I often wonder to myself what is the hardest part in running a startup. I think back at my own days, and even at the present, analyzing the market, building the product, doing the test, finding a few initial trial clients, getting a mentor, finding one or two folks to help out, and even getting funded is fairly do-able. One of the hardest aspects of running a startup is in the art of selling. When you are a startup, when no one has ever heard let alone know you, and you are fighting every inch of compelling reason as to why you shouldnt just start customizing your products to everyone’s wits and whim and eventually become a service organization, it eventually does get to you.

Perhaps thats the reason most startups feel compelled to go after funding. You get funded, and you have a high chance of getting profiled on Contentsutra, covered by the other usual suspects like VC Circle and Venture Intelligence, which might lead to an article or two on the economic times – and heck, you might even be techcrunched.

Perhaps all this visibility, gives that illusion of discovery. And raises the hopes that selling will become easier.

It actually doesnt, by much actually. At times it even makes it worse by putting too much pressure and expectations on the founders.

Here are a couple of tips to get your started:

1. Building a Brand, and especially a following is a continuous excercise. Not a one time one.

2. Engage with your audience, and use a tone of familiarity and respect.

3. Ensure that responding back to queries is in the highest order of things, even if its not a relevant query.

4. Frame a message that is easy to convey. Dont confuse your audience with complicated novels as to what is it that you do, build or sell.

5. Keep your communication channels Personal. Not Info@blah.com. Use Name@company.com instead. Accesibility is an attraction in this layered, complicated world.

6. If you haven’t already, start a blog. Now!

7. There are a gazillion social media tools available to build a brand, a community, and the referral network to create impressions. Use and exploit them.

8. When the time is right, hire a PR Professional.

9. Attend Local barcamps, MoMos, and entrepreneur meets, as well as tech meets, and if given a chance do leap at the opportunity to share.

10. Visit universities and colleges, and the entrepreneurship cells. It’s a fabulous way to build a group of influencers for your brand.

11. Have an active social life. When your company is small, you are your company’s brand ambassador. No one wants to use anything that a dead-zombie-walking, has to offer.

12. Read, and comment on blogs, not just within your circle, but expand to what and where things are not the same old. Different does not mean wrong – could actually mean insights.

13. Keep a close eye on campaigns that youth organizations launch. Replicate such things on a smaller scale to grow visibility.

14. Once a year make it to a trade conference. Pick which one that is going to be. Start a six month campaign beforehand, get to know who all are going to be there, and build relationships towards that. Next year, focus on a region where there would be a fresh set of guys.

15. Leverage your mentors and their contacts.

16. Be nice to folks from the media, and bloggers. Not fake nice, but respect.

17. If you are selling to enterprise customers, run in circles where you can grow your influence. NASSCOM, TiE are sample corridors to be in.

18. Don’t sell, but create an awareness. It takes almost six pitches before someone actually makes a decision to buy. Pitch, without pitching. In this nagging world where everyone is almost a salesguy, be the marketer for once, and create your differentiation. Let them come to you and ask, if they could setup a meeting sometime to discuss.

19. Following up on 19. If you have been a salesguy all your life, people are going to avoid you like that insurance selling cousin of yours. Thats when you know you should stop doing what you are doing.

20. Promise and Deliver. Satisfaction = reality – expectations. Set the expectations right, and always over-deliver on what you promise. In this world of hype, people will stand up and notice you for your deliverables.

21. Constantly ensure that you listen to the feedbacks that you receive, do analyze them, validate them, set your pricing strategies updated and evolve in time. Keep this as an active process.

More to Follow.

You know, for the sheer amount of noise and echo that used to be carried around under the tag of “Long Tail”, things have mellowed down quite a bit lately. But I think there is an increasing awareness among internet startups on the 3P model (Product x Price = Profit) which is looking at means of revenues beyond just Advertising. Not all services can be free. It simply cant be so. While providing the service for Free to the end-user and charging someone else is one model, its just that – just one of the models.

Unlimited creation, creates unlimited consumption. That was what was spoken about the Long tail. If we have to cut through the middle and divide the “people” of the long tail, they are essentially the 80% of the people who arent contributing to the top of the pyramid. They are producing content which is probably not upto par yet. They are major consumers of alternate products. They have their own way of doing things – cult / opensource etc etc.

