Somehow the “rules of the game” for the recent consumer software (Web 2.0) seem a lot more simplified than the same for enterprise software. I have read these rules from various sources so I may not be able to identify the sources (that’s not for the lack of attribution). Clearly some rules are very valid in both cases, but as you try to implement these rules, you realize quickly they are not always the path to success. So I thought why not examine these rules and figure out which make sense for enterprise software.

1. Release early: When I refer to enterprise I usually mean companies that make over $1 Billion in revenue. Having sold to enterprises for years I thought I know the rules of the game, but figured the Web 2.0 revolution had changed some of these requirements. Not exactly. Large enterprise still want a highly scalable, robust, secure and “complete” solution. They would not consider a Twitter (with its frequent failures) as a system to pay money for. While at Ariba, we had a alpha version that we called beta and a beta that we shipped as final release to 3 customers. The first few customers literally threw it out. It just did not work and was out too early. It was feature complete & had a very intuitive UI, but would not scale. So the first 3 customers refused to deploy it in production, until those issues were solved.

2. Release often: I have not used Friendfeed a lot, but I know they keep adding new features very quickly. That sounds very cool and seems like they are a company that does things quickly. With enterprise software however a version every other week means user training. I am often asked about the training requirements for customers. “Its simple and needs no training” is what I was told. Not exactly. When you are solving a business problem that’s complex primarily due to the global nature of a large business, users expect training. Think of Microsoft Word. How long have you been using it? Its so easy to use that my 4 year old can use it with no “training” and he does. But try rolling out Office 2007 and you get a training budget that runs into 7-8 figures for most enterprises. Is Microsoft Word “complex”? My son will say No. But over 60% of enterprises are not rolling out Office 2007 since the training costs are higher.

3. Focus on user acquisition then on revenues: I am not sure any enterprise company can realistically go to their investors (VC or otherwise) without a clear revenue plan. I am truly amazed at how many Web 2 startups that are funded have no idea about their business or revenue model. I do know of how Yahoo, Google, etc. all got started without a business model, but they “figured it out” as they went along. But I have to admit, I dont subscribe to that line of thinking. For every Yahoo and Google there are 50 other companies that got started without a business model that failed.

I would love some feedback from some consumer or enterprise software startup entrepreneurs who have successfully followed these rules and achieved success.

Mark was itching to start a new company. It took him over 15 years to establish his business and it was a great success from his perspective. Starting at a small retail outlet reselling home essentials, with a very modest $7500 inventory investment, he had grown it to over $7.5 Million in annual revenues. Now 15 stores adorned with every possible home furnishing accessory, dotted 12 cities in the county he was born and raised. It was a tough road and he learned many lessons. Not to mention he made a lot of good friends in banking, accounting, retail and local government. He employed over 100 people (mostly women) in his business, provided them good benefits and was respected as a pioneer among active retail promotion strategies. His business by most measures was doing very well.

Perusing through the Bay area parenting magazine while helping his 8 year old with writing homework, he could not help but notice the number of help wanted ads for local nurses. An opportunity?

Quick call to his accountant might be in order? 9% margins; which were 3% better than his peers and competitors suggested to him some calculated risk taking is required. He requested and paid for a good local jobs analysis, spend trend report, demographic profile report (indicating how many senior citizens were to settle in his county in the next 10-15 years), market availability and pricing analysis and a list of top 25 local county hospitals.

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She had enough of it. For the 19th time that week, Susan responded to the thank you for your job application email with large frustration writ on her face. Its only Thursday and I am up to 20 rejects, she muttered to no one in particular. The tabby only moved her eyebrow as if to indicate that should be sufficient to appease her roommate. The M mark on the cat’s forehead looked like it stood for mockery. Susan contemplated going down to pick up the mail, when it occurred to her that she had not watered the plants for that week. Am I losing it she wondered? It was over 8 weeks since she was laid off from her administrator’s position at the county library.

The shrill ring on the phone startled the tabby cat. Susan picked it up. The voice on the other side asked her if she’d be interested in “getting some literature” on the latest nursing programs since it was the career opportunity of a lifetime. For the 11th time she hung up saying no, making a mental note to register for the DNC list by days end. It then struck her, how many people had called her over the last week asking to enroll for their nursing program.

Getting online she identified the number of her “virtual friends” who were all looking for a position to be close to 15. Sensing an opportunity she called St. Stephens to ask them about the number of open nurse positions.

