Diversifying your product offering with Kovai.co's Saravana Kumar
Diversifying your product offering with Kovai.co's Saravana Kumar
Saravana Kumar:
There is nothing called overnight success. So you need to be patient and always aim for the long game.
Peep Laja:
I'm Peep Laja. I don't do fluff, I don't do filler, I don't do emojis. What I do is study winners in B2B SaaS, because I want to know, how much is strategy? How much is luck? And how do they win? This week, Saravana Kumar, CEO of Kovai.co. A software company offering multiple enterprise and B2B SaaS products. Including a customer success product, a self-service knowledge based product, and enterprise software for Microsoft BizTalk and Azure Serverless platforms. Founded in 2011, Kovai.co has over 240 employees across the UK and India. This year, Kovai.co's annual revenue has topped $10 million. This episode we discuss the benefits of true thought leadership, diversifying your product offering and the winning in your niche. Let's get into it.
Saravana Kumar:
I am originally from India, I came to London back in 2000. For the first 10 years I was working as a consultant in a very specific technology called Microsoft BizTalk Server. It's enterprise integration product, so it helps companies to connect different systems together. So if you look at a large company like a Shell or a Boeing or so, they'll have like 20 different enterprise systems like SAP and Oracle and PeopleSoft and Workday and Salesforce and this and that. They all need to talk to each other at some point. And this Microsoft BizTalk Server, it's a middleware product that sits in the middle and it helps to connect all the systems together. That's my area of expertise on consulting and I did 10 years of that implementing solutions for different customers and that's when I found a gap in the market. Every time, every customer I'm working with, we are redoing same thing again and again.
Once you deploy some solutions into the production system, how do you run it efficiently on a day to day basis? There's the security aspects and the monitoring and analytics and when you have a large team, how do you manage it and those kind of things. That is when I identified a problem and then I started as more like a typical founder. I'm coming from a technical background and there's no business intention. I thought, okay, there is a problem, let me try to solve it. And I started working on it on part-time. So I started building some stuff and then after a year later I went to Seattle Redmond for a Microsoft conference and I was showing to the guys, this is what I've been working on for almost a year and what do you think about it? And everybody said, oh this is exactly what they want and they're really happy to pay for it.
Peep Laja:
What happened in the road to first million in revenue? How did you find your first customers? How did you choose the marketing channels? How were you acquiring those customers?
Saravana Kumar:
Well, coming from a technical background of course, you start from zero, you know nothing about how do you take your product to end customer. When I think back, a lot of things happened without even my knowledge. Today those things that people spend a lot of money, even we spend a lot of money to get to those channels, so the way it worked out well for me was, since 2004, BizTalk Server, even today, if you go and search for any article, anything related to BizTalk, I guarantee the first two results will be something from my blog. So I've written over 500 articles, very deep technical articles about this particular technology. When I launched the product in 2010, and the first thing I did was just put up a website, basic website, over a weekend and then I just put a blog post saying okay, this is what it is and then all of a sudden, the first inquiry came all the way from Hong Kong through the site.
I don't have any connection with the person from Hong Kong and that's how the first customer came for the product. And at that time I had about 15,000 readers for that blog. And considering this is a very niche area, Microsoft themselves got only about 10,000 customers worldwide, for this product. So with that context, you can imagine when you have 15,000 readers, probably you built up that audience of the entire community without your knowledge. So from 2004 to 2006 I was blogging for my own, out of my own interest. It just appears to being a pure technical enthusiast, I was building it and then that became my audience. That is one thing. And the second thing is in Microsoft there's something called Most Valuable Professionals. So it's called the MVP. Microsoft basically monitors people who are very influential in the community. I used to speak in User Group, it's nothing to do with business, it's more about technical User Groups presenting and explaining problems and they give you this MVP award but they're only 20 people in the whole world awarded this MVP for this specific technology.
So if I look back now, you're automatically an influencer within that community, with people follow you and then people look out for your articles and speaking and all those things. So that is a second channel. Automatically you become an influencer and that brought in lot of interest and leads. Later we scaled up, being in London, it helped me to go and speak in various small User Group meetups. And anywhere in Europe it's about couple of hours flight journey. So even if I see there is something coming this evening or next evening, I'll just reach out to the organizers and I'll go present it and that became, every time I go, it's a very small groups, 50 people, some 30, 40 people User Groups. I go present and then you'll automatically, at end of the day you'll get three, four valid leads and then eventually it'll convert as well.
