Archive for the Category Entrepreneurship

 
 

For startups: how to deal with large enterprise customers

When I started Visual Website Optimizer, my sole focus was on selling to small to medium businesses (SMB). However, since last two years, we started getting interest from a lot of enterprise prospects. Of course, if a Fortune 500 company contacts your fledgling startup showing interest to purchase your product, you will be very excited about this mini-validation of your product. However, dealing with large enterprises is a different beast altogether. They don’t work like your rest of your customers and selling them is very different ballgame. So, before opening the champagne bottle to celebrate, you should keep some key points in mind.

How big boys make a purchasing decision

Hell yeah, I'm enterprise!

The single most important point is that most enterprises take ages to make a purchasing decision. They will contact you today, you will happily reply asking if they want a demo/meeting and then they will become radio silent. After days or weeks, they will reply and probably schedule for a call to discuss your product. Sometimes this call is scheduled for the same week but sometimes those big boys can schedule a call 3-6 months ahead (yep, this has happened to us!). The key point to note is that enterprises can be slow in responding (even after showing initial interest) but that shouldn’t make you give up. Use a CRM, follow up regularly and you should be fine.

Assuming you finally get a time for the initial meeting and they are impressed, they will probably ask for a trial or pilot. But, again, no matter how much effort you put into putting together this pilot project proposal, they will remain radio silent for a while until they suddenly get back to you asking for another meeting with their IT team.

Enter the IT team: why and how?

Sorry, you are screwed

You must remember that in enterprises it is never an individual that makes a purchase decision (especially if the deal size is >$1000/month). There are committees, managers and bureaucracies that you need to overcome. Once a specific group (say marketing department, in our case) shows interest and agrees to proceed with the trial/pilot, the IT department gets involved to ascertain everything is okay with your technology and it won’t conflict with their environment. Usually this phase is the quickest but sometimes IT department can raise some special requirements that your generic product may not be able to satisfy. (For example, one such requirement for us was the restriction on number of cookies we can set.). These special requirements may sometimes become a deal-breaker because if the IT says no to a pilot, it doesn’t happen, no matter how motivated other departments are. If you sell sales automation and the sales department is super-excited about it, the deal can still fall through if the IT says no.

However, assuming your product is indeed good, in most cases you will sail through these barrage of questions from IT. This will lead you to a live trial/pilot implementation.

Step towards success: implementing a trial / pilot for the enterprise customer

Hope it flies

Whatever time you budget, the trial takes twice as much time. Big enterprise always have that unknown contingency lurking in the dark. Sometimes their systems aren’t ready, or they don’t have approvals, or the key people are on vacations. Since large enterprises treat trials and pilots as seriously as final implementations, you would need to make a significant investment of your time and effort to get it done. Just like in sales, where you should always be closing, during the trial too, you should always keep trying to get the customer start using it. By themselves, enterprises may get really, really slow at implementing or using pilots/trials.

Procurement: why do they exist?

Puhleez?

Once your trial is completed, and the target customer (which may be an individual or a specific department within the big enterprise) wants to go ahead with your product, there are two ways the final purchase that can happen. If the sale price is low, say less than $1000, an individual generally can make the purchase on his/her personal card and later claim it as an expense from the company. However, if the sale price is high, individuals or departments do not have budgets for it and they have to involve a special kind of department with a very boring name called Procurement Department.

I imagine people working in the procurement departments have a funny job because things they are asked to purchase is not the things they end up using themselves. So you would find that the final stage of selling to an enterprise involves procurement department asking you for a quote and scope of services. Most procurement departments also innocently ask for discount, as if it is a requirement to do the sale. Under no circumstances you should offer any kind of discount to the procurement department because they have absolutely no influence on the purchasing decision. They are just there to facilitate the purchase. So simply tell them that you are not offering any discount, and if they ask for reasons tell them that it is a company policy.

