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April - 2009 - issue > In My Opinion

Building a software product company in India: A Perspective

Sridhar Vembu
Thursday, April 2, 2009
Sridhar Vembu
One of the challenges of being a software product company in India is that professional services companies dominate the IT landscape. This manifests itself in many ways; indeed it is fair to say that the very word 'software' in India has come to be associated with providing professional services.

This services-oriented industry mindset means that a product company has to cross several hurdles, starting from recruiting people to creating efficient internal processes. What we have learned from over a decade of operating as a 'different' kind of company in India is to be patient and pave our own path.

Let's consider recruitment first: it is hard for a company that is so different from the mainstream to stand out and attract the required talent pool. The prevailing mindset is that a product company is 'risky', while a services company has a safe predictable business model. Prospective candidates generally prefer companies that, from their perspective, have proven models and shy away from companies with perceived risky models. This has forced us to be very creative in our recruitment, something that I have written about extensively in our blogs.

Indeed, the sheer necessity of finding good people to work for us forced us to explore alternative paths, and our entire culture has changed as a result. For instance, we tend not to focus much on academic credentials; instead we prefer to hire people who can get stuff done in the real world. It is amazing to see how well this principle works in practice, yet how hard it is to convince people, who haven't experienced it, about this. People seem to be so overawed by fancy credentials that they just don't bother to look at the data supporting their real world relevance. This is even truer in India than, for example, in the U.S.

Second, we also noticed that most of college education really doesn't add value; so we created our own alternative program and hired students directly out of high schools. This has worked significantly well for us. We would likely never have done these if the hiring environment weren't difficult for us. Even after hiring, until new recruits get familiar with the company and become comfortable about our business, the lingering question is always there in their mind. Every new hire-orientation I attend will have at least a couple of people asking the questions 'Why don't we do services? Wouldn't that be an easier business'. So often have I answered that question that I can now answer that question even in my sleep!

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Reader's comments(5)
1:Lack of sales and marketing experience is the biggest Issue. Product oriented companies needs in-depth understanding of the current and future market trends, strategies to cope with difficult times. While the big companies like TCS, infosys have in-house resources to face these situations, many small and medium companies do not have sufficient in-house resources to take up the challenges. But these small companies can overcome the difficulties by outsourcing their sales and marketing requirements while they continue to concentrate on their core strengths of product development. Also, the Indian companies that have good software products should now look towards International markets to expand their revenue potential. Sales and marketing outsourcing can play an important role for these companies in developing successful Marketing strategies for these international markets. We at Imarketia, Dallas, USA associates with companies with good domestic products and felicitates their entry to American markets. We provide compete range of Sales and Marketing solutions to companies looking expand their businesses into America.
You can get more details at www.imarketia.com
Posted by: Steven Smith - 25th Dec 2011
2:Hi...We are exactly trying to address the problem for s/w product companies in India. We specialize in 360 degree product management. One of the service offering is "demand generation, client acquisition and marketing".
Please visit us at www.confianzys.com.
Posted by: Hari Prakash - 08th Oct 2009
3:Dear Sir,
I will complete my B.Tech in Computer Science in mid-July and seeking job opportunities in a software development company and not in a sevice providing company. So on which parameters we should decide that a particular company would give us immense opportunities for learning with challenging projects and challenging work environment.
Posted by: Sameer Goel - 06th Jun 2009
4:Hi Sridhar,

Your article truely describes the current scenario. Software Services model has proven to be successful till date. But we need software product companies as well to have sustainable IT ecosystem in India.
Posted by: Biren Parekh - 13th Apr 2009
5:hi there....some valid thoughts in your article. One major flaw that I found is that we also lack in sales and marketing in this field.
Posted by: Kumar Kunal Singh - 13th Apr 2009
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