally not had that many software services companies, and it has had some large development centers of product companies (like Veritas/Symantec, nVidia), so the product DNA has thrived more in Pune.
- Because it is ahead of others in product orientation, Pune is the Indian city that is best positioned to be able to reproduce the Silicon Valley ecosystem.
- It already has a microbrewery (like Silicon Valley’s Gordon Biersch), so an important component of the valley culture is already here
- Currently, top Indian tech universities (like IITs) are quite isolated from the industry. But as more and more product companies start coming out of India, there is likely to be more collaboration between universities and companies. So we should start seeing more of this in the next 5 years.
- We are getting into an era where fast response to changing conditions is much more important than protecting your intellectual property. Thus building an agile engineering organization is more important than getting patents.
- You can build a B2C company immediately after college, with minimal experience. But building a B2B company really requires you to have some experience in the industry.
- Challenges of selling into the SME market in India: Selling products for the SME market is tough for the following reasons:
- No one has really solved the problem of distribution. Creating a product that SMEs find interesting is not good enough. Creating an efficient system for selling the product to a large number of SMEs remains a challenge. Often the cost of selling a product to a customer turns out to be higher than the income from that customer. And it is sometimes easier to sell to large companies than it is to sell to SMEs (which tend to be very price and feature conscious)
- Far too many Indian companies in this space are creating products that they think SMEs want, but in reality, SMEs are not really that interested. Finding products that SMEs really want is very tough. Few startup founders have a good understanding of the SME space.