Lawyers and Terms & Conditions

Lawyers, the cute kind

If the procurement department okays your big ticket purchase, don’t get impatient and still don’t open the champagne bottle. When lawyers get involved, the whole initiative can get derailed because of that one specific word you have in your terms. For SaaS and software products, the terms and conditions are generally standard for all the customers. (For example, terms and privacy policy for Visual Website Optimizer is public). However, some large enterprises would have their own “vendor terms” which would be completely different from your standard terms. Now, should you sign a custom terms document with each of the big enterprise customers? Unless you are prepared, I wouldn’t recommend that as it can become a big hassle in the long term. Even if the sale price is high enough to justify detailed negotiations on the terms and conditions, you should always get your lawyer involved. Don’t try to negotiate the legalese yourself because remember you are startup, and the other company is an enterprise. They have a large army of lawyers, you have.. well, only yourself. (Also remember that if your startup raises funding or gets involved in an acquisition, all the documents get scrutinized at the due diligence stage. So don’t sign the “standard” vendor terms document supplied by the enterprise just because it looks harmless)

Closing Thoughts

Sales promises haunt eventually

Selling to enterprises can be fun and for a young company, it is definitely a big achievement. However, following miscellaneous points should still be noted:

  • SLAs (service level agreements): even if you do not guarantee anything to majority of your customers, enterprises would typically demand very specific SLAs for customer support and software uptime. Before promising, make sure you have resources and capabilities to honor that. Do not commit to an SLA just because the sale price is high.
  • Phone Support: enterprises also typically demand phone support. If you are a small startup and founders do support, make sure you are capable of providing phone support even when you are in a meeting, having lunch or partying outside. Phone support is a big commitment, so only make it if you are ready to handle regular calls (because enterprises do love to call for even the tiniest of issues).
  • Discounts: do not give discounts to enterprises. They value the solutions they use and cost is almost always a secondary factor for them. (This is also a big reason to have flexible pricing for enterprises so that a Fortune 500 company pays in thousands of dollars, not $15 that is your standard plan.)
  • Ask for their logo or case study: if you must provide a discount or an additional feature or service, ask them if you can use them as a case study or at least put their logo on your customers page or get a testimonial from them. Always do barter, never provide discounts for free.

Hope you liked this short primer I wrote (based on my experience of selling Visual Website Optimizer to large enterprise customers such as Microsoft, AMD, Economist, GE, etc.) In case you have any specific questions about enterprise selling, please leave a comment. I will be happy to help!

Good luck with your first thousand dollar sale (:

A CEO has to do only two tasks: hiring and setting vision

Chief Executive Officer (or CEO in short) is that fantastically sounding job role that feels like a dream role to many. I used to fancy being a CEO one day and now when I am one (of Wingify), frankly it feels exciting and overwhelming. In fact, it is a big responsibility. A responsibility to make sure company grows, payroll is met every month in years to come, customers are happy, a brand is built, culture is well built and tens of other tasks. A CEO (especially in a small company / startup) can quickly get overwhelmed with all the different kinds of work he has on his plate. After all, in a way, everything associated with the company is in someway his responsibility.

ceo

So, what must a CEO do?

In the last 2 years of being a CEO of a nascent and growing company, I have come to realize that if a CEO focuses only on two key tasks and does them really well, all the work he thought he had to do by himself will take care of itself in a very efficient manner. These two tasks are:

  • Hiring
  • Setting Vision

Allow me to elaborate.

CEO Task #1: Hiring to build a perfect team

A CEO cannot and should not do all the tasks by himself. I know CEOs (including me) generally obsess over details and perfection, and in desperation end up doing quite a many things by themselves. Initially when the company is small, this is of course necessary. But as the business grows, a smart CEO should bring in more capable people than himself for well-defined roles and then set them free. This ensures that the business slowly comes to comprise of a competent and independent team that executes on the company vision (see below). I’m trying to do that for Wingify by hiring people for sales, marketing, engineering, product management and customer service roles. (Shameless plug: if you are smart and are willing to work from New Delhi, come join us!)

So, a CEO’s role should be to obsess on hiring competent people continuously. In fact, a CEO should strive to make himself dispensable for almost all the tasks in a business. Instead of meddling into sales, technology, finance, marketing, branding, customer service, etc., why not hire specialized people for these roles? However, it is important to obsess on hiring the right kind of people because the team that eventually gets built also determines the culture of the company, and ultimately the brand the company projects to the world. Hire good people and set them free! Everybody loves freedom to perform and deliver.

CEO Task #2: Setting company vision

No team can work without knowledge of the final objective. Without a clear idea of what a team is expected to deliver, even the smartest of people will fumble and struggle to deliver results (because, of course, they have no clue what results are expected of them!) So, while assembling and expanding a world class team, a CEO’s second and final task should be to show them a clear, cohesive vision of what the company expects to be. I’m not arguing for micromanaging the team, rather I’m arguing for deciding a strategic vision for the company and then letting individual teams set milestones for themselves to achieve that vision.

