Archive for June, 2011

Developing The Product Mindset

Friday, June 24th, 2011

India has done very well for itself as an IT services destination. In less than two decades, it has reached the #1 spot in the global IT services outsourcing league tables, with over US# 70B in 2010 revenues.

Recently, there has been a mushrooming of IT product companies in India. This trend could be driven by several factors including a passion to create intellectual property and grow up the value chain, frustration with being called “the IT coolies of the universe” and an apprehension with the dimming growth prospects of IT services.

Product companies need to recognize that the product business calls for a different mindset.

Unlike a services mindset, which can be crudely paraphrased by “you tell us what you want, we’ll do it for you – faster, better and cheaper”, a product mindset has entirely different traits.

From having closely observed a couple of the few successful Indian IT product companies, we believe that a product mindset has the following attributes:

  1. The belief that one size does fit all. Like Warrillow in this FORTUNE story, it’s important for a product company to believe internally that it is possible to create a product that is rich enough to fulfill the needs of multiple companies, albeit within a set of finite target markets defined by verticals, geography or company size. Such a belief comes from the ability to divine features from nebulous market requirements and abstract the generic from the specific – in short, product management.
  2. The determination to rally multiple customers around a single product roadmap and implementation methodology. Where some degree of industry-, country- or customer-specific modifications is inevitable, it’s important to create a versatile set of tools that help in their development without disrupting the core product. Ideally, such tools should be usable by third-party systems integrators and customers, and not be restricted to the product owner alone. While the toolset can begin with a simple report writer, it should eventually expand to include formula builders that allow reconfiguration of existing business rules and building new ones as well as screen painters for the addition of brand new functionality.
  3. Marketing, marketing, marketing. Part of a successful product mindset is to recognize that it’s because of marketing that a product company is able to scale up and sell multiple copies of the same software to different customers. When done right, marketing investments payback many times over by way of revenues from multiple customers without proportionately high product development costs. According to anecdotal evidence, a typical American product company invests 1.5-2X dollars in marketing for every X dollars of development. For a product company, it  might be tempting to spend all the capital on engineering under the assumption that the resulting enhanced product would automatically sell more. A successful product mindset recognizes the folly of this notion – after all, the old adage “if you build, they will come” doesn’t work any longer – and resists the temptation.

It has been said that the product mindset is very much at odds with the typical services mindset that has dominated the fabric of the Indian IT industry since inception. Some have even gone to the extent of saying that the difference is so stark and irreconcilable that India shouldn’t bother with products. We don’t agree – it’s a matter of time and reorientation before product companies in India are able to develop the required mindset to succeed in the product business. Ramco Systems and Oracle Financial Services Solutions (formerly i-flex solutions) are two lighthouses that are already available for others to emulate. Maybe Infosys’ recent decision to develop products under a separate company is the way to go.

EBA myBank Will Be A Hit

Friday, June 17th, 2011
EBA Clearing has outlined plans to launch a pan-European electronic payments service for online shopping, enabling buyers and sellers to complete transactions through their e-banking portals.

eba01A couple of days ago, the European Banking Association outlined plans to launch a pan-European electronic payments product called myBank for online shopping, enabling buyers and sellers all over Europe to complete transactions through their Internet Banking portals. Click here for more details.

I predict that myBank will be a hit.

No, not because it’s innovative – it isn’t. This non-card alternative payment method has been around for several years. There’s at least one provider of such payments in the USA (Moneta), UK (eWise), Netherlands (iDEAL) and India (BillDesk). Called ‘Secure Vault Payment’ or ‘SVP’ in the USA, these payment methods connect online shoppers with Internet Banking portals of their domestic banks from where they can make payments to merchants by using their regular Internet Banking credentials. They offer several advantages over card-based payments to shoppers and merchants alike and have been gaining a lot of traction in recent times. Click here to see how SVP works.


Ironically, for all the hype around its entry into payments, Google uses an SVP – and not Google Checkout – for receiving payments for its AdWords advertising program! But, I digress.

Where myBank trumps all incumbent providers is in its awesome geographical reach and inherent ability to gain consumers’ trust.

While domestic transactions are a given, myBank can also facilitate cross-border transactions within the EURO-zone. As far as I know, myBank is the only multi-country SVP payment in Europe or elsewhere.

Coming from a trusted banking alliance like EBA, myBank is very well positioned to address a major hurdle standing in the way of mass adoption of SVP, namely lack of consumer trust. I know many consumers who avoid SVP because they’re wary of being ferried around their respective banking portals by third-party providers. They see potential risk of exposure of their Internet Banking credentials in the hands of these providers who’re often venture-funded companies in near-startup mode. This could well be a perception problem since I’ve been assured by many providers that they can’t view usernames and passwords entered by consumers into banking portals. However, I haven’t seen such a reassuring message in the normal payment workflow of secure vault payments. Besides, in the process of providing concierge service during the checkout process, SVP providers do seem to be ‘looking over the shoulders’ of consumers as they enter their Internet Banking credentials, so it’s open to question how many consumers would take their assurances at face value. Consumers shouldn’t have any such apprehensions with a product like myBank that belongs to a consortium of banks.

By using SEPA / PE-ACH rails, myBank shouldn’t cost merchants any more than credit / debit card fees. Therefore, merchant acceptance of myBank should be a cinch.

Overall, myBank seems to have a bright outlook. If its vision is executed well (Probability = 0.9) and on time (Probability = 0.5), incumbent SVP providers in the Eurozone will have a lot to fear from myBank. They’ll need to find ways to differentiate their offerings to survive the almost certain onslaught of EBA Clearing.