Peep Laja:
A key ingredient missing from a lot of folks thought leadership is actually putting in the thought. By definition, it should be about elevating the conversation in your industry. You can't get there without putting in the work. Thinking about that one thing all the time for years. Saravana has put countless hours into his blog and event appearances and put time and effort into becoming an influencer in his niche. Thought leadership is more than just giving stuff away for free. Here's Andy Crestodina, Co-Founder of Orbit Media Studios on what he thinks makes an effective thought leader.
Andy Crestodina:
My thesis here is that thought leadership is really the intersection between three specific things. One, having a strong personal brand. Two, taking a stand on things. And three, of course, you've got to be an expert. If that looks familiar, this may take you back to college. Remember Aristotle? Remember the three modes of persuasion? Logos, Pathos and Ethos? It's the same thing. Ethos, have a strong personal brand. Pathos, take a stand up for something. Logos, be an expert on the topic. If you broke these down with actual personas, you might conclude that there's something like this, the influencer, the key opinion leader and the subject matter expert. And I'm saying now that you are not a thought leader unless you are in the middle and actually cover up on all three of those tactics.
Peep Laja:
So it was like niche groups, niche events, niche content and you were selling through your expertise. At what point did that start scaling beyond you? So it wasn't just about you in particular, but you had a team that was acquiring customers.
Saravana Kumar:
Once you reach 50, 60 customers, then we started partnerships because since it's a Microsoft ecosystem, there are companies, consulting companies who does implementation of Microsoft products for their customers and again they came inbound as well. A lot of them, they somehow came to know about this product through their clients or somebody. And then we established the partner channels in multiple countries. We established some 40 or 45 partners across the world. They've become one of the main driving factors in terms of bringing leads, even today, for that product. It's more of a partner led product. So we do a lot of the paid channels but the partners contribute nearly 40 to 50% of the revenue for that.
And then in 2013 we started our first annual event. So we still do that in London. This became one of the popular events in that particular community. So about 600 people across the world, they travel to London. It's a in-person event and Microsoft brings about 15 people from Redmond as speakers to that event. So even for Microsoft it became one of the most important event they need to attend, because we bring the right audience for them as well. All top Fortune 500 companies, they come in that event. So that became another important channel for us to acquire leads today.
Peep Laja:
Now fast forward to today, you're not a mono product company anymore, you have launched other products since. So can you tell me about the strategy behind launching more products?
Saravana Kumar:
For the first five years we didn't do anything else, just a single product and we focused and then we have grown the business. It reached a saturation point, you can only build so much. You can't just keep bombarding with more and more features and then you reach a point where that's all you can do from a product perspective and also that the BizTalk Server is a very niche market. At the time is not really big and it worked out well as a bootstrapped company, because as a competition is less of course because it's very niche, small niche, it's not fit for big players. So that helped us quite a bit to focus and get to a reasonable revenue. I think I'll say maybe 5 million or something like that at that point, to get to that level. Then whenever we started thinking, okay, you gained so much experience in the last five years building and selling a product and clearly this is a very limited market and you wanted to do something and that's when we started out.
That is one main reason. And the second main reason is being a technical guy myself, I'm bit worried about losing the team because they get bored. After four, five years, there's nothing much you can do and we built a really good team and I wanted to make sure their career progress is also aligned. So, that is also another contributing factor. Okay, let's do something. And then the second product Serverless360 started. So that is with more with the Microsoft Azure because Azure is getting a lot of traction and we saw similar problems, what we addressed for this BizTalk Server, happening in Azure and that is when we started the second product. And after three years, in 2018, we experienced a problem of these two products require a self-service knowledge base, because we need to have a really good product knowledge base, because we enter dealing with large enterprise customers like Shell and Boeing and Ikea and those kind of people and product documentation is very, very important.
That is when we identified a gap in the market. When it comes to product documentation, it's typically sold by a customer support product like Zendesk or Freshdesk or Intercom, those kind of product companies, but they don't pay too much attention to the documentation site, because their core is solving the ticketing system or a chat and those kind of areas. And when it comes to self-service knowledge base, especially when you have big technical documentation team, we saw the gap and that is how the third product Document360 was started. And recently we launched a product called a Churn360 for customer success. So multiple factors contributed and then we saw there's a potential for us to run it as a playbook. After doing it two times, you know exactly how to do it. Two to three years is what it is required now to take a product from zero to, we keep finding a case of benchmark revenue and we are confident every product we can reach it in a two and three years timeframe.
Peep Laja:
Does each of these products have a separate a go-to market team? Separate sales, separate marketing? Or is it one team serving all?