Once a company vision is set, different teams interpret the vision according to their own functions. For example, if the vision of the company is make $X million in revenue in next two years, sales, marketing, HR, customer service and other departments will decide what activities they need to plan in order to make this goal a reality. They will also set their own milestones and benchmarks. A CEO would need to overlook cross-team talk and guide it, but even that can be delegated. Strategic vision of a company could be of release of new products, entering new global markets or becoming a leader in a particular domain. But whatever the vision is, it must be clearly and thoroughly communicated to the whole company so that all the smart folks that you have hired and the teams that are operating can set their individual goals and milestones.

Once you hire a good team and show them a vision to work towards, your role as a CEO reduces to making sure everything is on track and meddling only when something seems to be going way off-track (say if an unexpected event happens in the market: a new competitor emerges or a new game-changing technology is developed or global recessions starts).

The essential startup team: content, analytics, design, engineering

I was recently thinking about what would a minimal, initial team for a software startup comprise of. Imagine you have a brilliant idea for a startup and you have some funds to hire an initial team. But like most smart entrepreneurs, you want to hire a minimal team first and only expand later, if and as needed. So, what would be the essential, minimum team for your startup? Of course, technically, the answer is one. Minimum number of people you need for your startup is you (and possibly a cofounder). But, I am more interested in exploring what functional roles need to be performed in an early startup that is just getting off the ground. You could be doing all roles yourself, or you could be having different people for these different roles, but in my opinion, following roles define an essential startup team:

  • Content expert
  • Analytics and marketing expert
  • Designer
  • Engineer

Update/note/disclaimer: As pointed out in comments, at extremely early stages, product/market fit is what you should be aiming at and for that matter “product manager” (which is founder in most cases) is the person who will test and refine the startup until that fit is achieved. The team I describe is relevant once you know you have discovered the right market and have a pretty good sense of what product is going to look like.

Let me describe these roles in details and comment on why I think these are absolutely essential for an early stage startup.

Content expert

words

What s/he does? This person owns every aspect of your startup related to content. Activities include: writing amazing posts on your blog; writing guest posts on prominent industry publications and blogs; copywriting for website and landing pages; managing and engaging community on Twitter, Facebook and other social media channels; engaging your startup online (by commenting on relevant blog posts, forums, Quora, etc.); writing whitepapers, case studies, etc. (if yours is a B2B startup). This person also interacts with the analytics expert to A/B test and refine headlines/copywriting and supplies content for email newsletters. Essentially, this person understands and gets what compelling content looks like and also understands why good content is so important to the startup’s success.

Why is content expert important? Content does two amazing things for a startup: a) it is super important for SEO purpose; more content you have on site and off-site, more likely are you to be ranked highly on search engines; b) good content helps your startup gets noticed. Companies like SEOMoz, Unbounce, Mint, OKCupid, etc. have shown what wonders good content can bring. With our product Visual Website Optimizer, I am trying to do the same by writing weekly posts on I love Split Testing blog. From my personal experience, I can tell content helped people notice our product as a serious A/B testing contender. Good content attracts much needed attention towards your startup and consistently good content helps create a nascent community around your startup. What more could you ask for?

Analytics and marketing expert

analytics

What s/he does?: This person is responsible for everything related to analytics (and marketing) in your startup. The list of what work needs to be performed is huge: properly utilizing Google Analytics to optimize funnels and understand where traffic is coming from, taking care of SEO, A/B testing different pages to maximize conversions, designing and implementing user engagement strategies (through email/retargeting/etc.), designing strategies to maximize retention of users/customers, increasing engagement on pages, doing PPC and display campaigns which show ROI; designing effective customer feedback loops. This person needs to work with content expert and designer to make killer landing pages and website structure. And s/he should also work with engineer to design retention strategies (trigger emails or badges or to implement any other novel strategy analytics expert may think of). Bottom line is this: analytics expert is responsible to maximize your conversions, sales and retention in any way s/he can.

