Note to readers: Hello world is a program developers run to check if a newly installed programming language is working alright. Startups and tech companies are continuously launching new software to run the real world. This column will attempt to be the "Hello World" for the real world.
More than 1,000 software product startups from India generate a combined revenue of $2.6 billion, according to a new report. The Software as a Service (SaaS) industry in India is growing fast with over 10 unicorns—companies valued over $1 billion—and more than 40,000 employees, the report by McKinsey & Co said.
In September 2020, I’d argued in this column that India should focus on its strengths building software as it chases its dream of becoming a $5 trillion economy. The McKinsey report points to the fact that the country already has a strong foundation to spawn many more SaaS unicorns.
Most Indian companies, ranging from Freshworks, the company that I work for, to Zenoti, a Hyderabad-based SaaS unicorn, started with a familiar playbook where customers largely have been small and medium businesses in the US and UK. This was possible because we built products that could be quickly sold online.
At the risk of oversimplifying, let me explain the typical buyer journey. Say a user has a problem and searches for a solution online. A startup that solves the problem pops up as a search result. User lands on the startup's website, tries the product online and buys it online. You can sell to most small and medium businesses this way. Here you don’t have to go knocking on doors or have field sales to sell software.
But as Indian startups grow more ambitious, they’ll need to start selling to larger enterprises where the technology purchase decisions are usually made by top executives or department heads. This means startups can’t only rely on search results or digital advertising anymore. Startups will now have to build an outbound marketing and sales engine on top of our current ways of selling. The good news is that companies are beginning to tap into top executives who have done this before. The idea now with several of these companies is to strengthen their product marketing teams and also define and communicate the value proposition to enterprise customers.
Once that’s done, it is time to run campaigns. “You want to start layering in some campaigns, whether it’s through digital marketing, in-person events, or integrated outbound campaigns,” Stacey Epstein, chief marketing officer of Freshworks Inc., told me. Companies also need to work on top-level branding, awareness and public relations as they target more enterprise customers.
This is also a good time for companies to avoid falling into a classic trap where they forget to relook at their ideal customer profile and positioning. As April Dunford, the author of Obviously Awesome: How to Nail Product Positioning so Customers Get It, Buy It, Love It, told me, the way your customers perceive your product needs to change as your market changes. “Sometimes a well-positioned product becomes poorly positioned because the market has shifted. And you need to revisit positioning regularly,” Dunford said. As India’s SaaS companies aim to grow bigger, the old playbook is getting an upgrade.
