A case for productized services – why a pure services play is not always awesome

Mark Suster (@msuster) has written a very insightful post (What Should You Do with Your Crappy Little Services Business?) on his blog. If you haven’t read it already, you should. He sums up with the following advice.

I’m not advocating that companies are crazy to try and be product companies. In fact, that’s all that I fund as a VC. But I don’t want the narrow world of venture-backed companies and the trade rags that report on them to dissuade the overwhelming masses of potential entrepreneurs from building meaningful businesses that are both fun and economically rewarding.

Basab Pradhan (@basabp), further extends Mark’s post here, where he suggests that services companies never need to find a product strategy “given their lack of skills and management experience of the products business“. Rightly so considering he is mainly referring to the offshore services business.

There is, however, an interesting case for product companies (particularly early stage technology companies) to have a services focus to solve the cash problem. I call it productized services, and this is exactly what we do at Samuday. This is particularly relevant if you are not VC-funded and need to build high quality products with sustained revenue stream. If you are an India based technology company, this might be even more relevant.

Early stage technology companies that are aiming to build high quality products have a tough life in India. Indian VCs mostly invest in e-commerce driven (technology) companies, so funding is scarce for pure technology players. Indian customers have a slightly misplaced definition of technology, thanks to the plenty of offshore/outsourced/software services companies. Several potential customers do not appreciate the difference in technology capability for building a website as against building a real-time communication and collaboration solution. Anything delivered through a website falls in the same league. This leads to a perception problem where your product may not be valued at what it deserves, posing a challenge in building sustainable revenue streams.

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The value of professionalism

[ This post is in context to part-time freelancers ]

We are gearing up to launch our flagship collaboration product – www.unirow.com . While the design and development of the product happened in-house, we thought it would be a good idea to get the marketing material developed by a professional. Our first requirement was to get some product videos made that would demonstrate the capabilities and simplicity of our product. We engaged with a freelancer, whom I knew from before. He runs a neat production house, but mostly in freelancing mode as their primary job commitments are different.

We had agreed on a set of requirements before beginning on this project. I spent a few hours going over what we wanted in the script, to the extent of giving the sequencing for shots. He was pretty excited and said he would be able to deliver the three videos within our budget. We bought all the iStock materials he wanted and ensured nothing stops him from moving forward. What followed from that point was a chain of disasters, ending up with him freaking out and not beeing able to meet expectations. Continue reading

Travelling in India

I am on a 2 day trip to Jhansi for personal reasons. I was supposed to go to Delhi by train and then fly back to Mumbai. The train (No. 2651, TN Sampark Kranti Express) was supposed to leave Jhansi at 12:10 and reach Delhi at 5:30. I had my flight reservations at 9:25 – a safe 4 hours overhead to catch up with train delays and Delhi evening traffic. Destiny (courtesy our good old Indian Railways) had however planned otherwise. My train is delayed by 4 hours and there is no other train for a long time! My travel plans went for a complete toss. I finally managed to reach the airlines call center and the lady at the other end was kind enough to book me into tomorrow morning’s flight.

Travelling in India is an interesting mix of Air, Rail and Road journeys and it takes quite an effort to keep all of them in tandem. It will be great if the mushrooming travel industry in this country starts innovating. We need solutions beyond “cheap air-tickets” and “low priced luxury holidays”.

Oh yes, I found a cyber cafe at the Railway station and thought of doing some live reporting on this apathy from the scorching heat of Jhansi.

Evolution of the complex Indian political system

The world’s largest democracy is busy electing it’s representatives to the parliament as Elections 2009 in India is on its way. The Indian political system has evolved from few to many parties with each of them having some controlling stake in the democratic system. In last 20 years (8 general elections) the country has seen state-level political parties grow from 27 to 265 – a 10 fold growth. The number of national parties have however stayed around 7 throughout this period.

Contesting political parties - trend in last 20 years

Contesting political parties - trend in last 20 years

Interestingly, the number of parties that had at least 10% of the votes polled in seats they contested has grown from 25 to 44 – a 76% growth in 20 years. The number of parties which one at least one seat has grown from 17 to 37 – a growth of 117.6%. Therefore, while the number of contesting state parties has grown abnormally, the actual competition (reflected by a minimum of 10% vote-share) may not have grown in same proportions. The growth however is high enough to change the power equations of government formation.

Vote share and wins in Indian General Elections

Vote share and wins in Indian General Elections

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