Karan SingalVice President at ConnectAndSell, Inc.

Founding team ConnectAndSell, Inc. Ex Deloitte Consultant.

Recent Answers

You are the best judge of the cost and time estimate to do this. But as long as it does not take away a lot of time and attention from running your core business and growing it do it.

They way I would price it:

1. Hourly fees upfront or to be paid with milestones.(so that you are not worrying about cash flow problems or diverting cash to this while you could be using it for growing your core business)
2. Charge per user on top of the customization. Discount it but charge something. Figure out if they are charging for it from whoever is going to be using it, if yes establish a revenue share, very simply if they are doing all the work to sell and market it and you are doing all the work to build and maintain it then you should get at least 30% of the per user fee they are charging on top of the modification hours. You can also forego your upfront modification for getting 90% of the per user fees, if you truly believe they will do a good job spreading it around in the marketplace (get a commitment from them in writing of x number of users per months on a 12-24 month contract that they need to pay for)

2. If they are not charging their users, and giving it for free, figure out what value does it and to their core business. If it does add value to their core business then they should be willing to pay a price for it in addition to the modification charges.

Major impact of branching the platform - You will have to bug fix, support and make sure it's up. It can become a animal of it's own so this whole thing has to be profitable enough for you to support the dedicated resources you'll need. support it constantly and make you money in the process.

Also, look at co branding options, if possible. Don;t white label it if you can avoid it. It becomes a lot more interesting then.

For your first few customers as long as you don't give your product for free for a chunk of time i.e. anything above 3 months all concessions are fair game.

I remember, when we were starting out for the first few customers we went above and beyond to make it easy for them to use the product, if that meant being on call we were there, doing manual data entry we were there, getting them there prospect list we were there.

And giving all of that concessions is very profitable for you over the short term as they become great reference customers for you, which is what you'll need to scale, raise money and get more customers.

I know my next comment will be contrary to popular wisdom, but everyone will tell you do not let the customer drive your product plan or development cycle. Do not build custom features. You have to heed to such advice carefully. It depends on what your solution is and if you are focussed on a specific industry, If it's already on your product plan and you just intended to do it later and need to accelerate it in order to keep the customer happy do it. If it's something that is not on your product plan but the customer is asking for it, figure out if this is something that other customers are/will ask for if not don't build it. e.g. A big customers wants us to integrate to this proprietary CRM. You say NO UNLESS you are going to loose them to a competitor who is willing to do it.

Do not ever make a concession that you will be unable to deliver on. You will loose their trust, which is the most important thing you need to work on with new customers especially when you are new. Be honest and tell them that you will be unable to deliver on what they are asking for in the given timelines. They'll appreciate that a lot more than you failing to deliver.

In my experience, the first strategy is successful when you already have street cred. Have built a couple of start-ups before and have a very strong network and relationships or you have been working for a tech company for many years in a group that made it very successful decides to leave and start something that solves a problem that your employer wasn;t willing to solve.

The second strategy is better for people with no street cred and limited networks. As you need some proof of traction before anybody will look at you. Even then, financiers may or may not come find you, you may still have to go look for them.

I can offer the validation steps to see if what you are intending to do will work:

1. Are your / your competitors customers willing to pay a premium for resources that have extensive experience?

if not, then

2. Do you still make enough money to support the business by hiring more expensive experienced employees and offer the product/service at the same price as the competitors?

3. Would you be able to offer something more than your competitors that they cannot because they have offshore resources that the customers value and will be willing to pay more?

If the answer to any of the three question above is a firm "YES" you have a chance of winning the market. Else, you should go with the same delivery strategy as your competitors.

The only glitch is, once the competitors start seeing you win in the market and because they are potentially sitting on more cash than you they may catch up pretty quickly to delivering from on shore resources.

In my personal experience from B2B start-ups.

The best time to start building a brand is from day 1, I know this sounds cliche but let me elaborate:

Three key components through which you can build a brand without spending too much money:

a. SUPER Duper Customer Service and Support. That is the best and the cheapest thing you can do to build a brand for your early stage start-up from Day 0-1. Pick up calls within 2 rings, respond to emails within 5 minutes, resolve issues within 30 minutes.

b. Next stage is: Killer Messaging

When you start selling in the open marketplace through Cold Calls and Email Campaigns:

Focus on messaging on your website. Have a very clear value prop right on the home page with a 60-70 second professionally done video and use services like TechValidate to get Customer reviews on.

c. Stage 3: Spread your wings. Become a thought leader.

Lead your industry segment by producing insights and truly thought provoking content. Participate in smaller focused conferences/seminars where your target audience visits,

I have always wondered about that model when it's not vertical and anyone can sell anything Digital, Physical or Service. (Gumroad, Selify, etc)

Marketplaces tend gain traction faster when they are vertical and specific. My best word of advice would be to select the vertical that's bringing in the most traffic, (Hope it's a big vertical in itself) and focus on studying the consumers of that vertical and BE THE ONE ECOM SOLUTION for that vertical beating everyone else hands down (case in point AirBnB vs Craigslist). Make the experience of the specific vertical buyer better than any other marketplace. Focus on making the experience flawless and friction-less.

It'll become much easier to add other verticals later vs. trying to be everything for everyone from the get go.

The legacy solution is InfoUSA. Not sure how good their data is anymore, but used to be solid a few years ago. Mellisa Data, relevategroup and a few others do this. Do a search for "Data Append" on google and scroll through the first few results. I'll have to dig it up but I think there are about 5 big ones in this space. Cost anything between 1-15 cents a pop.

I would imagine Trucaller is heading in that direction.

That's a very unusual problem, I'll be honest I always have work.

My two cents,

If you have a solid team that has the ability to build a successful product do not loose them. Finding a team that can execute quickly and successfully will get you a long way and if you have one. DO NOT LOOSE THEM.

But I have to say, if the product is successful then in theory it should be growing like mad and that should pose multiple challenges on the infrastructure and the product itself. The team will have enough to do to keep the lights on else the product itself is not successful and needs something more to make it successful.

Finally, if the product is actually successful and is not growing due to external factors then

1. I would build a new/tweaked product that the market would accept
2. If you are confident about the product, I have put developers on support calls, user demos and shadowing sessions so that they experience what the users / customers are experiencing.
3. I like to have them as a fly on the wall in prospect conversations to give them context of what the market is saying ans what the needs are.
4. IF you have truly done all of the above and have a successful product, I would send the guys and gals on vacation and tell them to enjoy. They will be doubly productive when they come back and more appreciative than creating random unnecessary work for them.

But again DO NOT LOOSE THEM IF THE TEAM IS SO STELLER. (Actually can I hire them?)

Buyer Centric on it's own may work if the value proposition is strong e.g. Odesk, elance , every Job board under the sun (in some ways), etc.

Bounty based though is intimidating because of the process of defining rates is arbitrary, in a non f2f interaction it's much easier to have a pre-defined set of rules to engage in.

But there is a classic problem of chicken and the egg problem in a buyer-centric marketplace and if one does not think it through, you may be in for a very long haul.

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