Indian SaaS

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This time, we are putting pen to paper to explore what it takes to win in the Indian SaaS market. 

Conventional wisdom says that the path to success for SaaS companies lies in conquering the US market. However, a growing number of Indian SaaS entrepreneurs are bucking this trend and finding success in the domestic SaaS market.

We explore the why and how of this rather hotly debated topic and hope you get enough food for thought. 

Before you get into the article, we want to take a slight diversion and remind you to grab copies of the most recent edition of Narrowcast on the Power of Compounding!

In this edition, we’ve got stories from elite founders who’ve cracked the code of compounding and are building generational businesses. 

Featuring: Peyush Bansal, Nithin Kamath, Raamdeo Agrawal, Manish Sabharwal, Vinati Saraf Mutreja, Dinesh Agarwal, Mithun Sacheti, R.G. Chandramogan, and Radhika Gupta.

Get your copy before stocks run out: Amazon, Flipkart. All proceeds go towards educating girls from marginalized communities through our NGO partner.

Now, on to the article. 

Selling Smart: The Insider's Guide to SaaS Success in India

$2-3 billion. 

That’s the estimated size of India’s domestic SaaS spend, according to a recent Bain & Company report. 

Yes, compared to the whopping $140-150 billion US market, it seems miniscule, but there is no doubt that this market is growing rapidly. In fact, at 30- 35% CAGR, it is growing faster than the US and the UK.

However, the oft-accepted wisdom in the SaaS world is that companies must target the US market to achieve success. A growing number of Indian SaaS entrepreneurs are now bravely exploring and finding success in the Indian market. 

So, what are the key strategies Indian SaaS startups can use to capitalize on this untapped opportunity?

Don’t pay for Zoom; pay for air tickets

India’s SaaS market consists mostly of metros and a few large-ish cities. So, it's prudent to invest in face-to-face meetings, as in-person meetings can help you gain a lot more mind share. 

“I tell people that if they meet a customer in person, their average deal size will be 20% or 30% higher, guaranteed, and their renewal rates will go up,” says Kuldeep Dhankar, co-founder of cloud-native monitoring platform Last9.io. 

Leverage your home pitch advantage

This is your backyard. The founders/founding team studied here, perhaps worked a job or two, and have extended family and friends here. So, one can easily reach out to friends from school, college, or previous workplaces and ask for introductions/meetings with target companies. 

While this might seem trivial at first glance, getting your foot inside the door is the most important part of early-stage GTM and is a massive drain on the founder’s time. You need folks who can vouch for you and your product even before you make your first sales pitch. 

Make the customer a part of your story; they’ll reciprocate better to an Indian company too 

In an Indian enterprise, decision-makers and influencers don’t only have to like your product; they must like you and believe in you because their jobs are at stake. 

“I used to constantly take feedback and credit the customers for product improvements. I always ensured that our vision was somehow in their heads because if people connect to the vision, you make them part of a story. Then they will fight for you internally,” said Rahul Sasi, CEO of CloudSEK, a cybersecurity startup.  

What about GTM, you ask? 

Understand metrics that matter

Here are two metrics that matter most in the Indian context:

• Salesperson Conversion ratio: “If I give a salesperson ten accounts, how many will be converted? A guy sitting in Mumbai can give me all the revenue, but out of the ten accounts we gave him, he closed three, and he achieved the target because Mumbai has such a big market, but a guy sitting in Chennai would not have that luxury,” said Rahul. 

• Cost per meeting: “If there is one metric that matters in SaaS, it is cost per meeting. It is basically everything the company spends and the meetings (in a selling context) they can generate. For example, it also includes the cost of engineers writing code. That number is surprisingly revealing, and it solves a lot of things.”

Feature requests must have a ‘dhandha’ (business) end goal 

Indian software buyers are known to ask for custom features. To consider these requests, you need a clear framework, and that’s where Kuldeep’s co-creation framework comes into play. 

Build any feature that matches all three criteria: 

1. Useful to more than the customer asking, 

2. It is part of your current long-range roadmap 

3. Customer commits to pay and promote the feature

Come up with a process to shift from ‘founder-led’ to ‘team-led’ sales 

The journey from being ‘the face’ of the company to letting the team take over is hard, especially in India, where people associate an early-stage brand with the founder’s personality. 

“Enablement is very important. So, I've recorded how I pitch and sell. Salespeople are supposed to watch, recreate, and record; someone must review them. And it has to be a constant and consistent process,” said Rahul. 

Get the right partners early 

Identify boutique channel partners early.  “These are the people you should spend time with in the early days. If you give them 10-15% of the margin, they will happily take you to people whom they know,” said Rahul. 

Hiring the right talent 

Rahul wants founders to focus on two critical aspects when hiring sales talent: recruiting product salespeople rather than service salespeople, and hiring leaders who are doers. 

Rahul: “If you're a product company, you are actually selling use cases and how the product solves problems. But on the other hand, if you're a service company, you are selling a service; it could be anything. It is important for founders to get this, as selling these are two different skill sets.” 

How to price it right?

Know your market and the budgets well. Target the right companies and base the price on what value you can create for them.

A good place to start is to target India’s home-grown billion-dollar giants: late-stage startups or top-listed companies. You've got huge market opportunity as long as the product can cater to their needs. 

“When I say that I’m quoting Rs 5-6 crore, I know your cloud budget is 80 Crs, and I am creating a new value of 10 crores, then my proposal is not absurd. If you're making a proposal, you need to research the new value you are creating deeply and ensure you can capture that value created in your proposal. Seen this way, underpricing is dangerous because it often tells your customer that your confidence and ability to create new value is low,” said Kuldeep. 

Who to sell to?

“In India, the L1 just wants to know which product will do the job best and is within their budget. They usually never go deeper than that. L2 is the one who really owns the outcomes and, hence, is your main target. Sadly, the L3 doesn’t have much say unless your product is truly terrible to use and will make them inefficient,” says Kuldeep.

How do you land and expand in India?

Target adjacent pain points.

“It is important to always look for ways to solve problems adjacent to your first product. While building additional features for your first product is one thing, you need to build other product lines that could solve related problems for your customers,” said Rahul. 

If you want to go deeper, check the full article here.