Fact 1: The first version of the iPhone did not have the ‘copy-and-paste’ feature, although the WinMob did, and the classic Mac OS had it, many many years ago.

Fact 2: When Jeff Bezos started operations at Amazon.com, ‘get it up and get it out’ was the motto. Function preceded style and editorial content. Low on graphics and animation, the site loaded fast and excelled at the basics – making it easy to search and buy books.

What can we learn about building software successfully, from the above seemingly straight-forward facts? Quite a few things actually.

A decade ago, many software startups would be in stealth mode for ages, building the perfect product, burning huge amounts of cash – without actually getting users involved. The “build it and they will come” mentality was all too prevalent.

Today, the concept of MVP or Minimum Viable Product is gaining importance. (MVP is not a very new concept – in fact, it’s a core tenet of modern product marketing) Many software companies have started to realize that building software without customer validation and feedback can be a complete waste of resources. Tech start-ups, especially, can really benefit from building ‘just enough’ features that (a) make the software functional (b) enable early adopters to sign-up and pay (c) help bring real feedback from the market.

Most ideas don’t play out the way they were envisioned. Very rarely can you get the right product out the first time you try. By scoping right, startups not only burn less cash but increase their chances of success by being able to take their products to actual customers, fail fast and continue to iterate quickly based on regular feedback.

NOTE to regular readers: We’ve been dormant for a while on the forum now – our apologies – but we’re back, along with a minor update to the forum and we hope to keep the momentum going! Come join the discussion!

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Aspire Systems is hosting a breakfast event in Chicago on December 4th, 2009, titled “SaaS Adoption Challenges: Identify, Measure and Manage”. If you are a traditional on-premise vendor looking to transition to or considering SaaS, please join us for an interactive session on the challenges you can expect along the way and how you can identify, manage and overcome them.

Shankar Krishnamoorthy, CTO of Aspire Systems will be discussing various aspects of what it takes to transition to an on-demand model, or build a SaaS solution from scratch. He will also cover the importance of having a thorough understanding of the SaaS ecosystem.

Date & Time : December 4th, 2009
08.15 am – 10.00 am

Venue: TechNexus
200 S. Wacker Dr., Suite 1500
Chicago, IL 60606
+1.312.924.1026

Agenda:
08.15 am – 08.30 am: Registration, Networking and Breakfast
08.30 am – 09.30 am: SaaS Adoption Challenges: Identify, Measure and Manage
09.30 am – 10.00 am: Networking

Seats are limited, grab yours here!

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Image credit: http://www.star-collector.net/

Roger The Dodger first captured public imagination when he won the MVP honors in the 1971 Super Bowl and went on to become a popular quarterback in the history of (American) football. So what does that nugget of history have to do with SaaS? Read on. After he retired from NFL, Staubach started working in the Texas commercial real estate business. He saw how frustrated commercial tenants were when they dealt with landlords. As you know, buying/leasing office or retail space is not a simple process (http://www.zananetwork.com/business-learning/wiki/real-estate/faq/index.aspx) The traditional real estate brokers were, in general, driven by the commission fee that they could collect from both the buyer and the seller. In the process, a few rules were bent and I guess many a heart burnt. Enter Staubach. He asked: Why don’t we build a company that focuses on being the advocate of the users of office and industrial space? Staubach Co. was founded in 1977 with this simple yet powerful premise. At that time, it was indeed a pioneering effort in the brokerage business to build a company around tenants (as against owners or developers). What he recognized was that taking care of end-users/customers can actually help his business grow. To reinforce his approach, he offered the revolutionary “unconditional guarantee of value” – giving refunds to clients who thought they didn’t get the expected services/benefits. Though the refunds were not frequent, they did happen and it hurt. But for Staubach, there was no other way to prove the integrity and value. Do you now see a connect with the license-fee-mongering-product companies to SaaS and the service culture? Are they any such stories in other industries that can be considered fore-runners for the current SaaS trend in the software industry? Note: In July, 2008, The Staubach Company was sold to Jones Lang LeSalle for $613 million.

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Here is an interesting approach to building software – www.softwarebynumbers.org developed by a team of two with a strong background in the technology industry and academia.

The IFM model tags financial benefits/returns to each major feature proposed for the software. At a fundamental level, it looks at software development as a value creation process which is how entrepreneurs tend to think about businesses at a macro level. An MMF, or minimal marketable feature, is the fundamental measure of software value employed by IFM.

MMFs are discrete units of value creation mapped to specific software features. They are the basic elements of an IFM development sequence. Net Present Value (NPV) is used as the measure as opposed to the usual suspect i.e. ROI. This model is not meant to be a substitute to established models such as Agile or iterative. In fact, the authors intended to strengthen such methodologies by introducing the financial aspect.

A quick description of NPV below (to jog your memory, just in case):

NPV: This is the net result of a multiyear investment expressed in today’s dollars. It recognizes that you would prefer to have $1.00 today to having $1.00 a year from now. If you earn 10% interest on your money, $1.00 today will be worth $1.10 a year from now. Or, the NPV of $1.10 one year hence is $1.00.