All of these are opportunities to monetize, while you are serving this segment.

Point #1: Consumers are the ones who really benefit from the Long tail.

Search Youtube for just about anything and you would find it. Because the range of production is so vast, any consumer has the option to consume what he wants. Look at blogs. There are blogs ranging in the millions out there which amount to a significant chunk of content that is getting churned out – including this very one. Anyone who is looking for stuff to read, has plenty of options. The concept of the “long tail” greatly favors the consumers in terms of options, and drowns the producers taking away attention.

Point #2: Consumer options, dont translate to revenues.

So what if there are 250 million blogs out there? Most blogs dont even get a single person visiting them. So from a producer perspective, the long tail does not benefit by much, if it has to be for monetization.

Point #3: There is plenty of hope.

If there are 80% of the folks within the long tail who are “producers”, its actually very very good news, and the best chance for monetization. The rule is simple. Anyone who can help any segment of this 80% – higher or lower, to “professionalize” their service to move into the higher 20% and make more money, will be more than happy to depart from some of that revenue as service fee to you. So build a product or service that enables these masses to make money, and out of that money, take what is yours.

Thats a reason why salesforce.com makes sense.

More to follow on this.

PS: Do a search on “The long tail” and you will realize that the long tail concept applies to everything from digital media, to internet voice applications, to the sale of wallpapers, to chip making companies, etc etc etc. The applications are wide as the options in the long tail itself.

Up until a couple of years ago, the concept of “First movers’ advantage” had some credit to it – atleast in the web world since it was quite nascent. Lately more and more folks are realizing, and rightly so, that whatever happened in the PC Platform, is repeating itself in the web world. If you are creating a market, moving first essentially means that you are going to be deploying a whole array of tactics – including pumping in money – to get the word out as to this mysterious problem that people have and how we’ve gone for so long without knowing that we had a need for it and now that we do, here’s the solution.

The Only analogy that fits this strategy is what happened in the US when the colonization began. Obviously, everyone was quite familiar with the “yellow Dust” that the native Indians simply didn’t care for. And when the immigrants did arrive, and realize that there was gold just lying there in the river basins, the rush was to essentially get to where no man has even been to – to enjoy the luxuries and wealth that he might find.

I am slightly against the so called first movers advantage, because it essentially means that you are planning to go find a problem – hopefully a real problem – and stake the entire zone for yourself. Hmm. It usually doesn’t work. Here’s why.

The market is global. And News travels fast. By the time you actually create that awareness wave, it will spread much faster than the company can expand operations. It will then turn into the inevitable home turf vs. foreign markets and we all know how that game goes. You start playing defense from day one.

Customer Loyalty is on a lowest low these days. There is no such thing as inherent branding that happens – especially if its in the web world. Sell someone a Sony Bravia, and since its a more tangible product, the branding aspect still sticks. When it comes to services and applications around the web, nope nobody cares. I’d flip in a jiffy if I find a better tool that does what I want to do and expands my productivity.

The First Mover advantage, (a.k.a The Goldrush strategy) works where niche products and brands are in play. For a startup, those are dangerous and long term goals to achieve and there are more pressing needs.

I am lately realizing how many of the hip companies of the internet which was so hot last year, arent anywhere now. I was fighting over everyone to get a subscription about in Scribe and I do like what they do, except that I also have plenty of alternatives. I am not even sure if I remember my username password there. I am sure you can think of many more names that I could. I want to focus on what it takes to build a company that lasts a lifetime or even more. In a day and age, when it seems that most of the hottest companies also seem to be dying off pretty rapidly, that’s a thought that almost makes me smile… and wonder.

There is a basic problem in selling to the masses here in India. In most cases, the idea is great, the business model and most importantly the revenue model seems quite clear, but its the channel to the target customers that is non-existent.

Take the case of amazon.com. You wouldn’t believe me if i told you how many companies and teams that I am personally aware of who wanted to become the “amazon.com of India”. I look around and cant find most of them. Some of them are still around, battered and wounded and are confused about where they are heading and most of them are dead skeletons on the ground. So where did they all go wrong?