Saravana Kumar:
We run it like multiple companies within the umbrella brand, Kovai.co, because they are all completely different. Each team is approximately like 30 to 40, but Document360 is bigger. Half of the company's Document360, about 110 people in Document360. But they all operate completely independent way. So they have engineering team is different, marketing is different. I'll say there are four companies within the main company and there's a horizontal common services like HR and Accounts and a small layer, but they all operate independently.
Peep Laja:
Is that a deliberate strategy? To launch products for different ICPs or it just happened?
Saravana Kumar:
It just happened but also I think that is the right strategy as well, because I think I know some multi-product companies, they have a common sales team to sell any product, but the problem with that approach is the team will pick up the easy ones. Some product may be harder to sell, some product may be easy wins. And also educating the team is harder because it's more than a sales guy should know your product very well, the market landscape very well, they probably can't understand four different markets and four different products very well. So I feel it's the right strategy to keep it really isolated. So when you scale, you move from generalist to specialist. You really need more specialist for each one of those disciplines. So, that's how we operate.
Peep Laja:
To win, you need to be a specialist but you also need to have a solid foundation of knowledge. I've been talking for years about the benefits of having T-shaped people in your marketing team, but the theory applies to any area of your business. T-shaped people are the opposite of generalists. It's people who have deep expertise in two, three areas but are also well versed in a broad range of stuff. Like you can't do experimentation without strong knowledge about analytics, statistics, qualitative research and so on. Here's author Mike Clayton explaining the concept of T-shaped people.
Mike Clayton:
If you want to get on, become a deep expert, many people will tell you. These are, if you like, I-shaped people, their knowledge runs deep. When people try to make predictions, try to forecast the future, it tends to be the experts who know one big thing who do particularly poorly. The people who have breadth to their knowledge understand the complex interdependent forces that work on the subject and tend to be more accurate, more reliable predictors. So how can you get the best of both worlds? Well that's where the metaphor of T-shaped people comes in. They have both breadth and depth. They are able to understand and work within a wide range of domains, but within a narrow range of domains, they also have great depth as well.
Peep Laja:
In technology, it's very common that whatever thing you build that's popular, that has traction in the market, copycats will come build near identical product. And so technological competitive advantage will go away unless you stop innovating. What's your point of view on this and what are you doing in response?
Saravana Kumar:
Copycats will come, but what I realized is building products is still harder, when you look at it at the scale. The first 20% will look as if you got identical product. But where the product maturity comes is attention to detail and a lot of details inside the product and a lot of features inside the product. So the way we try to solve the problem is a more innovative, we do more innovation. We are shipping features month after month. How much can you copy? Okay, you need to have equal bandwidth power and thinking and probably you'll be lagging anyway. Only after we release something and then only after a year or so you'll catch up. And also we have a lot of features failure as well. If you keep copying, you don't know which one is working and which one is not working.
So I typically don't worry too much about copycats. And also a product like Document360 where it's more of a commodity market, it's so big, market size is so big, everybody need a knowledge base and you can segment it in multiple ways. You focus on a niche segment where, you could be very specific countries or very specific markets and these days people won't even know, they don't have time to evaluate five different products. So if your marketing message is good, it's not the product, it's like complete package. You need to copy the complete package, which is harder. You can't do it. Product and features alone may not be just enough. It's all about going pretty fast and then innovative and then it's treating it as a full package. We of course invest quite a lot on branding now, our company is in a city called Coimbatore in India.
So it's faster from a hiring perspective, we invested quite a lot on building the brand so people recognize and at least the hiring side we do that and the product side Document360 for example, there's a lot of investment that goes into branding. We work with a lot of influencers in YouTube. There's a lot of investment that goes into content. And today I'm just talking more on Document360 because that is one of the focus for us. It's a visible product in the market. People today recognize that within that knowledge-based space, we became one of the important players and we also got brands like Airtable and G2. If you go to G2's knowledge base today and if you like it, people probably will look at the source code and you'll see references to Document360. So there's a lot of branding that happens by winning large top brands as well. So I think it's a multiple factors there.
Peep Laja:
Busy teams don't have time to evaluate hundreds of product options in the market, because of this buyers rarely choose the best product. Instead, they satisfice. Meaning that they choose familiar brands that offer good enough solutions. So you need to win on other things on top of the product. Starting with mental availability. Invest in getting into the very limited consideration set of the buyers. So when they do have the need and budget one day, they think of you. Five key things to achieve this. One, avoid silence. Continuously trying to reach all buyers of the category. Two, grab attention and avoid sameness. Three, consistently use distinct brand assets. Many leading marketing effectiveness thinkers make the case that differentiation is increasingly hard. So focus on distinctiveness first. Four, be consistent about your brand. Five, repeat yourself a lot. Out of all the ads you run, 60% should be brand ads. People rarely buy brands they don't know.
