How does a startup become an ISV as it grows?

 Jagdish Sahasrabudhe / November, 2017

Description

Jagdish Sahasrabudhe, Global VP, Channel Products and Innovation at SAP America explains how a startup become an ISV as it grows.

Video Transcript:

How does a startup become an ISV as it grows?

Startup goes through multiple, what I call, inflection points. I ran a startup myself from start to finish. One could easily look at the startup journey from the perspective of various decision-making points. These decision-making points can be broadly categorized into two parts. One is more of a technology perspective, technology roadmap, and the other is a go-to-market or a market facing roadmap.

If you look at it from a technology perspective, what a startup needs to do is to define which enterprise software does it want to integrate with, which enterprise software is it really after? Are they more in the financial services industry? Are they more in the retail industry? Do they want to go after the HR market? Do they want to go after the manufacturing market? So there are various considerations that they need to do.

As a startup looks to define its technology roadmap. What is happening is that it’s becoming very difficult to do all these things on their own, and to really define a net new technology roadmap on their own. There are a few. You look at Facebook, you look at Uber and others who have defined a completely new industry. But the bulk of the startups, what they want to do is to play in a defined ecosystem. It can be an SAP-driven ecosystem or it could be another enterprise software-driven ecosystem. From a technology perspective, what a startup needs to realize and understand is that how do I become part of an SAP ecosystem and then align with SAP’s technology strategy in order to grow my business. Rather than reinvent the wheel I would almost always align. There is a market defined. There is a large customer base defined. There is proven technology. How do I in my area align with SAP on the technology aspect, similarly with other enterprise companies out there.

There is the other factor, which is more of a market reach factor. If I put myself in the shoes of a startup. One of the things I can’t afford to do much is to deploy a very large direct sales force. I cannot hire ten and hundreds of salespeople. They are expensive first of all. Secondly, the sales cycles are very long. You don’t know the result neither is the first penning coming in through the door until at least nine months or a year have passed by. Rather than that an alternative and more effective strategy is for the startups to do marketing on their own, but establish a good market channel which is part of a larger ecosystem. For example, all the startups who have engaged with us, they not only get free resources and free technology, but we actually take them to our customers. If you look at it from a startup perspective that kind of a reach and that kind of a value proposition to approach these large enterprises and to have the ability to present their solution, that kind of reach, they would never be able to do it on their own. It would be extremely difficult and cost a lot of money and time for them to do it on their own.

I think the startups have to realize at what points they are ready to make these decisions both from a technology perspective as well as a go-to-market perspective and accordingly align with the right large software manufacturer with whom they see a long-term potential. That’s what I would recommend for a startup.

As to when is the right time to do it that depends on the startup. Sometimes it can be too early in their lifecycle. Sometimes it could be after they have built a product but just before they are hitting the market. Sometimes it could be before they got venture capital because their planning is still not fully baked. Sometimes it is right after they have taken venture capital because that is the time they want to take the product and hit the market. I would summarize it as these are the two different modalities that they need to think on. One is how do I align my technology future and one is how do I align my market reach and go-to-market future.

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QUICK INFO

  • Jagdish Sahasrabudhe, SAP
  • November, 2017
  • 5:25
  • Growth

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