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Recent Posts

  • When the Going Gets Tough … The Tough Get Selling
  • Opportunities in Mobile Advertising
  • Good Report on Outlook for Indian Equity and IPO Markets
  • To VC or Not To VC
  • Media in India: Is it Prime Time?
  • SaaS
  • Travelguru Investment
  • CONSUMER INTERNET
  • Interesting Article on Indian VC Market
  • Shaadi Meets Match.com (Part II)

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Mark Sherman

  • Mark Sherman

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When the Going Gets Tough … The Tough Get Selling

Given the environment, my colleagues and I wanted to move beyond the “things are tough all over” sentiment to talk about specific tactics of selling in a recession.  In March, we hosted a dinner for SaaS company Sales VPs to share secrets and know-how of selling in a challenging time.  Dave Yarnold, the former VP Sales of SuccessFactors, led the discussion.  His content was very informative, take a spin through his slides: Selling in a Downturn for Battery Dinner.

One of the guests took rough notes, which I’ve edited and paraphrased….

  1. Sell Value and ROI, Period.  This is really the only way to be successful, and is particularly true in a down economy.  The key is to develop a number of ROI models segmented by customer and product usage type. No model, no sale.
  2. Beware The Capacity Model Death Spiral.  Sales capacity models can be deceiving: they are driven based on the buildup of individual performance relative to an average quota.  The key question is:  will these individuals deliver to their average quota or better?  The challenge is that difficult economic times often highlight an individual’s inability to deliver on their average quota.  The problem is that revenue projections can be built on individual capacity, and broader company expenses are also geared to this performance.  So an individual’s under-performance can have a ripple effect that cascades through the sales organization and then the rest of the company: “misses” case sales firing, which in turn causes reductions in force in development, services, G&A, etc.  In a down market, it’s important to remove below average performers early, and as always, you need to train, motivate, incentivize, and fuel your average and top performers like never before. 
  3. Remember:  Pipelines are Perishable.  Don’t wait or allow deals to languish in pipelines as they are ALWAYS perishable.  In these times, with more turnover and harder selling environments, deals will “spoil” even faster.  Times like these require a concerted nurturing process to get closed (see point below).  At the same time, deals are often stalled in this environment and need a recycling effort to revisit when spending freezes or re-orgs are behind buyers and they can think about new projects. 
  4. Plan For Tougher Approval Times and Processes.  To get a decision, expect 2.5x more approvers and 2 levels of seniority higher than you saw in more stable times.  And, expect more decision makers to crop up along the way than those you were introduced to at the beginning.  The key is to plan for these obstacles from both a pipeline timing and sales process perspective.
  5. Get Close, Build Trust.  Executive connections and trusted champions are REQUIRED to close business today.  Buyers are scared and won’t take risks.  If you can help them feel that the water’s warm with senior executive sponsorship, buyers might take the plunge.
  6. Buyers Are Not Lying.  “Surprises” are coming up later in the cycle and more frequently. Prospects aren’t lying when they say they didn’t know something was coming or don’t know what’s going on.  Even VPs don’t know what the CEO is going to do the next day because the CEO doesn’t know what the Board will do the next day. Multiple checkpoints in the process are good to make sure that the close process / decision makers are not changing.  
  7. Sales Training Should Be a Rule, Not an Exception.  Good sales organizations don’t hold sales training as a one-time event, they do it continuously.  Best-in-class companies create a slot for other parts of the organization to present – new product updates, customer success stories, competitive analytics, services engagement changes, etc.  This teach-in format can be tacked onto the weekly sales pipeline review.  One company has the salesforce grade each one of these interactions to ensure a closed loop feedback process.
  8. Say No To End of Quarter / End of Period Dates.  These are really arbitrary dates made up by the Sales Person.  Most leading SaaS companies are moving from quarterly to monthly quotas to manage the end of quarter problem.  Many SaaS companies still have 50% of their quarter come in during the last few days of the quarter.  However, it’s up to the sales team to actually control that emotional requirement.
  9. Valuable Emails Get Through.  Emails that get through to prospects in tough times are the exact opposite of marketing speak.  Some interesting examples include: “give you $100 for 15 minutes of your time, if I’m not valuable” email, the “donate to your charity” email, and “one sentence who-can-make-decisions-if-it-isn’t-you” email.
  10. Build For the Long Term.  Times are difficult, but people, processes, and policies that are built in this environment will only help the company to excel during good times. 

We enjoyed having Dave share his insights with the group.  Please feel free to post any comments or questions.
Mark.

