Workleaf

After some changes internally within Alef Solutions, we will be taking a break this month. 2007 has been a good year for this fledgling idea. We had some crazy ideas, traveled various paths – won some and lost some.

It is that time of the year, when you step back and take a look at your life from a different perspective (at least, thats what the Hallmark cards say!). Well, then why should it be any different for Alef Solutions? We will be taking a break to step back and take a look at how things are going. We’ve had some loses and we need to figure out how to manage those.

Alef Solutions will be back for sure. But in what form and nature, we do not know that yet.  I wanted to take this opportunity to thank our “vast” reading community for their support via the comments board. In the meantime, do check out the blogs in our blogroll. They continue to roll fast and they still provide interesting insights into outsourcing.

Hasta la vista

ODesk.com, an outsourcing marketplace provider (www.odesk.com), announced yesterday that till date, contracts/projects cummulatively worth $10 million have been executed via the ODesk infrastructure. ODesk was recently featured in the RedHerring 100 Finalists list and positions itself as an on -demand global workforce provider.

I have personally believed in the value provided by upstarts like ODesk. Alhthough marketplaces like E-Lance and Rent-a-Coder have existed for a longer duration, companies like ODesk go beyond the aspect of a market place and try to provide tools that enable its clients to function effectively in that marketplace. Although I am skeptical about its scalability in terms of, what project sizes can it handle, I am sure it will satisfy small and individual projects (Psst… I heard somewhere that the Technorati website was built by outsourcing it to someone via ODesk – I am not completely sure when & where I heard this information though!)

BusinessWeek published an article in its latest edition titled “Outsourcing Heads To Outskirts”  providing a great example of how exactly outsourcing is resulting in the social/economical uplifting of rural India. It may not be the great turn-around story of the century but it is definitely  a start. If we start seeing more companies like GramIT using outsourcing as not just a mode of capitalizing on the current trends in outsourcing, but also to serve a social cause, then we may start seeing a whole new paradigm of outsourcing. Probably social entrepreneurship will see a renewed spurt when such success stories are given more exposure in the media.

Update (Jan 05 2007) – Apparently, the link mentioned in my post is incorrect. Please find the blog here – http://blog.guykawasaki.com/2006/04/the_120_day_won.html

Thanks to Dian, the editor of Sourcingmag.com, for pointing that out. If you are interested in outsourcing inn general, I highly recommend www.sourcingmag.com. It also has an active discussion forum, where some very good people answer questions posted on various subjects related to Outsourcing.

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The last few days of 2006. I was taking a break from reading all the (already) cliched predictions for 2007 & beyond in the blogosphere when I ran into a blog authored by the one and only Guy Kawasaki of Garage Ventures (I did not know that he had a blog!). And what do you know… he has a list of his most read posts!

So, here I was, pondering about the launch messaging campaign that has been planned for sometime in January and how to market the message over blogosphere, and I see this blog. This is a great piece for people starting to blog, especially for start-ups that are focussing on blog-based launch marketing. You can find the entry HERE, a great post on how to market your blog.

P.S. – Yes. We have finally figured out what ‘exactly’ we will start doing! You can expect to hear about it in January, ss soon as we settle some of our logistics & administrative issues.

Apparently, according to a recent survey report, 47% of current venture backed start-ups have immigrant founders. I knew that immigrants had a significant impact on the American economy. But this is probably the first time I am seeing numbers on this. Wonder what makes people perform better outside of their home countries?

The survey apparently found that 25% of venture-backed, public companies that were established in the last fifteen years were started by one or more immigrant founders. Within the high technology sector, that percentage rises to 40%. The aggregate market capitalization of these companies, which includes Intel, Google, Yahoo!, Sun Microsystems and eBay, exceeds $500 billion. The study also found that immigrant founders are responsible for building a high percentage of the most innovative American companies, with 87 percent operating in sectors such as high-tech manufacturing, information technology and life sciences. These companies are headquartered across the country but are concentrated in five states: California, Massachusetts, New Jersey, Washington and Texas.

Fifty-six percent of the emerging companies founded by immigrants were headquartered in California, followed by Massachusetts and New York. Sixty-two percent of the companies were in the high technology or life sciences sectors. India was the most prevalent country of origin with 28 percent followed by the United Kingdom (11 percent), China (5 percent), Iran (4 percent), and France (4 percent).

Interesting… isn’t it? Download the full report here

Start-up costs are tumbling down these days (Yes… it has almost become a cliche these days!). Some of the reasons are – Open Source, Offshoring, Online Marketing, Cheap Hardware.

All that is fine, but how does a person actually get to these resources and see what is the most cost-effective way of ploughing ahead with her/his ideas? My recent discovery as an answer to this question is the “now famous” tech blog – http://www.techcrunch.com/

Apparently, there are so many start-ups out there providing services that could, in turn, help other start-ups cut down their initial expenditure significantly. Recently reported start-ups were – Amberjack and Weebly. Amberjack helps you build a “site tour” for first time visitors pretty easily. Weebly helps you in creating Web 2.0 ready sites.  I will personally give these sites a try and see if it helps in my attempt moving forward with Alef’s product development. Till then, I strongly recommend subscribing to TechCrunch’s feeds. You never know what start-ups are out there that are providing exactly what you need to get moving!

