It’s not easy being an early-stage startup in a domain dominated by giants like Oracle and SAP, especially at a time when the market is hit by a funding winter. It’s like having your hands tied and boxing Mike Tyson.
But Winzard’s CEO, Yugandhar Penubolu has found a way for young startups to punch above their weight and the secret is product prioritization using the 80-20 rule aka Pareto Principle.
Founded by Yugandhar and COO, Anand Francis Joseph, Winzard is a three-year-old SaaS startup offering integrated performance management, employee experience, and LMS products.
In a freewheeling chat with ProdWrks, Yugandhar talks about his startup journey and how early-stage startups must prioritize features, navigate funding, and why online marketplaces for software products are not fruitful for B2B SaaS players.
Read the excerpts from the interview (edited for length and clarity).
1. What shaped your startup journey and what problem did you set out to solve with Winzard?
In 20 years of my career in leadership roles with corporates like CITI, GE, SCB, Barclays, and ACT, I’ve managed more than 1000 people and we used many workplace and performance management products like Darwinbox, Gallup, and SAP Successfactors.
I felt that these systems gave insights mostly to the management but did not adequately provide information and analytics to the last-mile employees in terms of how they could improve themselves. So, we started developing Winzard with a vision to empower all employees in an organization.
2. In your own words, can you tell us what Winzard does today?
3. What sets Winzard apart from the competition?
The existing talent development and performance management platforms in the market today draw the line at providing information to the management about employee performance. They do not tell you what to do with the information. Winzard goes a step ahead and helps you plan actions by using analytics and insights given by the software. Action planning is a part of Winzard. For example, Winzard will tell you who to promote, who to reward, who to retain, and even who to fire.
For employees in non-management roles, Winzard is a platform that shows where they are performing or not performing, and how they can improve with clear calls to action and guidance from supervisor. With our integrated LMS features, they can take courses and assessments to improve themselves by seeing their performance insights with Winzard.
4. Can you tell us about the product development process and launch?
We started developing Winzard with a focus on mainly serving companies with over 20 employees. We signed an MOU and collaborated with IIT Hyderabad for research and framework development of some of the product features. We launched the PMS as an MVP with three clients initially, observed it for three months, took feedback, and then developed it.
5. How do you solve your client’s requirements as an early-stage startup?
After launching we got a lot of feedback and feature requests from clients. Sometimes a few clients would want one feature and other clients would not want it or want it in a different way. Different companies have different requirements for the same feature and obviously, we can’t build everything.
We’ve even argued with clients on what made sense and lost a few in the bargain. But it’s okay when you are an MVP. In this process, we realized that there are huge customization requirements. So, we prioritized and started giving features as options. We decided that whatever we build should be as customizable as possible.
At this stage, startups can think of bringing in a solutions architect to make it easy for the development team in the long run. We brought in Pritesh Parmar, a senior solutions architect with over 20 years of experience as a director of Winzard.
6. How should an early-stage startup prioritize features and product development?
You have to do it by the 80-20 rule – 80% must be clients’ requirements especially if you’re building a SaaS platform. If 80% of the clients are asking for something, then you take it as priority 1. If only 50% of the clients are asking for something, you build it as a customizable option (priority 2). If less than 50% of clients are asking for something, you put them on the waitlist (priority 3).
Priority 1 is what you take up in the next three months, Priority 2 is what you take up in three to six months, and Priority 3 is what you think you’ll take up after six months.
But sometimes, a product or feature may only be 30-40% of the client’s requirement, but you may think it is a good feature to have. In that case, you can go with the customization model where you build a feature and keep it as an option.
7. Do you follow any other framework to prioritize features and develop products?
We do a feature measure. We note down our features and the features of our competitors to know the strengths and opportunities.
There are three parts to analyzing this and including a feature in your product – Based on client feedback, our outlook for the future, and competition’s features. Your product should keep ticking all three boxes continuously. At the same time, we need to innovate and come up with industry-first features.
8. What have been your biggest mistakes and learnings so far in this journey?
I think the first thing that people should do is pick up only one thing, make an MVP, and focus on only that MVP to become successful. We didn’t follow this when we started. When we went to the MVP stage, we built another parallelly and it burnt our resources.
We also had a tough ride as we ended up changing the database itself to build scalability and work for the largest of clients. This meant a significant investment of unplanned money and time being redeployed. The building process took forever and our biggest learning from this was to go to market as quickly as we can.
9. Would you do things differently today?
Yes. We’ll take just one or two clients who are the most suitable and closest to our target user, and convince those clients to use our MVP. We’ll try to have a very good dialogue with them and build an MVP that suits them.
While we do this, we will do the homework on who’s the ideal client that makes sense to us, who has volume as well as value. You have to ensure that you meet at least 70 to 80% of the target segment’s expectations through these clients. So that means this client is a user representative of 80% of the clients in that target segment.
We’ll then set expectations with those clients that we’ll keep probing their team to tell us what they want. Whatever product comes out of this process, they can have it free of cost. Only once the test clients are happy, we’ll launch the product commercially. And only after 3-4 months will we even think of building another product.
10. What do you think is the biggest challenge for you or any early-stage startup?
The biggest worry is marketability. You must understand what your competition does from a marketing point of view, what you don’t do, and how you’re investing in your brand. We have a three-pronged approach to marketing.
The most successful for us has been direct calling, closely followed by direct contacts through references, and then comes our digital marketing efforts. We also have an email strategy in place and we are now working with partners who can sell our products.
11. What about listing sites and online marketplaces for software products?
We are already there on a couple of them but this cannot be the main strategy. I’ve spoken to a lot of people who feel the same way.
12. Why do you think online marketplaces are not that helpful?
The concept (of an online software product marketplace) is slightly flawed as we put our products in the marketplace thinking that the users understand what they want. But, when they see 25 other products there, the user is completely lost.
In B2B software products, 50% of users buy products only based on references and direct feedback. They ask colleagues and ex-colleagues in other companies about products that are working for them. Also, calling and convincing people for a demo works too as they can see the product working and see the value.
13. Who do you have to convince to sell your product - the user or the decision maker?
If it’s a B2B product, it should be the decision maker. You need to find users who are at the decision-maker level. But, it’s the opinion of the decision-maker that ultimately matters. But frankly, it should be the other way around.
So we’ve two different ways of approaching and talking to a client depending on whether he is a user or a decision maker. We’ve figured out that decision-makers want returns and a user wants features. So sales teams need to understand if your client is a decision-maker or a user.
14. Should product development be prioritized based on users or decision-makers?
It must be based on users. You can apply the 80-20 rule here too. In B2B, you cannot meet the expectation of all users. So your priority is to solve the problem of 80% of the users. And you need to analyze who the 80% of your users are.
At the same time, don’t forget the decision maker. A decision maker needs insights, measures outcomes, and reads analytics. He must be able to see something new compared to what he was seeing before.
15. As a founder of a young startup, what’s your gyan to peers to navigate the current recessionary economic environment?
The biggest story is how to sustain in the long run. It is very important to plan how to keep your fixed costs as low as possible and also ensure that your variable costs are easily executable.
Fixed costs are the charges like development costs, cloud costs, etc. Variable costs are your employee salaries and other charges.
As a young startup, you must also try to find your initial set of clients, build for them first and then expand to a second set of clients. Make sure that they’ll still take your product after six months. The important thing is not to be in a hurry, and not to take up multiple projects that will burn you down and your focus will drop.