By considering the time value of money, it allows consideration of such things as cost of capital, interest rates and investment opportunity costs. It’s especially appropriate for long-term projects. But NPV doesn’t compare absolute levels of investment. It looks at cash flows, not at P&L – the way accounting systems do. Computing NPV requires use of a discount rate equal to some minimum desired rate of return. Determining that percentage may be the tricky part. In general, many IT projects use NPV only for large investments (eg:>$500k) as the process is complex and cumbersome.

ROI: Expected income divided by the amount originally invested

IFM is not new – it’s been around for about 4 years now. While IFM seems rational on paper, I wonder if it is feasible to do something like this in reality. There are several intangibles involved in an IT investment and those cannot be easily accounted for in such calculations. Long-term discipline in planning and execution is required for such initiatives. But at the very least, such calculations will trigger discussions within the product team and lead to evaluation and brainstorming of multiple ideas and options (apart from the heated arguments, fights etc).

At sunset (as against ‘at the end of the day’:) ), every decision-maker knows that data and numbers are attempts at rationalization of man’s intuitions and gut-feel decisions. That may be the single biggest reason why this model will never gain large scale adoption. What do you think?

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Successful software vendors have always built products with a user-centric mindset. Traditionally, meeting the functional requirements of end-users would generally be adequate for a product’s success. However, in today’s Web 2.0 paradigm, it has become imperative for software vendors to design solutions that empower users in addition to addressing the basic functional needs. Hence, software vendors now build solutions that are more intuitive and allow users to access what they want instantly and at minimal number of clicks.

Aspire together with our customer, Biz-LXâ„¢ is organizing an informative webinar where we discuss the journey of building a software solution using Web 2.0 tools such as RIA and mashups, and demonstrate the benefits of such an exercise with a real-time case study.

In this webinar you’ll learn:

- Techniques used to design software solutions to allow better usability
- How to evaluate and select Web 2.0 techologies suitable for your software?
- The business benefits and implications of applying Web 2.0 designs to your software solution

Date: Thursday, Nov 19, 2009
Time: 11:00 AM ET/04:00 PM BST/ 09:30 PM IST

Regsitration is FREE!

Click here to register:

https://www1.gotomeeting.com/register/587477833

Panelists:

Dave Strite
Chief Information Officer, Biz-LXâ„¢

Elango Kanakaraji
Head – Web 2.0 Specialization, Aspire Systems

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Image credit: liftarn

The Panel discussion hosted by Aspire Systems on “Bootstrapping a Technology start-up” evoked a very good response from software startups across the globe and a few consultants/ecosystem partners as well. We had 3 eminent panelists participating (Prakash Narayan, co-founder and CTO of MiCello; Ted Finch, Owner and CEO of Chanimal and R S Ramkumar, Managing Director and founder of MangoDVM) and Bhoovarahan Thirumalai, Board member and co-founder of Aspire Systems, moderated the panel.

It was an interesting & lively session – we had four broad themes, around which each of the panelists shared their views.

Perfect Vs Quick and Dirty Product

The first theme was on the conundrum of getting a perfect product out Vs a quick and dirty product. One view was that if you’re an engineer, you want a perfect product but from a marketing perspective, you want to show something to your customers as soon as possible. As users are much more ready to give you feedback nowadays, you need to get your product to the market as soon as possible.

The importance of iterating early and iterating often was also stressed upon. Another good point brought up was the use of analytics – measuring how your customers are using your product, which part of your product they are using the most etc.

On the question of who is your first best customer – one of the panelists mentioned that if you are a startup, and if you have a customer, you should embrace that customer – whether it’s a marquee customer or someone (who may not be big) but believes in your product. The point was that when you do approach professional investors, they certainly want to know who believes in the product apart from you & it adds a lot of value to have a MoU with a company willing to use your product.

Another panelist was of the view that a customer who requests your product to be custom-built is your first best customer, as your product is paid for. While this product may not meet all the market needs, it could possibly meet 70% of the needs and can get you started.

Time, Budget and Scope

The question of where does one start when developing the product idea evoked different responses from each of the panelists. Prakash’s view was that it was a good thing to have some protection (read: patent) around your core idea and to use existing frameworks and tools to reduce the time-to-market. Making crucial decisions in terms of the trade-off between features and time/budget are also extremely important.

Read the full summary here or register to view the Recorded Version of the Panel Discussion

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I recently ran in to the blogs of Steve Blank and Eric Ries whose posts on product development & marketing, lean start-ups and customer development make very interesting reads. But what particularly attracted my attention was the frighteningly common-sensical similarities between (a) the problems in traditional software product development and (b) the problems in developing a market for the software.

In software development, we have seen how the waterfall model is gradually drying up; how agile/xp/scrum has already made huge inroads; and now we are also witnessing how kanban is heralding the ‘lean’ software development. I infer that similar shifts are happening in market/customer development for software products.

A start-up that builds the software and waits for the customers to find the product will possibly remain an up-start. More often that not, start-ups fail from lack of customers, not from lack of product development methodologies. But the reality is that most companies spend more energy on building products instead of setting up a structured (and repeatable) process for customer development. It is in this context that Steve and Eric recommend a 4-step customer discovery, validation, creation and expansion process. More details are available in their blogs and so I am not going to elaborate more here. Suffice to say that within the context of this customer development model, software development needs to be executed. At least, both should happen in parallel.

