building global companies - experiences shared by samir from shopsocially

Company Confidential 1

Challenges of Building a Global Software Company from India

Samir PalnitkarJatin Parekh

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The PresentersSamir Palnitkar President, ShopSocially• 22 years of experience• 5th startup. • 3 started in US (I2P, Obongo, Ingot)• 2 started in India (AirTight, ShopSocially)

Jatin Parekh, VP of Product Management, AirTight Networks• CoreObjects, IMR• Founding Member at AirTight Networks

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1 min Attendee Introductions

Your NameName of CompanyYear of Founding

What does the company do?How many people?

Funding Status?Approximate Revenues <$1M, or >$1M

Why are you trying to go global?

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Suggested Agenda

• Interactive Presentation• 15 min break• “We ask, you answer” session• Open Q & A

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Ground Rules

• Leave all mobiles switched off except during the break

• Please limit “air time”• Be succinct

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Why are you going global?

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Let’s Get Started with the Challenges

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The Team

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Challenges

• How to hire your first US employee?• What should be the background?• What do you pay them?• What will they do?

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Some solutions

• Bring on a co-founder or an employee with a high equity stake– The person must have his/her “skin in the game”

• Must not ne his/her part-time activity

– Find someone who will take less cash• You should have a history with the person• You should trust the person completely• They should be prepared to do what it takes. No set

role.• How are you solving this problem?

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Funding

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Challenges

• Where do you get the money to hire a US team?

• How do you pay for US marketing costs?• How do you pay for a US office?

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Some solutions

• Raise money – at least $500k, ideally $1m.– Less than that you will not be able to sustain the US office

• Start enough cash flows before expanding into the US• Do some services to generate cash

– Set up a contract with a company to get paid on a contract basis– Give them a non-exclusive lifetime license– CAUTION:

• Too much services revenue can derail product focus• Too much customization for early customers can make product very

narrow

• How are you solving this problem?

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Operations & Logistics

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Servers & IT• What we did earlier

– Discrete servers and dedicated hosting centers• IT a huge pain

– Software and demo delivery through CDs• Everything should be online

• The only viable option is cloud services– Reduced cost– Reduced IT maintenance cost– Complete elasticity

• Hire the best network administrator / manager you can find• Questions

– What are you doing today?– How much do you pay?– How do you reduce costs?

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Product Management

A huge challenge

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Product Management

Sales Marketing Business Development

Post-sales Customer Success

Product Management

R & D Quality Assurance Collateral DevelopmentCustomer Support

Global Split

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Challenges• Where is PM to be located?

– Near customer OR– Near R & D

• What is its focus?– Customer focus OR– R&D focus– How to manage undue R&D or customer influence?

• Where is the decision making?– Outside India– In India

• Are decisions clearly communicated?– How are they communicated?– Are the motivations behind each decision clarified?– Do engineers understand the “higher purpose”?

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Some Solutions• Frequent Travel for Product Managers is a must

– Once every 2 months– Customer visits are necessary– Difficult personally

• Prioritization and estimation must be very clear– Clear prioritization from the US team– Clear estimation from the engineering team

• Drive a strategic direction for the product– Get executive and sales buy-in– Resist defocusing for tactical wins (specific sale, engineering shortcut, etc.)

• Frequent Calls across the border– At least 2-3 times per week or more

• Priorities must be clearly published• How are you solving these problems?

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Engineering

Usually located in India

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Challenges• Split engineering

– Who to have in the US?– Who in India?

• Too much distance from the market– Motivation problem

• Cultural Differences– Timeliness– Team elasticity (frequent hiring and firing in the US)– Team malleability (work expectations, growth expectations)

• Too many exit points for engineers– MBA, Studies abroad, peer pressure to work for a big company, better

salary, relocation due to marriage• Ready-made talent is not available e.g. as in Silicon Valley

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Solutions• Keep only customer facing engineers in US

– Rest in India– Keep core R&D in India

• Bridge the distance from the market– Internal marketing a must– Frequent updates– Frequent motivational discussions with India employees

• Cultural Differences– Coach your employees– Write a guide on the cultural differences

• Exit points– 1-1s with engineers every month (difficult, but must)– Keep them thoroughly informed of any positive developments

• Hiring– Hire young and groom. Keep hiring fresh talent. – Churn is a fact of life. Minimization is the only option.

• How are you solving these problems?

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Marketing

Can be a split function

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Challenges

• How to split?– Conferences, Public Relations etc. in the US– SEO, SEM, Social Media, Graphics & Collateral Creation, Website

Maintenance out of India• Expectation Mismatch

– US teams are very “look” oriented– India teams are very fact oriented.– India teams are not perfectionists

• Communication is a challenge– Specs are often interpreted differently– Perspective is very different– The quality of collateral has to be extremely high.

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Some Solutions

• Split– Keep all things that require a handshake in the US– Keep operational items in India

• Expectation Mismatch– Teach India team to be perfectionists– Bring in a “look” oriented perspective– Engineers should avoid contributing to marketing

• Communication Challenge– Use a versioning system to share collateral (Dropbox)– Have frequent calls (not all US team members are willing to talk in

the night)• How are you solving these problems?

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Sales

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Some Challenges• The split is very hard to decide

– Sales must be located close to the customer– If your product requires a handshake, then you need a US team member– Even if it does not require a handshake, you need a member who can

stay up in the night and take return calls• Things that can be done remotely cannot be done effectively

because of lack of coordination– Prospecting – Cold Calling

• Coordination between sales and engineering is missing• Motivation and sense of belonging for the sales engineers is

missing.

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Some Solutions• Stay close to the customer (virtually)

– Many sales are done on the phone. No need to meet.– Get a US phone # and redirect to India cell (google voice + localphone)– Be ready to respond if the customer calls back– Don’t use Skype, works badly

• Prospecting and cold calling can be done– Prospect via LinkedIn– Do cold calling campaigns from India

• Coordination– Use Salesforce or a similar tool– Get engineers to talk directly with sales engineers without an

intermediary.• How are you solving these problems?

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Support

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Challenges

• The Split– Who goes where?– What should be in the US, what in India?– How does the support team talk to engineering?

• Communication– How to synchronize between the teams?

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Some Solutions

• Split– Keep some customer support staff in the US OR

keep some staff in India on the night shift– Phone connectivity should be very good– Support team should communicate frequently with the product

manager and the engineering team• Communication

– Use of a CRM is a must (e.g Salesforce)– Regularly create a list and send to engineers. Discuss problems with

them live.– Create a core customer support team within engineering on a

rotation basis.• How are you solving these problems?

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We ask, you answer

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What is the biggest challenge facing your organization?

How are you solving it?

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How do you decide product priorities?

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How do you do your online marketing?

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How do you generate leads?

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How do you attract new employees?

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How do you handle employee attrition?

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How is selling in India and US culturally different?

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Open Q & A

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Thanks

Samir Palnitkar (samir@shopsocially.com)Jatin Parekh

jatin.parekh@airtightnetworks.com