Why is analytics expert important? In early days of startup, there is a risk of settling down towards a “good enough” framework. You have a website and you get a few signups daily, some of your users are canceling and you seem to have a vague understanding of what your users are doing on your website/app. All this process/information can quickly become de facto in your startup. As a startup, your team may be busy adding features, getting press and responding to customer queries. With all these day to day activities, analytics and optimization can take a back seat. Imagine how beneficial would it be for your startup, if your traffic increases from 10 hits to 1000 hits a day, conversion increases for 2% to 8% and churn reduces from 10% to 2%. Isn’t all this worth having a person doing the analytics and optimization job?

Designer

painter

What s/he does? Obviously, this person is responsible for everything related to design. Tasks include: designing website, landing pages, application, email newsletters, banners, mobile app/website. Designer works with content expert to create visuals/images/infographics to be used in the content. S/he is also responsible for layout and visual appeal in whitepapers, case studies, etc. Designer works with analytics expert to create effective landing pages and call to action buttons. Designer works with engineer and analytics expert to skin the application and make it usable. A good designer intuitively understands the importance and impact of good design on how a startup is perceived.

Why is designer important? Needless to say, visitors and potential customers will judge quality of your product/service from design you have. In an era of design made popular by Apple and other companies, the bar for good design has really gone up. No longer can you hope to slap a basic HTML/CSS skeleton on your application and expect it to be received well. More than ever, design has become a significant competitive advantage and startups that realize this will be more successful than the rest.

Engineer

coder

What s/he does? This person is responsible for technology and engineering behind your startup. Responsibilities are numerous: choosing frameworks, programming, server administration, maintaining databases, testing, QA, scaling operations, etc. The person should be smart enough to not over or under invest in engineering. Engineering and codebase evolves as startup evolves, so the person has to have a long term vision and give your technology an appropriate structure.

Why is engineer important? Initial choices you make in your engineering will have a long term effect on your startup. The programming languages you choose will define what kind of talent you attract. The framework you choose will guide direction of your code base. Choice of server architecture will become semi-permanent. The concept where your choice of technology/engineering effects your future decisions and efforts is called Technical Debt. So having a right engineer with good perspective on things is very important for a startup.

Bonus: customer support expert!

customer

Technically, you don’t need a dedicated customer support person. In early days, it should be performed in rounds by everyone in the team. It helps the whole team be closer to the customer and understand (and hence fix) her problems and needs. However, if you really have to hire a fifth person in your team, I’d say hire a customer support expert. Keeping existing customers happy with swift and intelligent responses is sure shot way to differentiate from competition. Customers today are generally immensely unhappy with support of most (large) companies, so if you manage to surprise them with a good customer service, you may win much needed evangelists for your startup. In early days (and even now), this is precisely how we got people to love Visual Website Optimizer. We aim to provide absolutely the best customer support people may have seen.

Validate your startup idea by asking 3 simple questions

Last week, I stumbled across a personal post from a founder on his thoughts after first month of his startup. He writes in the post that he hasn’t been satisfied with the traction received so far and wonders whether existing product is the right path to continue on. I had exact same questions when I was starting up Wingify and now that we have seen some traction, I thought I should expand on a comment I made on how to know if your startup idea is the right one.

When doing a startup, it is perfectly okay to wonder whether you are on the right track. It is not a sign of weakness. In fact, being too attached to one’s idea is a sure shot path to failure. Honest introspection into your startup should be done regularly to have a clearer perspective. After all, startup is a lot of effort and hard work. What good it is if you don’t know whether that effort is in the right direction?

Like many entrepreneurs in their initial stages, if you are feeling doubtful about your startup, ask these 3 questions to yourself (and your co-founder):

  • Do you think what you are providing is creating significant value for anyone? Value should be so significant that people should curse you if you take that service away from them. Do you think it could happen?
  • Do you think there is big enough market for the service AND the market is easy to reach (without spending bootloads of money)?
  • Are you enjoying doing this? Do you see yourself doing this for several next years?

If answers to any of the questions is no, you better think hard about your startup before putting any more effort into it.

Providing value

closed

As I wrote earlier, a lot of ideas are cool but they seldom provide value to anyone (and hence seldom make money). “Value” is not some abstract concept I am throwing around. Your product/service is valuable if a lot of people will become sad if it didn’t exist or if you take it away from them. Your idea has no value if nobody cares whether it exists or not. For example, you decide to open a cafeteria chain with iPad menus in college campuses. It is a cool idea, for sure. It may even get you on TechCrunch. But, frankly, would your target market bother if such an idea didn’t exist or if you open up one cafeteria and decide to shut it down? The campus crowd has other alternatives for cafeteria and that is why they won’t cringe when you shut it down. They would not bother with your cafeteria. An iPad menu isn’t a strong enough value to anyone.

