Opportunities are emerging for the Indian Software Product Industry: Domestic and Global
Loading ...Sharad Sharma (CEO, Yahoo R& D India), the moderator of the session began by emphasizing on the opportunity of the Software Product Space – one can get multiple of market capitalization in the product space compared to the service industry.
Mr Sharad’s welcome note was followed by Mr Sudhir Sethi, Chairman & MD, IDG Ventures. He started his session by endorsing the fact that today a large number of Indian software product companies are already consuming or looking for Venture Funding – the fact that keeps his business prospering.
He gave a brief introduction about his fund and shared their experience of financing companies in India. IDG Ventures is a 150m US$ fund, which was setup in 2006. Their investment normally ranges between 1 – 6 mil US$ and have significant preference for startups especially the ones in the product space. They focus on sectors such as Business Intelligence, Retail, Security and Consumer Space (including digital media). Of various companies studied by IDG ventures over the last 2 years, more than 50% have been in the product space.
On customer acquisition, his advice to the software product startups is to take a different route than traditional ‘going to US’ route taken by IT services companies. Whenever possible, he recommends to start customer acquisition with India followed by close neighbors especially Middle East and China, before looking for US and Western Europe. He also emphasized on the importance of collaboration with public sectors such as Defense and Railways. Israel is a great example of entrepreneurial success achieved through collaboration with defense sector.
Mr. Bharat Goenka (Co-founder and MD, Tally Group of Companies) followed Mr. Sudhir Sethi and shared insights from his 21 years of experience of building one of India’s most successful Software Product Companies. For the fact that they leveraged the opportunity of tapping SMB sector in India makes their story even more special and inspiring.
Speaking on the acquirable Indian SMB market, a huge customer base for the Indian IT companies, he said that today more than 3 million companies in India have at least one computer and this number will soon grow to 2-3 times.
He shared the importance of building ‘monopoly’ in the product space unless you want to compliment by offering services. According to him, there are 3 attributes, which are necessary for an entrepreneur to build successful Software Product Company:
- Stubbornness – in the absence of which a company is bound to diversify to offer services.
- Intolerance – first to market, encash early opportunity
- Patience – Although it looks contradictory to the above points, generally companies look for success in 2-3 years.
- Mindset for building a company for next 10-15 years is different than for the next 2-3 years.
Over last 21 years, every quarter he is been advised to diversify but he believe that their stubbornness has given them the leadership position they have today. It is easier said than done because of the large amount of uncertainty or risk associated with the product business.
“Ability to reach out to the customer determines the pricing of the software”, said Mr. Goenka, when asked a question on relationship between product and pricing in the SaaS domain.
When asked on Piracy, he asked a question: “How many people in the audience knows where to buy a license for MS office?”. Only few hands were raised.
Some thoughts shared by the panel members in the Q&A session: Dr Heinz Thielmann in his talk
- Localization is the key. Pricing varies based on geography
- Question to Sudhir – 2 out of 5 have been in the seed space. 1 to 2 million.
Dr Heinz shared his experience in the global opportunities in the Software Product Space. He started from his experience in the telecom product space. To give more time for Q & A, he kept his session short. When asked on branding, he shared the importance of word-of-mouth marketing, especially when done by the customer.
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The information is superb!! thanks for sharing it.