Selling to the unaffordable especially becomes very tough, because in most cases, the right channels to reach them do not exist. And even more scarier is the fact that people place very little value on the channels who possibly could get you the audience to the customers you are targeting. No man is an island they say, and if everyone is connected, then there surely must be a way to get to them, right? The smarter ones probably have already figured out where I am heading with this.

In my previous post on this, I talked about how pricing defines everything – or atleast one major element of it. The second aspect that I think is crucial is the matter of trust, and the existence of channels to reach your audience. My analogy to Rural India, and Startups still holds true. I am mighty impressed at myself so far, I must say.

There are probably a few folks, who live and breath social networking who are possibly jumping the gun here and wondering if social networks are the cure to all our problems. Hmm. They aren’t. I think most of the social networks themselves are struggling towards this very end – Let alone for them to help other companies. Not yet.

There was a recent marketing study published saying that the best of infuencers and those who will probably be the most radical advocates for your company and product are probably in the mid-level – the excited, slightly above-average user if you may say so; they are neither the geeks and hackers, nor the every day soccer mom, but the everyday user and consumer who is just excited about finding something new, and yet is not eccentric enough to go hide himself in a closet, but rather shares that information and drives new converts to you. The summary and conclusion of the study was that, at times our target of the market, and those we aim as key drivers, probably are the wrong targets.

Let me get in with a bit more solid case. Pluggd.in has this interesting article on how to do guerrilla marketing for your product, and the example that he goes to quote is that, the best means that worked for one of the cited companies which was working on a web-based Instant Messenger, was to call up a system administrator of a big enterprise and tell him how easy his life would become now that he can let his users to use instant messengers without having to loosen up his air tight security protocols. The result, he says was an “avalanche”.

I do agree with him on that.

If you haven’t figured out by now, Marketing is one of the most crucial aspects of selling to the unaffordable. Unfortunately the traditional means of marketing, by putting up stalls in exhibitions, or putting advertisements over bridges or flying a hovercraft with a sign on its tail is not what is going to drive adoption. Trust-worthy and verifiable word of mouth strategies is what will drive it. The adoption will be agonizingly slow in the beginning, but if you have invested in the right set of channels and messengers to take forth the word about your product and have given them a reason to tout what you are offering, you can most certain rest assured that you too can have an avalanche in your hands – just be prepared to handle it when it shows up.

This Post is the second to a series on the title “Selling to the Unaffordable”. For Previous Post, click here.

Most enterprises in India look to “more economically viable” markets abroad as their target customers. If you ask them why is it that we are never focused on local demands, and the market that is seemingly so huge and is often quoted to be one of the fastest growing, the response is usually the same: “They Cannot afford this service”. Despite, seemingly valid claims, the stability of an economy depends on diversifying your target markets and India being this large pool of potentially huge market is being eyed by foreign companies as a last hope and last stand for their company stability, all this while we are still looking elsewhere for our hope to shine from.

An average television viewer cannot afford the cost at which shows are produced. A startup cannot afford to get a paid mentor onboard though it might essentially be the secret sauce of success. Most developing countries cannot afford the lifestyle that developed countries take for granted. Most booming economies still cannot afford the price tags of “brands”. Folks in Chennai, bangalore and most of the growin ‘n’ emerging urban centers cannot afford housing within city limits. Most people in rural India cannot afford most of what urban india consumes and produces. If you really think about it, in the economics of transactions, very little is part of the category where people can really afford it. For everything else, there is mastercard I wish it was simple as that.. But nope, I can only wish for that.

This is also a train of thought that has been going on in my head partly because I work with two verticals. Startups and Rural India and both of them have a small and interim cash flow problem. Alright, perhaps a slightly bigger and long term cash crunch problem. They are both probably at the extreme end of the “affordability” spectrum but they are very much alike. Both are valued and perhaps looked upon as the fastest growing, and the next big thing to happen and corporates are rightly looking at both of them for their next big growth. The parallels are really strong, and almost face the very same issues.The issue is, who pays for the services rendered to them now so that we can cash in when they grow strong.