Gratified that it was significant, she decided it was time for Susan Associates to make a headway into the nursing recruiting business and placed calls into 4 of her friends to try and get them to sign up for nurse training as a part time vocation. 90+ calls ensued in the next 15 days, some positive but mostly rejections. Undeterred she kept making calls and adding to her virtual “will call you back to keep in touch” friends, actively seeking part-time nurses.

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1. So, 5 year’s later, who succeeds in having a nurse recruitment business? Is it Mark the experienced businessman or Susan the fly-by-the-seat-of-her-pantsuits entrepreneur?

2. How important is it for the entrepreneur to do the detailed analysis and segmentation of the market potential than to “just do it”.

Over the last few weeks I have had a chance to go to Mumbai, Delhi, Chennai and Hyderabad from Bangalore (besides Goa) via 5 different airline carriers – Kingfisher, Indigo, Spice Jet, Jet Airways and Deccan (Kingfisher’s low cost carrier).

There has been a boom in Indian aviation business in the last decade and over 30 new low cost and full service airlines have benefited from the growth.

All the major airports in India were in major need of renovation and they are all in various stages of it.

My assessment of the airports is based on 5 criteria:

a) Ease of access / location – how easy is it to get from the airport to where I want to get to – including taxis, mass transit options etc.
b) Availability of restaurants – not being much of a shopper, in many cases I am rushing in from a meeting or rushing out to catch a flight, so grabbing healthy food is very important
c) Overall cleanliness of the airport
d) Speed to get to gate – time it takes for checking in, security clearance, etc.
e) Availability of waiting lounge space (or waiting areas in general)

Of the major airports, Hyderabad is the BEST by a mile. This is a totally new airport, so I am sure Mumbai and Delhi (which are undergoing major upgrades) are going to get better. The airport has been privately built and managed by GMR (which also is working on Mumbai, where unlike Hyderabad it does not have a clean slate to work from).

Even though Bangalore is new (a month newer than Hyderabad), it just pales in comparison to Hyderabad. Its smaller, more cramped, less clean and has a lot fewer options for good food (or shopping).

Of the others, Delhi and Chennai are the worst so Mumbai gets ranked in the middle.

Why I like the Hyderabad Airport:
1. Access is good, and getting better. There are buses, taxis, an upcoming Metro project and they look spanking new and clean. Mumbai is the worst and absolutely crowded. It took me more time to drive 4 miles out of the airport than to fly from Bangalore.

2. Lots of good food options (especially since most Indian flights are delayed by at least 15 min minimum to an hour plus at the worst case). Delhi is the worst in this regard.

3. Restrooms, pathways and aisles were all very clean and constantly being cleaned so I was impressed with their overall ability to keep it well maintained. Bangalore airport, on the other hand already looks old. Delhi, Chennai and Mumbai were all dirty even though both Delhi and Mumbai are relatively new.

4. Its a little further away from the city (similar to Denver or San Francisco) so options for a train are not yet great, but you have lots of taxis and buses that were reasonably priced. Bangalore is comparable but the traffic once you get into the city just stalls.

5. It was fairly fast to get in and out and you did not get overwhelmed at the exit (which happens even at the new Bangalore airport with the number of unsolicited visitors offering taxi or transport services).

In terms of the airlines between Kingfisher and Jet Airways (both are full service) I preferred Jet – very hospitable staff and more punctual. Among the low cost carriers there was not much to choose from, but SpiceJet is moderately better than Indigo and I would not at all recommend Deccan.

1. Advertising spending in India is roughly one-third of that in the US and Europe.
2. There are now more Indian homes with television sets. India’s 119 million television households
comprise about 60 per cent of the total households in the country.
3. About 50 million receive cable-television services, leading to a penetration of about 42 per cent.
4. The Indian DVD market now exceeds 1.5 billion
units (not DVD players) per year. This figure is expected to grow to 4.5 billion units
per year by 2010.
5. Total Indian Advertising market = $111 Billion in 2005, $150+ Billion in 2008.

Back to the Bay are by Friday. Hope to catch up with everyone there. Wonderful 2 months here in India. I need up upload images.

Saw AdMob numbers and some of the analysis both pro and con after that. I have to be in VentureBeat’s camp – AdMob is onto something (at least in India).

Granted India figures #2 in Admob’s advertising geography with about 349 Million requests. But that’s part of the story.

Lets get some facts first, (some of this information is proprietary, not confidential from the carriers who I spoke with).

1. Total subscribers in India = ~240 Million, growing at  15% annual, most of the growth (over 60% of that is rural, not urban, which most carriers are claiming is “saturated”, not sure I buy that).