April 01, 2009 | Permalink | Comments (2)

Opportunities in Mobile Advertising

My colleague Gautam Patel was recently interviewed by Business Standard for an article on the emerging mobile advertising market.  Below are his answers in their entirety and here a link to the full article with his comments:  VCs eye mobile advertisement firms to park investments. 

What is the potential and the prospects that you see in mobile advertising companies to park investments?

The mobile opportunity in India is interesting for the following reasons: (i) mobile subscriber growth hit 10 million last month with a total subscriber base of 300 million.  (ii) penetration in the tier 2-4 towns is still at 25-30% which means there is enough opportunity to grow penetration in the Indian hinterland, (iii) +90% of revenues per subscriber are still from voice and SMS, hence there is good potential for data services in the future.

Currently there is a dearth of killer mobile applications available that can work on SMS and low-cost phones.  Due to this fact, mobile advertising fill rates are still very low.  In my view, this will change when sticky applications like mobile search will be introduced on the handset. Mobile advertising companies today operate as mobile versions of advertising agencies.  This trend will continue until the introduction of relevant mobile applications that drive huge traffic and stickiness – I don’t see evidence of this today.  Once the market has killer mobile applications, then mobile advertising networks will truly be able to provide an optimized ad service to their end-clients.  There is an opportunity for this for sure.

Please elaborate on the increasing mobile penetration in India (in volume terms) at present and projections for the next one or two years down the line, the expected prospects for permissive and contextual advertising?

Based on some of the data points above, the opportunity here looks very promising.  Even if Indian’s mobile penetration gets to 40-45% India-wide, we have the potential of hitting a total mobile subscription base of 500-600 million in the coming years. The telecom carriers have pursued the spam SMS channel in the last few years with not much success.  In my view this has created numbness in the user’s mind towards SMS spam.  I feel there is opportunity in permissive or contextual marketing via mobile (mainly) SMS.  If you compare direct marketing data in more developed markets versus India, the data shows that the Indian market is hugely under-served in direct marketing.  However, as mentioned before, permission or context-based direct marketing will effectively monetize this opportunity. 

How big is the market for such services (in dollar terms now and projections) and the strategies that mobile advertising firms are adopting to leverage mobile marketing as a tool to promote their products and services?

Direct marketing in the US versus total marketing spend is 50/50 versus in India where direct marketing is only 10% of total marketing spend.  This is how big the opportunity is in India.  The Indian ad budget is $4 billion, of which print and TV take the lion share of 70%.  Internet and mobile ad spends are two of the fastest growing categories in the next few years.

Did your company invest in any mobile advertising firms so far? If so, please give the number and name a few? 

No, but we are actively looking at direct marketing business that are using the mobile channel.


Are VCs shying away from IT and other tech companies due to the slowdown? Is this the primary reason why VCs are lining up to invest in other sectors like mobile advertising or are there any specific reasons other than mentioned in the questions above?

I believe that the best IP (intellectual property) or technology applications are created when entrepreneurs are closest to the end-market.  Historically, the US and Israel have seen significant growth in IP/Technology creation because of the US end-user market for technology and the Israeli military requirement for technology.  Similarly, I feel in the next 10 years due to the mobile growth in India, there is significant opportunity for entrepreneurs to develop IP/Technology or mobile applications in India for the Indian mobile market.  Also, because the Indian mobile subscriber market has potential to grow to 500 million or the largest in the world along with China the applications and technologies in mobile that succeed in India and China will be world class and will be used in the rest of the world.  Just like the most superior Internet applications were created in the US and then exported to other markets.

December 03, 2008 | Permalink | Comments (0)

Good Report on Outlook for Indian Equity and IPO Markets

I came across this market update in my recent travels.  It has some interesting data so I wanted to share it. 

Download market_update.pdf

September 15, 2008 | Permalink | Comments (0)

To VC or Not To VC

My colleague Ramneek Gupta recently penned an article for Webyantra.net, India’s equivalent of Techcrunch, taking a candid look at the question of whether or not an entrepreneur should raise VC money.  I’m re-posting it here because he highlights some key factors that I think all entrepreneurs should consider.