That’s when the thought process deviated to look at other case scenarios of transaction, and I do realize that there is very few a time when there is actually a transaction where there is exchange of cash. In most cases, its a promise of payment in installment, someone else guarantees for the liability, or in most other cases, the revenues come from someone else because those third party companies benefit by this medium (perfect example, Google, Television, Radio Channels). There is definitely the phenomenon of Free, that factors in somewhere here as well.

But Free is just one form of marketing and selling. It cant and doesn’t work for everything. The Price of certain goods cannot be cheapened. Brands cannot be cheap. Houses in Urban centres, because of the demand will rise and will always seem unaffordable. Startups cannot afford the hardware, the talent, the mentorship, the marketing support, the legal fees, the infrastructure – all of which are essentials for their survival. Rural India cannot afford some of its core necessities, and free (AKA Aid) is not a solution to their problem since it seeds the cause for several other issues in the long run – the lack of a vision of self-sustainability being one. How do you tackle all these issues?

There is a method to all this madness though. This is probably one of the complex problems in economics and I in no way am an expert on the subject, but there is a lot to learn from observation, I reckon. My understanding is that in economics, money is a unit that is traded against. Anything which is of equal value to that, though might not be actual money, has the same weight, calibre and power to it. If it can be quantified, then it becomes something that can be traded. Thats observation number one. The proof for that is how you trade your car registration certificate for a loan, your assets to liquid cash, your equity to working capital etc. That’s the simple one and one that applies for those who have something to trade. What about those who have nothing but aspirations, and nothing that is tangible enough for a trade?  (Think too poor, Too young, and thats essentially two of the biggest markets in the world)

There are probably no solid answers, and especially not a one stop solution for all those issues, but there are certainly answers. If you do look at what it has taken for “luxury” goods and services to be sold in countries such as India and other developing nations you will understand a key element in all of it. How did five star hotels manage to survive 20 years ago in India when there was barely excess cash flow in people’s hands. How did people manage to sell cars and motorbikes when the average income of an indian showed no feasibility for them to afford it – atleast not the major market. Take a close look at it and you’ll learn quite a few things. As I always say, there is more than one thing to learn from across Industries, and this is a very valuable lesson and one that I am definitely not going to spoon feed you on.

Let me hand you some hints. The cost of that ultra cool gaming machine that you have in your living room, either be it an XBOX or a Playstation costs way more than its retail price. I am told that its sold at a loss (I have yet to verify that, though the BOM for a cell processor and hardware of that power would certainly cost more). Why, is the question? They sell it at that price, so that people can buy them, and will then go buy the expensive games, out of which the game makers pay a percentage in royalty to the hardware manufacturers. Sooner or later you make money, and you make multiples (depending on how many games a player buys). The same parallel goes for the printer companies. Printers are made cheaper, so that ink cartridges can be sold. If you are skeptical about the profit, do the math. A litre of Printer ink costs around a Rs. 90,476 (21 ml for Rs.1900 – HP Deskjet Color Catridge). I am sure you don’t crib about rising oil prices anymore. There is also some very nifty magic that goes behind these pricing mechanisms. You have to strike the balance between keeping it affordable and letting people buy them so that they can sell more machines, and hence price the ink reasonably, and sell more making more money. Lets imagine that we ran a game station company and decided to price the console at so cheap a price so that we can flood the market and get rid of competition. That’d be very smart, and we might even outsmart the competitors, wouldnt we? Hmm.. Nope. Most probably you’ll be feeding a market which will be too cheap to buy consoles and will get them at bargain rates that they would almost never buy original games. And all that math you did about recovering that lost money would just go down the drain.

Pricing is almost THE one thing that would drive or stiffle the rate of adoption. And that’s a statement.

So what’s the conclusion of this matter. There is a lot to dig on this, and I realize that this will break into several volumes. But the first insight is that there is magic in the way you price a service. Something now, a lot of little payments later is an option that would work, and would encourage usage, and the markets being conversational would drive transactions, enabling opportunities for more marketing and selling, and the cycle would continue. If you are a corporate which is trying to sell to a startup, you most certainly might want to take heed to this. There is magic in this madness.