Tally: The Brand Mystery Decoded

Date:   Wednesday , June 02, 2010

When Bharat Goenka says, “If you want to build a successful product story, you have to make it the best and not the cheapest,” it echoes his own journey to build the best accounting software brand in India. If there is one software product that is known to every man in India, then it must be Tally. Calm and composed, Goenka has his own charm and his being soft natured may be mistaken to be a weakness by many; however, in contrast it’s this attitude that helps him to be a visionary. Without his vision, Tally, which has emerged as a top software product will not have materialized at a time when computing was not even a buzzword in India. It’s a product that revolutionized the way businesses at the bottom of the pyramid perceived and leveraged technologies.

This Bangalore-based financial accounting software company that today enjoys an unrivalled 95 percent market share in India, started with the conviction and vision of two men, late Shyam Sunder Goenka and his son Bharat Goenka.

Birth of an Idea

It was in the 1980s, when Sunder Goenka was in his textile mill and something caught his eye. It was an ad of IBM in a pamphlet. ‘The quality, power, and performance of the IBM Personal Computer are what you’d expect from IBM. The price isn’t’, was the tag for the IBM PC, which heralded the start of the personal computer age. While companies like IBM and Apple signaled the computer age from the US, Sunder Goenka rallied for a software revolution in India. He saw an opportunity to create a brand which was ‘made in India and made for India’ and it led to the birth of Tally Solutions in 1986. Taking a close watch into the businesses, he realized that to operate the simplest of applications, it required one to know numerous commands. For him it was like ‘buying a car to be a mechanic than to drive it’. He immediately exchanged ideas with his son Bharat Goenka, who was a coding expert, and junior Goenka right away began utilizing all his coding skills to create a better solution.
“After four months, I showed the first demos to my father. There was a payment for traveling expenses with the entry code ‘T001’. My father couldn’t understand the need for codes, and we told him the computer does not understand English, it only understands codes and it’s easier to write programs with codes,” says Bharat reflecting on the initial days. Sunder Goenka, however, saw it in another light. He sent his brilliant coder back to the drawing table, as he was particular that any software needs to be programmed to make the life of the user easier and not that of the programmer. That set Tally’s benchmark. The product should be easy to use, convenient, and reliable irrespective of being pricey or not.

Eventually, Bharat came out with what was recognized as the first ‘codeless accounting’ software. However, the practice was set in a way that the senior Goenka would try something, and if he couldn’t do it without his son standing behind him, it had to be redone. This imbibed a different discipline into Tally’s brand. In simple words, it ensured usability and customer experience in a much efficient manner.

However, success doesn’t come easy. “We expected that every time a computer is sold in India it will be sold along with our software as a standard feature, but it didn’t happen. They got sold with some systems, but not to the extent we expected; I didn’t lose hope however,” Bharat recalls. The father-son duo was sure that if there are 10 million businesses in India, then at some point of time each of the organizations will have computers. In such a computer intensive market, the market opportunity will build up on its own. The key requisite was the popularization of the product; and instead of relying on assorted marketing tactics they took it in their own hands.

The father and son, who formed the core team of the company, believed in interacting with customers directly and making the sales, in line with the saying ‘if a product can’t be sold by the makers themselves, no sales team can make the sale’. As a result, out of the first 500 Tally software packages, 400 were directly sold by Sunder Goenka and Bharat Goenka to the customers. A lot of attention needs to be given to the requirements of the end users, and Bharat realized it in the early days. No wonder, in the first nine months they had to correct and upgrade the software every two weeks. Whenever they approached a customer the main goal was to shed all biases for the product and instead to understand the product from the customer’s psyche. It also reflects the biggest strengths of both the Goenkas as every other entrepreneur; they were guided by the two great virtues - simplicity and the willingness to accept the inadequacies in their own product. This also became the base for Tally’s sales team. The journey from then on is history.

Lessons from Experience

A glance at Bharat Goenka reveals his humble existence, yet he continues to remain the force behind every milestone that Tally achieves. The junior Goenka had just a single mantra, ‘run behind your customers, money will flow in on its own’. According to him, if he acquires 100 customers, they will lead him to another 100 users who in turn will give access to 10,000 users.

