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Tech Startups with a product

, May 24, 2017, 0 Comments

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One of the biggest criticisms against the Indian IT industry is that it failed to generate enough products. This has nothing to do with the ability, but rather an economic decision. Simply put, the gestation period for a product is too long to be comfortable, while for a service business, it is almost immediate.

In fact, most of these businesses are set up after finding their first customer.However, slowly but surely, product based companies have started emerging. A new niche areas have been identified and people with the necessary understanding of the market potential and the domain expertise started building products.

Most of these products are bundles of services, offering scalability and long-term sustainability. One of the best examples is e-Learning products, which instantly allowed a trainer to offer his programs across the globe without ever getting out of his home. ERP products were followed by products, helping customers with project management, quality management and other similar processes.

The new technology capabilities like cloud opened up huge opportunities for products which made the adoption of these concepts much easier. Essentially, these products reduced the need for skills and were built in a user-friendly manner so that it was very easy t adopt and use new technologies. Similar trends can be observed in data sciences, IoT and other such technology domains.

The sudden surge in smartphone usage gave a huge fillip to mobile apps. Thanks to the various tools and technologies which made it very easy to build and host an app, even school kids have started building apps. They have started leveraging social media for marketing these products for free. A lot of interesting things became possible.

Another set of products focused on industry-specific challenges and offered solutions for these specific problems. These products, with a well-defined problem solution set, were more focused and experienced better market traction based on the way these products were built and supported. The growing telecom sector also experienced a lot of add-on products being built to be offered as a bundle along with the handsets or call plans.

Slowly, it started dawning on the companies that after sales service is not an afterthought and is a very strategic decision which could make or break their companies. Many successful companies failed to realize this and disappeared from the market. Outsourced after sales service has emerged as a strong business model. This triggered the creation of a plethora of products to help manage the after sales service function.

The major challenge for the technology product companies has been marketing and customization. Customers invariably ask for a few customizations to suit their processes which almost always creates additional development, adding to the cost. Most of the companies started cutting corners on the after sales support which became the biggest pain for the customers. These customizations ended up in creating multiple versions of the products. It is also difficult to decide which of these customizations are to be added to the main product.

Consequently, members of the engineering team ended up playing multiple roles as required creating chaos. Finding the seven core teams required for product management is rare. Marketing, architecture, development, testing, rollout, configuration management and support are these distinct functions which need to be staffed and managed. But we find the same team wearing multiple hats, jumping from one role to another.

The approach of lean startups, using the Minimum Viable Product development methodology, reduces a lot of risks associated with the product –market fitment. In spite of such insights being available, many technology companies jump into product development based on their perception or getting the idea validated by a just a few customers. These target customers, usually picked up from friends and family, are not the representative sample and hence their inputs and feedback usually confirm the promoters’ understanding.

Product companies must adopt Design Thinking approach where they start looking at a solution from the customers’ perspective. Here the question we need to ask or the problem statement has to change.

The conventional question has been how we can help the target customers meet a certain need. The design thinking poses the question in the same context, but from customers’ point of view.

“How can these target customers meet a certain need or solve a certain problem?”

This completely changes the answer. The earlier answers are based on our understanding and our capabilities. This new answer originates from customer’s understanding and his capabilities. This perspective results in a paradigm shift and completely changes the product development. These are the fundamental changes required in technology product development to help companies build more customer friendly products in a customer centric way.