Every entrepreneur will face this pivotal question and needs to carefully evaluate raising PE/VC money as he/she thinks about scaling their ventures. The barriers to entry and capital requirement to start a new business have come down dramatically due to a number of innovations in hardware (eg: storage and processing power available as utilities in a pay as you go model) and software (eg: SAAS). As a result it does not take a whole lot for entrepreneurs to code a new idea and let it loose on the netizens to see what sticks. This has led to a tremendous spurt in formation and growth of new ventures that fall all along the feature/product/company continuum. Each of these opportunities can represent a good business provided the capital usage and the capitalization table (% ownership of the various stakeholders) has been carefully matched with the scope of the venture. Let us discuss this point in greater detail:

Feature/Product Ventures….
Feature/Product type ventures are generally limited in their ability to be standalone companies for various reasons: their monetization models may not be suited to support costs like G&A overhead, direct sales, marketing; they might be add-ons on an existing platform, etc.….especially in the Web 2.0 area, these types of ventures are well suited to being acquired by a larger company that already has the ability to monetize the feature across its existing traffic, can acquire and retain new users/traffic as a result of the product and can continue future development efforts. This does not mean that these “built to flip” businesses, as they are sometimes referred to, are less exciting intellectually or any less enriching financially for the entrepreneurs. As long as these types of businesses are built with little or no venture capital they can still translate into significant paydays for the entrepreneurs.

Continue reading "To VC or Not To VC" »

February 14, 2008 | Permalink | Comments (0)

Media in India: Is it Prime Time?

The Indian media industry is on a fast growth track buoyed by recent shifts in the demographics, income patterns and lifestyle coupled with a surging economy. Growing urbanization and consumerism is expected to bolster advertising spend in the country (which is one of the lowest in the world at 0.48% of the GDP as opposed to a global average of 0.98%). These trends are creating a dynamic environment for investment.

Continue reading "Media in India: Is it Prime Time?" »

November 28, 2007 | Permalink | Comments (0)

SaaS

I am very interested in making investments in the SaaS market.  As such, I am attaching an internal presentation that sets up an investment thesis for the SaaS market. It includes a number of charts that I think will be useful to entrepreneurs who are in or are considering joining companies in the SaaS market.  Let me know if you have any questions or comments.  In particular, we are always looking for interesting companies with a great or many great entrepreneurs. 

Download saas_for_abcdvc.pdf

May 14, 2007 | Permalink | Comments (7)

Travelguru Investment

Travelguru_3If you’ve followed a little bit about the markets my colleagues and I think are compelling in India, it’ll come as no surprise that we recently invested in Travelguru.

Here’s the news http://www.battery.com/news/061129.html.

I’d love to hear your thoughts about the company, the space, and what else you might be seeing in consumer internet trends in India.

January 30, 2007 | Permalink | Comments (6)

CONSUMER INTERNET

We believe that there is significant opportunity for consumer internet companies (particularly those with a heavy mobile angle).  Attached please find an analysis of the market capitalizations of the significant US consumer internet companies.  We have begun to plot the Indian (and other geographies).  It is clear that some categories have already be realized in India (eg Travel). 

However, there are numerous other categories with gaps that seem to be ripe for opportunity.  For example, we are looking for a mapping play in India (Google Maps for India).  Additionally, we are looking for both content players as well as their associated ad networks.  While we recognize these spaces are very young, we believe like in the US omni-channel plays will become important over time. 

To be clear, this analysis is not meant to say that "knocking off" US consumer internet companies in India is a recipe for success.  It is more to look at a starting point of categories and then think about the indian end market and competitive / cooperative ecosystem. 

I belive that some of the best Indian consumer internet companies will come from categories that are not identified by this analysis.  However, every journey begins with a step.  Looking forward to your feedback.  Additionally, i am sure we are missing some companies so pelase do not hesitate to ping me with suggestions.... [email protected]

Download india_consumer_internet.xls

September 29, 2006 | Permalink | Comments (8)

Interesting Article on Indian VC Market

Spoke at the US-IVCA panel on the state of the Indian VC Market earlier this week.  Met an interesting person, Alok Aggarwal CEO of eValueServe.  eValueServe has just published an article on "Is the Venture Capital market in India getting overheated?" Wanted to share it with you.

Download evs_article_indian_vc_market_august_25_2006.pdf

August 31, 2006 | Permalink | Comments (2)

Shaadi Meets Match.com (Part II)

Jumping off from my previous post — which was a high level look at different approaches to investing in India — let’s get a little closer to the developing ecosystem.

Who’s doing what, who’s raising money and how much is out there? Here’s some of what we’ve found in our travels.

First, an important caveat: much of this data was pulled together in May 2006, so some of it may be already out of date. Since a significant portion of this information was from non-public sources, I apologize for any inaccuracies. If you do see something that needs to be corrected, please let me know via a post or email to [email protected].

India Venture Funds raised or highly like to close:

  • By our count, 9 funds x $50 to $400mm per fund in the next 6 months, or ~$1.6 billion.

Continue reading "Shaadi Meets Match.com (Part II)" »

July 01, 2006 | Permalink | Comments (7)

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