I was talking to Jason yesterday. We were discussing different ways to move forward with the Alef Platform. During the conversation, Jason talked about the primary challanges in any sales process, irrespective of what you are trying to sell. I found it good enough to become blog fodder, so here it is -

1. No Need – The customer does not have or does not feel the need for the product/service. Here, the sales person should focus on making the prospective customer realize the need for the product or service
2. No Money – The customer’s current budget is already committed to other initiatives and hence, there is no money to spend on this product/service. Here, the sales person to devise ways to make the payment part easily fit into the customer’s budget and spending plans.

3. No Urgency – The customer realizes the need but the need is not urgent. The sale gets postponed indefinitely. Here, the sales person should focus on “quick wins” that the product/service will generate for the customer, hence making him/her realize the urgency of the need.

4. No Time – The customer does not have the time to evaluate the product/service to assess if he/she needs it or not. In other words, the prospect does have time to listen to the sales pitch. Here is where a sales person should focus on relationship building and get a time from the customer to make the sales pitch.

Have you faced some (or all) of these challenges during your sales process? Are there more? Do let me know.

Thanks to my brother Arjun, a new logo for Alef Solutions was born yesterday. How does it look?

I have been reading a whole bunch of technology marketing related stuff recently. A common thread has been the challenges in marketing technology solutions to the SMB market. Its a common contention that this segment is highly fragmented, and hence, unattractive for organizations with a sales model tuned to service large scale enterprises. Assuming that each sales personnel is expected to generate uto 7 times of his/her cost to the company, as topline for the firm, it is obvious to see why this sales force cannot be employed to service the SMB segment.

According to some of the reports, 50% of IT spending in US (in 2005) happened in this segment. But it has its caveats – Reluctant buyers, predominantly non-IT decision makers and wanting more for less. Moreover, affinity for non-customized solutions and an attitude that stresses more on post-sales service establishes a scenario where the cost side of the equation remains the same, but the revenue side decreases significantly.

In such scenarios, shouldn’t start-ups take advantage of this situation by building a low-cost sales model upfront? Doesn’t it make sense to build a sales & distribution model that works on a customer “pull” basis, rather than pushing the offerings?

The primary challenges that I see here are -

1. Predictability – If I were to build a sales model that attempts to pull the customer to the product/service, rather than pushing the product/service to the customer, how can I predict or forecast the number of customers that will get pulled and eventually buy the product? Hence, traditional frameworks of sales and revenue forecasts become invalid.

2. Accountability – If I put a sales person in-charge of bringing in 5 new customers each month and if that does not happen, then I can hold the sales person accountable. In the pull model, who is accountable if the customer does not get pulled in sufficient number (heck… if he doesn’t get pulled at all!!)?

It would be interesting to hear your comments on this one. To pull SMB customers towards your technology offerings, what is be most predictable and effective way? Or is the whole hypothesis lop-sided? Are there other ways to get to the SMB market?

Ok… so this is becoming a personal bookmark of all those blogs that I think will be useful for me later. Of course, all these entries carry a common thread – Startup, open source, entrepreneurship, business process management.

Here is another classic from Matt.

The interesting part of what he said was -

How do you prevent leakage and make open source more “sales-efficient” in the short-term? I’ve discovered a few means, and would love to hear yours, as well:

1. “Proprietary” Incentive. You must have a hook that convinces would-be customers to buy, and not merely use. Free downloads invite use, but only some proprietary (pardon the word) hook effectively closes sales. For MySQL (which, I believe, derives a massive percentage of its revenues from OEM/embedded sales), this means that it offers a clean way out of the GPL. For SugarCRM, it’s the additional functionality that is commercially licensed. For Red Hat (and Alfresco now, too), it’s the testing, packaging, third-party application certification, etc. that only comes with the Enterprise product.If you lack a hook, you may well get many users, but it will be extraordinarily difficult to beg and cajole users into becoming buyers. You don’t want that fight. You want an appreciable difference between your “community” product and your “professional” product, whether that difference is in functionality, stability, or whatever.
2. Source of Code. You must have control over the code. I don’t mean copyright here, but rather developers. Source of code rather than source code. Customers buy from those that write the software.
3. Partner Alignment. You must have your partners aligned with your vision. Systems integrators and others who make their money on professional services – in the proprietary and open worlds – always have an incentive to drive the cost of software to zero to make their services more appealing/less expensive. This is normal and natural. It’s not, however, good for the creators of the software. Software startups don’t need a huge swath of partners – they need a few hyper-committed partners with expertise and the shared vision of driving software sales (as well as their professional services engagements). The two need not be mutually exclusive. Despite #2 above, having partners support your free product erodes your ability to charge for it.
4. References. Customers talk to each other. They want to know who is paying for what. Convince one financial institution to pay and odds are that others will follow. This is not new advice – it’s very much what Geoffrey Moore has been teaching for years. But it’s critical in a different way in open source: you don’t just want marquee buyers using your product – you want them buying your product. There’s a huge difference between the two.

Hmm…. food for thought.