Month: May 2016

Make Money and Sell else Sell and Make money!!!

Consolidation

Flipkart cannot be a yardstick or trendsetter to be worried. Flipkart is one such operational failure and not idea failure. So don’t take Flipkart “alone” as a yardstick and worry.

As I mentioned in my earlier blog, goo.gl/EPF6vQ there are many reasons for a startup to fail. Also, it is not true that every startup will fail because of nonavailability of funds.

It’s been almost 5 years the funding fever has started and it was in real peak during 2012-14. After 2014, the slowness in funding has started and now it is taking a different course from the concept of ‘funding”

Before taking any further step, just sit back and evaluate whatever you have done to your startup till date and take the correct course correction. But you should try to do this exercise only if you are ready to accept your mistakes and more than that ready to correct yourself.

Else this exercise will not yield any expected result. The foremost action to be taken is to cut down the unwanted salary paid to people who are really not required for your company.

They may be very good in their respective subject. But they may not be required at this stage in your company. So do the evaluation properly. Don’t send out any required resource from your organization.

We have done this exercise and we were able to increase the efficiency by 23% in the last 2 quarters. This has given a ray of hope for us. We have started seeing a direct increase in our profitability.

So before running behind “funding” just look back, evaluate, and redo your math and see what exactly is your financial situation now and if it really matters then go for funding. Else increase your sale by deploying good sales professionals and sales methodologies.

In spite of this, funding is not going to happen as how it was earlier. So I close my company then? No. After every trend change in the business Industry, there will be a new trend taking birth. Take the track record from 1986 if you have the data. There was a paradigm shift in the global business line happening after every slowdown.

If you don’t do the course correction within that time, you will end up in failure. If you evaluate 1M as your requirement and compromise with 250K you are already screwed. You cannot hold your breath and sail until next set of funding. 

What is the new trend then?

It is called Consolidation. Yes, don’t just go for the funding. You could have seen the real scenario by this time going behind the funding.

The new trend is, take Flipkart and Snapdeal as an example. They are now in a real bad shape on their revenue. But do you think that they will wait for another round of funding or just go ahead and shut the business? Neither, they will go for strategic purchases.

In the year end 31 March 2015, there was 69 technology M&A happened in India and this fiscal year ending 31 March 2016 it has doubled to 146. That means 146 startups had already taken a wise decision to make the required profit by taking the course of M&A rather than waiting for funding or next level of funding.

Of course, those large giants are not going to give premium value for the forthcoming acquisitions. They will make you settle for much lesser price.

End of the day, the trend is, nobody is ready to spend much cash as transaction and wants to take the path of stock transactions only.

Make Money and Sell else Sell and Make money!!!

 

 

 

Advertisement

Secret of Hiring a Sales Guy

home_guys

Sales are the Face and Marketing are the head of any organization. It is very true and if we don’t understand the difference then we will end up hiring a wrong person for the right job.

Sales Vs Marketing

To get into that we should know the difference between Sales and Marketing. Whenever I get a chance to interview sales guys I ask this question to them for sure.

Most of them will fail to explain. Some will explain in a very professional way. I will then ask them to summarize the same in a single line. I have seen 99% fail to explain it.

Maybe I am expecting them to tell what I wish to hear could be the reason. The answer I always wish to hear is “Sales is an art and Marketing is a science”

This is the reason we have Discipline as Marketing even in Business Administration courses and there is no specific degree for Sales. You can treat marketing to any person. But you can only train and bring the naturally having sales capabilities from a sales guy. If you force sales to a person who doesn’t have the flair for sales then he will surely fail.

Who should I hire?

International Cold Calling sales team is something which is there only for the last 13 years maximum and in that too very few companies has that capability in house for more than 5 years. Remaining all companies are having the conventional face to face meeting with the sales guys selling or inside sales team fixing the meeting and seniors go and do the real sales face to face.

So if a company wants to set up the new sales team, they will eventually look into those companies which are specialised in selling through cold calling and hire.

Typical Interview with those sales guys

Interviewer: Hi, How are you?

Sales guy: I am good.

I: Can you explain about yourself

SG: I am so and so, working with so and so company and have closed nearly 500K out of two deals in this year both F2000 clients

I: (in his mind voice) WOW

I: Where you able to reach your target?

S: Yes, even I got adjudged as the best sales guy for reaching my target last year.

I: What are your salary expectations and notice period?

Typically it will go and they will hire that guy.

End of the sixth month this guy would be the worst performing guy and either we would have fired him or he would have left the organisation.

I have seen this in many companies out of my experience.