Today, the company boasts of a strong customer base across 100 countries, with three million customers in India alone. It’s his stubbornness in terms of business that helped Bharat to refrain from all distractions and bring Tally to its present state. “When we started in the early 1980s, everyone in the software industry was in products but soon they shifted to services, we were the only ones who stayed put in products,” he recalls. The decision was considered immature by many of their business counterparts at the time, but it hardly bothered the Goenkas. “We had a belief in India and Indian business,” clarifies Bharat. It’s the composed nature that allows him to face any business intricacy with a different take.

For instance, software piracy has witnessed condemnation from every software business, with Indian tech firms losing a whopping $2 billion every year to piracy. In fact, Tally too has been hit with a piracy rate as high as 90 percent. However, unlike others who are still under the dread of the piracy issue, Bharat just shrugs it off. “Only popular software gets pirated, so concentrate on making your software popular and piracy can be dealt with later,” he asserts in a no-worry tone. Goenka doesn’t blame his unauthorized consumers for it; rather he revised the software channels to make it easily available to the consumers at large. “We switched to a regional distribution model. Today we bill 270 regional distributors spread across 150 towns directly. These partners offer us a better market coverage due to their knowledge of the local markets and credit allocation capabilities,” he says.

A young entrepreneur at heart and spirit, Bharat Goenka is still ready to recreate history with a new edition of Tally, but if he starts he will still imbibe his two foremost strategies. First, he knows that he will venture into something that caters to businesses and not consumers and second, he would rework to create a new pool of customers for his product. No entrepreneur will enjoy an already existing customer base, rather in the formative years of the business it has to be created through ceaseless pursuit. There will be many blocks for any product entrepreneur, especially the challenge to sustain themselves initially with the little crumbs of cash that comes via licenses and from the customers. However, Goenka advises that in the initial stage companies have to learn to survive with the limited cash, instead of being lured to service based deals. “The main objective of any product company is to achieve a pool of at least 10,000 customers; however, the lure from services that guarantees a continuous flow of money tends to distract the conviction. They become their own bottlenecks to achieve what they had envisioned about while first delving into the venture,” the experienced Tally founder sounds a warning.

Also in business, an occasional look into history becomes important to chart out the future course. It could be either the observance of the way volumes and profitability changes or the way the methods of doing business changes. For Tally’s mentor, the second aspect is more practical. He witnessed that in almost all cases one would find that the number of changes that took place in the methods of doing business in the last five years was much higher than the number of changes brought in during the previous 10 years. So, it can be expected that in the next two to three years there will probably be more than what happened in the previous five years. The thought about changes is both terrifying and exciting at the same time, and it’s always seen that a lot of time and emotional energy is spent in resisting the change. For Bharat Goenka, the case was different. He did not wait for the change to happen, rather he believed in being the creator of change.

If you have decided to relentlessly drive the entrepreneurial spirit and build a quality brand, this little piece of advice from Bharat will help in the entrepreneurial endeavor. “You always have two choices. Make the change happen and enjoy the process of directing it, or resist the change and suffer when it becomes a reality - as it surely will,” says Bharat as he concludes in a foreboding tone.

In India, entrepreneurs are mostly misguided by the pre-conceived notion about the country’s affordability problem. The common perception that price is a major factor in India is vehemently disputed by Bharat. He is quick to pinpoint that Nokia’s high end phones enjoy the highest marketshare in India, despite being known to be pricey. “It’s all about the trust that you build up in the consumer’s mind. If they can trust you as the best brand, they are willing to pay any amount as they know that it won’t fail them,” he asserts. Reduced cost cannot be a USP for a long time, as there will always be someone to provide similar solutions with a further lowered price. To put it in his own words, ‘Get recognized for the best products, not for the low price band’. It calls for perseverance. He feels that a best brand may take a 15 year long stint to be recognized and the test of an entrepreneur lies in the continuous struggle via improving the solutions as per the consumers’ convenience, time and again. The success of Tally and the evergreen aura of Bharat Goenka stand a testimony to this.