PS: Doesn’t this sound like THE thing to do? Why should smart entrepreneurs need such reminders about such basics? My hunch is that entrepreneurs (romantically and rightfully) see an Apple in their companies. Ain’t a software that is good enough for them, good enough for the market???

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In the 1990s, two powerful trends emerged that changed the way software is built today: Open source software (OSS) and IT outsourcing (ITO). As Linux served as the torchbearer for OSS, and the Y2K threat resulted in mainstream adoption of ITO, both models have grown significantly in the past decade.

Although these trends have evolved independently, there are several ways in which open source and outsourcing are working together to present new prospects for the industry. Here’s how software businesses can derive maximum value from these investments while minimizing their risks.

The Similarities between Open Source and Offshoring

A recent report by The Standish Group states that adoption of open source software models has resulted in savings of about $60 billion to consumers every year. McKinsey predicts that the global software outsourcing business is expected to hit $1.6 trillion by 2010.

As the world moves towards SaaS and Cloud Computing, both OSS and ITO are facing several opportunities and threats. Some industry observers have predicted that the commercial vendors will be the saviors of OSS. Other pundits expect a downfall in outsourcing as we know now, in the face of rapid adoption of cloud models.

While these two phenomena have evolved somewhat independently, there are also many shared similarities. Consider the following characteristics:

Freedom

OSS is free in the way it gives philosophical and technical “freedom” for developers to use, study, modify and re-distribute it. The use of such software has helped reduce vendor “lock-in” in an industry dominated by many powerful mega vendors.

Read the entire article which was also recently published as an Op-ed on Sandhill.com

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Aspire Systems is hosting a Panel discussion on “Bootstrapping a Technology start-up”.

Entrepreneurs who bootstrap typically go through trying times. Yet, bootstrapping your software business – being frugal and resource-constrained – has its own advantages. It can help you focus and prioritize, and get your product validated by customers before you consider other funding options.

However, bootstrapping comes with its own set of challenges that need to be understood and addressed early in the business cycle. Come join a Panel of experts, including Vijay Anand (Serial entrepreneur, Founder of Proto.in and Incubation manager at RTBI), Ted Finch (Hi-tech marketing expert & Owner of Chanimal.com) and Prakash Narayanan (Co-founder and CTO of MiCello, a startup in the mobile content delivery space) for a discussion on what is takes to bootstrap. Some of the themes to be discussed include:

• The importance of getting a working product out quickly
• Are customer insights a part of the product development process?
• Identifying when you need to bring in professional investors
• Engaging with external consultants for business planning, market development and sales from an early stage

Bhoovarahan Thirumalai, co-founder and Board member of Aspire Systems, will be moderating the discussion.

Since it is a telephonic panel discussion, all you need to do is call in. To ask questions, you can login to the live online meeting, your questions will be taken up for discussion (time-permitting) during the event.

Date: September 30th, 2009; Time: 11 AM ET/8 AM PT/8.30 PM IST

Entrepreneurs bootstrapping or planning to bootstrap your software venture, do join us for a thought-provoking session!

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I attended Sramana Mitra’s Startup Positioning Roundtable last week. Sramana has been an entrepreneur and strategy consultant in Silicon Valley since 1994, and is currently authoring “Entrepreneur Journeys“, a series of books focused on demystifying entrepreneurship.

The Roundtable was a very well organized and involved session. Quite a few startups pitched their ideas in this session and Sramana shared her views on their ideas/pitches.

Sramana was basically looking at three different aspects for a product idea:

1) Is the idea any different compared to what is available in the market? What is the value proposition?

2) Is the product and business sustainable?

3) Who are the target customers?

Many of the startups asked one common question: Is the product/idea fundable?

Sramana referred to various chapters of her series of books, “Entrepreneur Journeys”, when responding to this question and giving several pointers to budding entrepreneurs. Here are some of the things that Sramana stressed on:

• Focus on monetization – how are you going to make money using your product? Consumer oriented products need to think about this a lot more. It is not easy to get consumers to pay for a service as they are spoilt with several free offers on the web. Conversion rate from Free to Premium users is generally low and one should be conscious of this conversion rate. If it is advertisement-supported business model, what is the viability in the long run?
• A B2B / SaaS model (with enterprise customers) could be a better business model as there will be paying customers.
• Work on your go-to-market strategy
• Understand the ecosystem on which you can build your business
• When you go for partnerships, having a win-win relationship is very important.
• Personalization is the biggest unleveraged opportunity today
• Identify the risks of the business early on
• It is very important to do Total Available Market Analysis. Don’t go by gut feeling. Get real numbers. Do your homework.
• Even the name of the company is important: try to choose the right name. Make sure that it is easy to pronounce and write.

I would recommend entrepreneurs-in-the-making or those who have just started your technology ventures to visit http://www.sramanamitra.com and also register yourselves for one of her upcoming positioning roundtable. The experience will be worth it.

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