2. By Technology GSM providers have 66% market share, the rest are CDMA. Most of their data networks are still as ancient as the US carriers (GPRS anyone?) and hence slow.

3. The top carriers: Airtel, Vodafone (Essar/Hutch), BSNL (and MTNL) and Reliance. # of subscribers of data plan on the mobile is about 1% in GSM and less than 0.7% in CDMA – that totals to about 1/2 Million (about 1-2 million, had a typo). Less than 115,000 subscribers of Blackberry.

4. Dominant handset is Nokia. 90% handsets are purchased separately from the carrier hence there are no “subsidies” – This is important – why? The handsets listed by AdMob in the top handset list EACH cost over Rs. 7500 and most cost over Rs. 15000 or about $200 – $400. These can only be afforded by fewer than 0.5% of mobile subscribers or about 2 Million people.

5. The major metros are over 80% of “Internet traffic”. So which mobile sites get all the traffic – #1 is video (You tube & Porn), #2 is News (indiatimes, rediff), #3 is social networks (Okrut, Facebook), followed by services (jobs – naukri, etc.)

6. By Demographic: Given the price of handsets, data plan fees, propensity to have more time, the only market segment that’s even going on the Internet to view those Admob ads are: Urban professionals and College kids.

So why are marketers saying they are going to RUSH to mobile advertising & skip the PC? – Disposable Income growth.

If you can afford $100 for a phone in India, put up with poor Internet connection on your phone, handle the small form factor and still pull together 300+ Million views, you ought to have 2 things – time and money.

For many of these professionals and students the mobile is their entertainment, information source, their way to keep up with friends, etc. Most use it during commute – which tend to be long.

BTW, the other segment that’s possibly going to get on this bandwagon of the web is the Urban off-the-grid crowd, if only they can get their headsets off the Nokia mobile radio . Fat chance in the next 2-4 years is my prediction.

I always wonder how 9/11 has changed the world for the average person outside the US. Traveling by plane reminds me of the changes on a fairly frequent basis. Before that tragic day, I would consistently be “a few minutes early” at the airport. Not after. Usually an hour is normal.

I walked into Bangalore International airport (the new one) the other day for my weekend jaunt with 4 other friends. We were traveling to Goa on a Spice Jet (South West equivalent) 130 pm flight. We were at least an hour early and it seemed fairly empty. We all walked up to the entrance with a copy of our eticket (you cannot enter the airport) without a printout of the eticket – (yes, it defeats the purpose of an eticket, I know) and our ID. I had my California Driver License with me.

The amazing thing about carrying identification in India is most everyone carries a “real copy” of the ID. Not the original. So imagine that you have a CA Driver’s license like I do. Now, make a color photocopy of it and laminate it – there’s your ID – and its very widely accepted. Most real id’s are stored in bank lockers for security and no wonder – it takes you days to get a duplicate one if  your original ID is stolen or lost.

I was thinking to myself that we came to the airport fairly easily so we had to expect something to go wrong soon.

Turns out one of my friends had no ID at all. In fact the only thing he had was a 15+ year old copy of his driver’s permit. This was a one page document with a 15+ year old photo of him with lots of hair (he’s lost quite a bit now) and the copy was also 15 years old, folded in 4, torn on the edges and the folds.

Another friend only had 2 Credit cards with his photo on the corner left of the card. This credit card was issued by a local bank and the photo was also over 5 years old.

Another of my friends claimed he left it in his other wallet.

So walking up to the entrance I was expecting quite a stir and thought we might have to catch a later flight, while we waited for them to get their ID’s.

The guard at the entrance was keen to see our paper copy of the ticket. Imagine an armed reserve forces personnel with a serious mustache in official uniform. He looked at this thing for what seemed like a few minutes, and then looked at the 5 of us and nodded. No words, no looks just a nod.

We all stood in line to show our ID, with me going 3rd. He looked at my buddy with the credit card ID, glanced at the name and gave him a go ahead.

The next part was amazing. While we all were ready with our ID, he simply said – “Why are you showing me so many, I dont have time, go ahead. One person’s ID is enough, dont waste my time” – translated from Hindi.

He did not check any of our other ID and just waved us all through. I was obviously amazed, but none of the others were.

Expecting another ID check at the ticket counter, I had it out for the boarding pass. Nope, I did not get a chance to even go to the SpiceJet counter. My buddy went and got the boarding passes for all of us.

Okay, so much for security I thought.