But, on the other hand, if you decide to open a cafeteria (with or without iPad menu) in a remote locality where there are no cafeterias at all (and if they haven’t tasted coffee before), you are definitely providing significant value to a well defined market. And people will definitely curse you if you decide to shut it down for no reason.

So, as a startup founder, you must ask whether your product/service is providing real value to anyone. Value can be measured in terms of convenience provided, money saved, entertainment, time saved or other parameters. But litmus test for your idea should be this: if you decide to shut down your product/service for no reason, will people notice? Will people become sad/mad, or will they simply move on without much of a fuss? If your answer is no, you better move on.

Realistically reaching a big target market

market

Just providing value is not enough for a startup. You may have the most valuable idea of all time (like introducing coffee to a remote locality), but if your target market is small, hard to reach or non-existent, then you should think twice about that idea of yours. To give a simple example, if your idea is to open a fast food joint that also serves chilled Cola in middle of Sahara desert, it is indeed quite valuable. You will be guaranteed a customer, every time someone happens to be crossing the desert. But the point is, how many customers would you be able to serve? How big could such business get?

Another example is of a market that is big but incredibly hard to reach. For example, an English teaching course for low-income, less-educated people in countries like India, China, Russia, etc is a brilliant idea and I am sure such a market exists and is potentially huge. But reaching out to such a market is a marketing nightmare. You must be prepared to spend lot of money on TV, radio, newspaper campaigns and establish local centres across hundreds of cities. As a bootstrapped (or even VC-funded) startup, are you prepared and capable of taking such a challenge? If answer is no, you need to move on.

Are you enjoying this?

meaning

Startup is a big commitment in life, and choice of your startup idea will determine how maximum portion of your immediate life will be spent. It is true that generally people work on startup ideas they generally like, but there are market-based approaches to find ideas that can be profitable (but not necessarily in line with what you like). You must realize that next few years will be spent on the same startup idea, so you must enjoy doing it. If your startup is about health, you must enjoy being in that field. If it is about marketing, you must like marketing. If it is about bingo cards, you must be passionate about bingo cards. I’m not saying you have to be crazily in love with your industry/domain, but you must at least enjoy being part of the industry. Otherwise, if you do a startup just for money, you will quickly bore and burnout yourself. So, even if your startup can make you a billionaire but you don’t like it (or can’t imagine making yourself like it ever), don’t do it.

Summary

Your startup idea is worthwhile if it is: a) extremely valuable to target customers (and not merely cool); b) has a big enough market that you can realistically reach out to; and c) something you can immerse in for many, many years to come.

Otherwise, simply pivot or redo the idea. It is never too soon or too late to change paths in life.

My Mixergy interview! Hear the story of Visual Website Optimizer

I was fortunate to have been interviewed by Andrew on his awesome website Mixergy.com. The interview was about how we bootstrapped Visual Website Optimizer to over 1000 paying customers. The video is long (75+ minutes) but I hope if you watch it, you enjoy it! (If you rather prefer reading transcript, it is also available on Mixergy).

Here’s the Wingify story!

My startup, Wingify, got covered in January 2012 edition of Inc. magazine. It tells about the journey from first version to final product (Visual Website Optimizer). Read the entire article below:

Wingify nominated for Red Herring Asia 100 and NASSCOM Emerge 50

I am happy to announce that we got nominated for not one, but two prestigious awards. The first one is Red Herring Asia 100, where they choose 100 companies from all over Asia who have potential to make it big. The other nomination is for NASSCOM Emerge 50 which choses 50 emerging companies from India in the IT field.

Red Herring is a widely recognized brand famous for spotting Microsoft during their infancy. On the other hand, NASSCOM is India’s top association of IT industry and is highly regarded for building India’s brand for IT services. I feel lucky to be nominated for these awards. The whole Wingify team (see below, yes we’re 8 people now) deserves to be recognized:

team

Please wish us luck for these awards. We have our fingers crossed!