What could be the reason for the best performer of the earlier company not able to perform here?

The reason is us. Yes, it is us!!!

He said he closed 500K with two F2000 clients. We typically took that as “he closed” . The real scenario could not be the same.

He would have reached the right person with his cold calling skills and the brand of his earlier company would have taken the remaining steps to get that 500K deal.

Here, we have seen 500K, F2000, One year target, etc and failed to see the real fact that he was not the reason for any of the above and he was reaching the right person through his cold calling skills and only his company was able to do the remaining.

Conclusion

He is not just the nonperformer we are also the partial reason for the total failure. We have overrated his capabilities with whatever he bloated and told during the interview and failed to judge his capabilities.

So whenever you are interviewing from a most successful company into your sales team try to evaluate his personal capabilities rather than what the company was able to achieve with his cold calling.

Typically, if you are a company size of fewer than 150 employees, then avoid hiring sales guys from company size of more than 200 employees.

 

Vulnerability of using third party tools

v

What is the next big thing in the IT world?

Anyone can say it as IoT. Yes, Internet of Things is the next main topic going to be discussed for a much longer period than any other technology discussed so far.

There are going to be more than 20 Billion electronic devices get connected to a network in this IoT.

We are going to use IoT without even knowing that we are into it. The best example of areas where we will be automatically get connected to IoT are:

1. Media

2. Infrastructure

3. Manufacturing

4. Home Automation

5. Transporation

6. Healthcare

7. Energy, etc

If every device is going to use a unique IP address can IPv4 work with its limitation of 4.3 Billion? No, it cannot. The minimum number if IP addresses required by 2020 would be nothing less than 20.8 Billion. So the use of IPv6 will come into the mainstream here.

All these are acceptable. How secure are our data or we ourself?

This is something very important and crucial in the IoT space. With just one mobile device we feel we are highly vulnerable. The cyber attack is more prominent even now. Think of the situation where we are going to connect even our Refrigerators, Televisions, Kitchen Appliances, Cameras, Thermostat and what not?

The cyber attack is already taking the main stage even now. What would be the situation when we are completely into IoT?

The recent article which I was able to read this morning is more emphasising the vulnerability on using third party tools even now. But it is not possible to completely avoid using third party tools at all. What is the solution then? Where is the checkpoint then?

Major Vulnerability in Freshdesk – Results from a recent Wordfence Red Team Exercise 

What would be the level of exposure we will be into when we get into full IoT and what would be the level of security we would require that time?

Let our Scientists bring a solution before IoT and let us be aware of the intensity of the impact of using vulnerable third party tools now.

Can my Startup sail safely this recession?

Green Road Sign - Recession Ahead

Are we bloating small things to a larger magnitude or our startup situation is this real bad?

I remember 2007 recession and this was exactly the scenario on all tech news sites that time. Social media was not this prominent then. But since I was in the US that time I read a lot of shutting down news like these.

America was matured enough to handle 2007 recession because they learnt from 2001 recession already.

Recession 2001

2001 was dot com bubble burst and though it was recorded for 8 months only, the effect lasts for three years and unfortunately, Sep 11 happened at the tail end. The total unemployment was just above 6.3% then. It was after 10 years from the earlier recession which gave a big room for the companies to play safe (earlier recession was during 1990-91)

Recession 2007
But 2007 recession was housing bubble burst with banks going into the huge financial crisis. The recession lasted for one and a half years with the unbelievable unemployment rate of 10.3% with a GDP dip of -4.3%. It was called as great recession of US after 1929-33 recession.

Since all the above was epicentre in America, they had the courage and experience to overcome those.

Asia’s Great Recession 

The current Indian IT recession is of Startup and Marketplace together. The profitability of this predicted 2016 recession would be as bad as 10%, predicted by Morgan Stanley.

Even though the economy of India seems to be at a steady growth rate, the Government will not be in a position to bail out anyone here since it is from the Startup and Marketplace sector and not from large players.

Even if Indian Reserve Bank wishes to lend hands to these Startups and Marketplace players by lowering the lending rate to banks, they don’t have much elbow room this time like earlier to jump to the rescue.

Recessions are compared to Flu. It will surely affect even if you are in the vicinity. This recession was earlier mentioned as “around the corner”. But the signs what we are getting across the globe, particularly the hopping of Chinese bubble has now made to say “India has already started walking into the recession”

Recessions are very much part of macroeconomics that happens time to time in the entire world. Since this time it is going to be Great Recession of Asia, everyone is keeping their fingers crossed and making all arrangement to cross the chasm peacefully.