Well this is step 2 of airport security in India. You next go through the security check and baggage screening. Every bag you carry on board gets a tag which gets an official stamp after it clears X ray screening. If the screener forgets to stamp your bag and you try to get on board, you’re outta luck – you have to go back and get it scanned again & stamped.

After this, you get the boarding call, where the boarding pass and your bag get screened to see if you have been “stamped”. Still no other security check for ID.

After you get your boarding pass reviewed, you get on a bus to get to the plane (most planes dont have aero-bridges).

Finally there’s another review of the boarding pass at the foot of the stairs to get on the plane. You’re boarding pass gets a final check here and one in every 4 passengers gets another boarding pass “check”  on the plane by the air hostess greeting you.

No less than 5 checks each time you board. So why do I still feel mighty insecure on the plane?

As most marketers would advice you: market where you customers are. The top 3 ways to spend your money in marketing is dramatically different from marketing spend in the US.

To recap the US spend:
1. Lead Generation: 45%
2. AR & PR: 25%
3. Marcom: 5%
4. Events: 25%

So how will I change this in India for a software company (regardless of Internet, B2B, B2C, or enterprise software)?

1. Lead Generation: 55% – switch from mostly web marketing (SEM, SEO) to advertising on radio, print and if you can afford it Television.
2. AR & PR: 10% – stick to Press mentions and regionals, magazines. AR is mostly a waste of time spend in India, even in the enterprise. Unlike US and Europe where analysts like Gartner tend to provide 30% of your inquiries, India mostly ignores analysts and “experts”. They like reports, whitepapers, etc, but wont pay for analyst time on research consulting.
3. Marcom: 2% – Costs are a lot less in India for brochures, white papers, etc.
4. Events: 33% – Depending on if you are consumer software or enterprise software, I’d advice you to plan a series of events locally to “meet and greet”. Most people want to know you are “a real company” and not a fly-by-night operator.

So here are my tips on the top 3 ways to market your company:

1. Affiliate Marketing: Inorganic traffic acquisition is hard and mostly hit-or-miss. I would rather hire a Business Development / Marketing professional and partner with a top 20 list of a) Cybercafe providers like Sify, etc. b) Online media properties like Indiatimes, Rediff, etc. and c) Social networks and community sites like Orkut, Cricinfo. You might have to share percentage or revenue, or Pay-per-click or pay-per-action, but its a lot better than search engine marketing on Google. Traffic in these sites is predictable, proven and diverse. They offer the quickest path to prospects for your organization.

2. Contests & Games – Mobile Marketing: SMS in particular is very prevalent regardless of the enterprise or consumer demographic. Try to integrate your contests and games with general public events like cricket or launch or a movie etc. to get topical traction.

3. Regional events (Breakfasts and Dinners): If you are in a major metro like Mumbai, Bangalore, etc. then plan on having multiple city events since distances are large and traffic is unpredictable. I would divide the city into 5-6 regions where most of your customers are and plan on having events in each region. Like most Asian buyers, Indians like to meet people face-to-face and rarely (less than 1%) purchase major or minor items online or over the phone.

Correction:
1. I hit the publish button too quick. There are many sources for # of Internet users in India.
a) Rediff: 38.5 Million, growing at 40%
b) InternetWorldStat: 42Million in 2007, 60 Million in 2008, Growing at 28%
c) Hindu: 37 Million in 2007

As I talked about it before, the the number of broadband subscribers in India is small..
1. Only 28% people have broadband access at home. Of these, over 75% have only 256 Kbps. The growth of broadband is less than 15% annually – granted this is the fastest growing of the lot but in absolute numbers still small.

2. About 10% of users come via Cyber Cafe’s. For Indian Social networks and gaming sites, this is nearly 60% of their traffic.

3. Most work related Internet is heavily monitored and restricted which means your users are primarily spending time coming via home using dial up.

So, your India internet strategy better be slow and steady.

I saw this very cool chart on advertising from Erik on Techcrunch (via First Round Capital)

Newspaper spend in US is about 10% of total advertising spend and is receding at 7% YoY.

Compare this to advertising spend in India:

1. Newspapers (46%); growing at 6% annual. (household reach = 65%)
2. Broadcast and Cabel TV 41% growing at 8% annual (household reach = 55%)
3. Internet (<1%) growing at 30% (household reach = 10%)
4. Radio (5%) growing at 10% annual

and now for the kicker:
5. Mobile (<0.2%) and growing at 80% (household reach = 25%, but growing at 25%)

Indians still love newspapers and subscriptions to physical printed news are increasing not decreasing. The word among the marketers is that they may completely miss the Internet and move direct to the Mobile.