How to market your startup or new product without spending a penny

Many startups face problem of breaking the clutter. Nobody per se cares about your startup. They have their own busy lives and your startup is probably just another website they visited today. Making people notice and care about your product is perhaps the toughest challenge a startup faces. The challenge becomes even more difficult if you are a bootstrapped startup or are unwilling to spend thousands of dollars on press, paid advertising or sponsorships. So, what are the best ways to market your startup without spending any money?

Build a following by producing irresistible content

There, I said it! That’s the secret of marketing Visual Website Optimizer. We don’t have a marketing budget but yet we recently crossed 10,000+ signups milestone. How did we do it?

My primary marketing technique has been producing great content and then simply trying to spread that content. I write extensively about A/B testing and post it at a lot of places and that is what drives a lot of signups for our product. Some of the blockbuster guest posts I did are driving visits and signups even to this day (even months after of originally writing those articles).

Halo effect: how your startup gets marketed along side your content

In the content I produce, I don’t explicitly write about Visual Website Optimizer. People would only come to know about the product if they read the author bio. But that’s the best part: if you write good content, people will be naturally curious to read who wrote it and when they read about that, they will remember your startup. The key is to produce absolutely irresistible content that people cannot help but say “Wow, this is fantastic. Wonder who wrote it“. This is a big challenge but it is imperative that you invest time and effort into coming up with great content.

Multi-pronged approach: occupy mindshare of your market through multiple channels

Your prospective customers usually hang out at similar places, they read similar blogs and they talk with each other online or offline. in fact, people that share common needs and talk with each other regarding that is the definition of a market.

When you initially produce a piece of content, some people notice your startup. If you produce some more content and push it via a different channel and some more people notice (and among them some of them are the ones who noticed you previously). If you do this enough number of times, eventually you start occupying a mindshare of your target customer base and people start remembering your startup as one of the key solutions in the market. And lo and behold, you have successfully occupied a slice of your market’s collective mindshare. That’s what marketing does and you did that without investing any money (or at least not a lot of money in direct terms).

As a bootstrapped founder, you have time but not money. If you use that time writing and spreading good content, that will be one of the best early stage investments you can make.

The key is to keep reminding your market that you are alive and kicking by constantly publishing great content from various different channels. These channels can be:

  • Twitter and Facebook: share relevant industry updates and re-tweet most interesting articles (relevant to your industry). Become an indespensible source of information.
  • Blog: use blog not to promote your product but to talk about industry and teach best-practices, publish customer case studies, etc. In short, use blog to teach your readers something that they didn’t know.
  • Guest Blogging: seek widely read sources in your industry and contribute good content. (Don’t talk about your product or your guest posts won’t get accepted)

How to produce good content?

Now, that is the hardest part as it depends a lot on creativity. However, to give you a few broad themes on what has worked for us, here’s a short list:

As a new startup, how do you promote your great content?

Producing great content is not the only thing you need to do; you need to promote that content too. Initially, when you have no readership, no followers or no fans — how do you get your content out to millions of eyeballs? For promoting Visual Website Optimizer, there are various methods I used, some of them are below:

  • Reach out to industry influencers and ask them what they think of your article (they will tweet it, if they find it useful)
  • Promote it on industry specific forums and communities (every industry has lots of forums online. You should go there and promote your content)
  • Promote it on general social communities where influencers may hang out (such as Hacker News, Reddit, etc.)

Contacting people and asking them to promote your content if they like it is perhaps the easiest way to seed your initial readership. People are generally very nice. Just try emailing 10 industry experts today with a link to one of your contents and see how many of them reply.

Slowly, once you achieve a sizable number of readership, every new piece of content that you publish will be guaranteed to be seen by a number of individuals (who will share that content with their own readers/followers). So, it snowballs and your readership increases over time (given you keep producing great content, which is a hard job in itself). Each additional eyeball becomes easier to acquire. That’s the beauty of building a following.

Summary: produce great content, build a following and your startup gets promoted as a side-effect

I would love to hear about which tactics have worked for your startup so that I can update my list above. Please leave a comment below on what you think about this post or if you have anything to add.

The kick of a startup

Yesterday, my startup hit a significant milestone: 10,000 total accounts (trial + paid). And last month marked one year anniversary of launching paid plans for Visual Website Optimizer. I think it is a good time to reflect what it means to me and the business.