Do this in a way that makes them think of you the moment they have the problem you solve. What kind of triggers can you design around to do this? Well it's a good idea to start by thinking about your customer's emotional triggers. Will Leach, the author of Marketing to Mindstates describes why.
Will Leach:
There's lots of studies to show you that the vast majority of decisions, like you're talking in the 95 percentile decisions are made emotionally first, then they look for the post-rationalization. They look for, oh, and you're also low price and you're going to make me look quality. They make the emotional decision first. Well if you're not talking to your customer and helping them reach their emotional goals, they've made the decision to not use you long before they look at your price anyways. It's a hard concept to get your head around, but there are studies and studies and years and years of research that are telling you that this is the best way to differentiate yourself, is understanding the emotional goals, those higher order goals that people have, and then tactically talking about those in very unique ways, but ways that create that emotional arousal. So you just feel intuitive, you feel it feels natural to work with you.
Peep Laja:
Why has your company succeeded when others, many others did not? Looking back, what were some strategy decisions that really paid off?
Saravana Kumar:
The way we look at it is, it's not a zero-sum game. The winner takes all. Maybe it will be applicable for Google or somebody, but majority of the time there is enough slice for everybody to take it. As I mentioned, if you segment it correctly, it's always going with a niche. For example, instead of saying customer success software, if you say customer success for B2B SaaS companies, then you can focus everything on the B2B SaaS companies. And if you become the number one player in the B2B SaaS company space, today's competition is intense, 10 years ago, when you build a product, you try to be as horizontal as possible and then you try to acquire customers all different ICPs. You really didn't even think about ICP. Whoever is your customer you try to acquire.
But today's market, the amount of competition and building products, it's better to become a number one player in a small niche and then dominate that niche completely. And that's exactly what we are doing with both the products. So Document360 and Churn360. Because the B2B SaaS is becoming the next to big thing and everybody want to become a SaaS player and we are going after them and we are doing lot of work too, in terms of the content strategy and the type of content we are writing, everything focused towards that and that is how we separate ourselves from the rest of the competition.
Peep Laja:
Even in small niches, content marketing is still effective. Yet I often hear from B2B niche companies that there's no volume for their keywords, no audience for their topics. Here are five content marketing strategies for niche industries from Ryan Law, VP of Content at Animalz. One, create movement first content to build credibility. Two, use targeted case studies to close dream accounts. Three, partner with industry publications to reach hundreds of decision makers. Four, target related keywords and siphon off relevant prospects. Five, use Q&A content to funnel prospects to your products.
What advice would you give to other B2B founders based on your lessons learned?
Saravana Kumar:
There is nothing called overnight success. So you need to be patient and always aim for the long game. That is one important lesson. We stayed there for 10 years and some of the products, see nothing for two, three years. And that's the nature of building products. You need to be pretty resilient and persistent for a long period of time. And the second advice, you need to understand the domain very well, because that is another problem I'm seeing frequently these days. Young kids straight out of Uni, they just jump and then they think they can go build something. You probably can copy some ideas from here and there and then you know you can do something. But for you to be successful, you need to understand the domain very well. I don't say it's wrong, when you're younger, you can't do entrepreneurship, but at least invest year or 12 months or something. Understanding the domain very well. Even in our case, we have four products now, but there are failed products in the company as well.
And if I look back, all those failed products are basically, we thought we can also do it, just looking at somebody's doing well, okay, let's also do it. And we tried it and then only after six months you realize, okay, it requires much more than just the looking at the top level.
Peep Laja:
So what are the three key strategies that help Kovai.co win? One, Saravana became a category MVP.
Saravana Kumar:
If you go and search for anything related to BizTalk, I guarantee the first two results will be something from my blog.
Peep Laja:
Two, they realized that they needed to diversify the product offering.
Saravana Kumar:
Can't just keep bombarding with more and more features and then you reach a point where that's all you can do from a product perspective.
Peep Laja:
Three, they dominated their niche by innovating quickly.
Saravana Kumar:
It's better to become a number one player in a small niche and then dominate that niche completely.
Peep Laja:
One last takeaway from Saravana.
Saravana Kumar:
Run it as a playbook. After doing it two times, you know exactly how to do it. Two to three years is what it is required now to take a product from zero to we can find a case of benchmark revenue and we are confident every product we can reach it in a two and up to three years timeframe.
Peep Laja:
And that's how you win.
I'm Peep Laja. For more tips on how to win, follow me on LinkedIn or Twitter. Thanks for listening.