Needless to say, I am very happy that we can boast of a small, smart team and big brand customers like Microsoft, Groupon and AMD. However, when I think about it — I was much more excited (and happier) about first 10 paying customers than 10 new paying customers now. Back then when I was launching it, there was an unknown territory to explore and I was a warrior ready to battle the unknown.

Questions and Euphoria

Whether it would work? Or, whether I would need to get a job? I still distinctly remember getting the first paid order and delirium it had caused. Even though I had read almost all essays of Paul Graham and absorbed myself into startup world (perhaps) bit too much, the realization that someone was ready to pay for my hacks was an incredible feeling. Then, within first month of launching paid plans, when the revenue surpassed four times my previous market salary, I was ecstatic. Who could have guessed that? The coverage on blogs, feedback from customers, demoing and closing Fortune 500 customers like Microsoft, 10% revenue growth every month, scaling beyond one 512 MB VPS (now we have 30 servers!). It was all new for me; it was exciting! I loved it.

It can be done!

Since then, inside me, a thought has been taking life of its own. The thought is an incredibly powerful one; the main essence is: it can be done! Today scaling servers, coverage on a major blog, additional customers and many other aspects doesn’t give the same kick like they used to give me. And, I guess, that’s because the question that I set on to answer via a startup has been answered (to a certain extent — of course, I know tomorrow is unknown). Paul Graham’s essays were theory to me, but Visual Website Optimizer is a practical. The initial euphoria of a startup was because it was a sudden transformation for me: from having a regular job to making (unpredictable and scalable) amount of money even while I am sleeping. Now, I guess, the theoretical question has been answered: it can be done! (And, apparently, it can be done by anyone — no special skills needed.)

What’s next?

Well, what’ s next best logical step for my startup? Of course, team will grow, product development wil keep happening (in fact, we are launching a new interface next week) and we may even introduce new products (have exciting ideas – wink, wink). But the theoretical question has been answered and a certain level of satisfaction has set in. What can be the next level of kick for my sweet-little startup? Perhaps doing something that requires another leap of faith and pushes us into the unknown.

Customer service is not cost of sales. It’s a marketing expense

We had a horrible experience with Airtel, our Internet provider, today. Our Internet line hasn’t been working since morning, I registered a complaint and was promised it would be fixed by 6:30 pm in the evening. The time passed and when I checked the complaint status, it was marked closed. Asked for an explanation, a customer service representative put me on hold for — drumroll, please — full 15 minutes before I gave up. Their IVRS system is impossible to navigate and you are actually asked to dial a gazzilion numbers before. Internet is full of complaints about Airtel and they recently ranked as worst customer service company in India. I’m surprised how the highly paid bosses don’t realize this or don’t do anything to do this. Baffled, surprised and makes me punch myself.

Sadly, Airtel is not an exception. Many large companies have impossible customer service processes. What’s even more sad is that this poor customer service experience has become a norm and there are even funny (but true) comics based on this reality. Why can’t be world full of Zappos like companies who believe in delighting the customers?

Customer service is not cost of sales

I think the primary reason for endemic poor customer service is because management typically includes it under the cost of sales head. Unfortunately, cost of sales is something organizations see as an unwelcome item on their balance sheet. They want to reduce it or better still eliminate it completely. Having more staff in customer service centers means more cost, so they come up with (unintelligent and ultimately frustrating) ways to automate the customer service. They fail at this automation miserably and end up annoying the customers. All this is because customer service is seen as cost of sales, which is wrong in my opinion.

Customer service is marketing expense

Ironically, just because poor customer service is endemic, a company can get huge competitive advantage just by having a good customer service. Each customer service interaction leads to either a happy-and-satisfied customer or a frustrated-and-angry customer. Research shows that buying decisions are heavily influenced by peers, friends and family. Advertisements and marketing just creates awareness. It’s ultimately the recommendations that cause people to purchase stuff. And guess what drives recommendations? Product quality and features is one part. The other big part is customer service. No frustrated customer will EVER recommend a service, no matter how many features you cram into it or no matter if you run never ending national TV advertisements.

The right way to look at customer service is to see it as a form of marketing expense. If every customer service interaction creates a happy customer, it should be seen as an alternative to advertising or marketing. In fact, even if most organizations spend even 10% of their billions of dollars of advertisement budget on customer service, world will be a much better place.

Humble plea: if any of the big bosses are reading this post, please do your bit to make the organization embrace customer service!