Who Will Bell The ‘QR Code Reader’ Cat?

Friday, June 10th, 2011

Click to see the ad

In the three months since we’d written about QR codes, their usage by advertisers has seen strong traction. J P Morgan Chase’s ad in the FORTUNE magazine and Bosch’s billboard are just two random examples of QR codes found in the print and outdoor media. Overhyped as it sounds, there’s some truth behind the claims made in report by Mobio Identity Systems that QR code “scans are skyrocketing”.

However, after a quick-and-dirty study of the user community during the same period, we learned that:

  1. Many users are unfamiliar with QR codes and end up doing nothing when they see them.
  2. The few that have heard about QR codes hesitate to scan them because they’re not sure what would happen next (typical user concerns include “malware”, “identity theft”, and so on).
  3. The skeptics amongst them question why advertisers simply can’t display the URL of the website to which the QR code anyway leads them
  4. Very few users feel motivated to download and install a QR code reader application, without which they wouldn’t be able to scan the codes.


As with any new technology, the first two issues are quite natural and can be overcome with a little guidance in the ad. Like we’d done in one of our print ads that used QR codes, it would help to provide a short explanation of what to do when the reader sees a QR code (e.g., Point your phone camera at the QR-codes on each corner of this ad to check out GTM360 on your mobile phone) and what to expect when they scan them (e.g., Follow GTM360 on LinkedIn).

As for the third point, it has a straight-forward response: To maximize conversion of visitors to buyers, ads increasingly direct readers to separate landing pages instead of the homepage. Most landing pages have long URLs (e.g, that are painful to type out using smartphone keypads, so QR codes provide a frictionless alternative.

However, the last issue is not the least issue.

Contrary to reports claiming that many latest models of smartphones come pre-installed with a QR code reader application, we couldn’t find evidence of this in iPhone 4, iPhone 3GS, Samsung Android or Nokia E7.

Agreed that it might only take a user a few minutes to find, download and install a free QR code reader application on her smartphone, but the question is, why should she bother? As my 13-year old daughter asked me cheekily, “Why the heck should the reader of your ad bother to download and install an app just so that they can follow your company on LinkedIn or retweet your ad? What do they get out of it?”

This question is difficult to answer other than to say that the advertiser has to provide a strong incentive – by way of exclusive content or promotional offer or whatever – to make the download and installation happen.

Which leads us to the following question: Which advertiser should provide this incentive?

Will JPMC incent the download with the knowledge that the user can use the same app to scan QR codes in ads by Citi, Goldman Sachs and other competitors?

There are no easy answers to these questions. At the same time, we do foresee the following ways to resolve this issue:

  1. QR code reader apps offer branding opportunities for individual advertisers, thus providing them with the motivation to incent users to download apps carrying their branding
  2. The incentive is provided by a consortium of advertisers
  3. The onus of downloading and installing the app shifts to users if they see discount stores and brand-neutral merchants making heavy use of QR codes in their ads.
QR Code for downloading VCF file

ADD THIS CONTACT? Scan your smartphone here to add this contact to your phonebook

Meanwhile, as the big issues get sorted out, we explored the possibility of using QR codes to solve the narrowly-defined, yet equally important, problem faced by sales and marketing professionals with getting their collection of business cards organized. Most of them collect a couple of cards every day. We all know how cumbersome it is to manually enter contact information from a business card to a PC or mobile phone. General experience with business card scanners hasn’t been too great since text recognition supported by most scanners meant for retail use sucks. We thought of solving this problem by converting the contact info into a QR code that is printed on the back of a business card so that, by scanning a smartphone over the QR code, the contact gets added to the phonebook in two taps. We piloted this using the QR code of my business card as shown on the right. It worked fine on an iPhone. On a BlackBerry and a Samsung Android smartphone, we were able to download the contact info successfully into the handset but, from there, we couldn’t figure  out how to add it to the phonebook. If any of you readers have cracked this part, we’d appreciate if you could share the procedure you followed by way of comments below.

MSEB Tops Online Bill Payment Consumer Experience

Friday, June 3rd, 2011

In the past, I’ve blogged about the friction involved in many Electronic Bill Presentment & Payment (EBPP) systems operated by banks in India and the UK. My recent experiences with those of a leading Indian TELCO and British Financial Services company are no better.

On the other hand, I’ve also raved about some excellent implementations of consumer IT by the public sector.

Let me add Maharashtra State Electricity Board’s EBPP system to the list of the latter – it’s one of the best online bill payment systems I’ve come across.

MSEB is the state-owned power utility for the state of Maharashtra in India. Over the past six months, I’ve been using its online bill payment solution. It tops the consumer experience of any EBPP system that I’ve used so far. And, since MSEB hasn’t pulled the plug out on me – literally – I’m sure its backend is no weakling either.


MSEB Electronic Bill Presentment & Payment Website

Accessible from the website of its distribution subsidiary called MahaVitaran – Maharashtra State Electricity Distribution Company Limited (MSEDCL), MSEB’s system is extremely quick and easy-to-use. You don’t have to register and wait for weeks for the first bill to be posted online, as has happened to me with a few other bank-based online bill payment websites. While registration is permitted, it’s not mandatory. If you register, you can access your monthly bill by logging on with your user name and password. But, even if you don’t, all you need to enter are two pieces of information – Consumer # and Billing Unit – that can be found easily on the bill. What’s more, the system supports a wide range of payment methods including credit card, debit card, and bank transfer via Internet Banking. After you make the payment, the website issues a receipt in a choice of rich PDF and plain TXT formats that you can view online, save and print.

In the absence of password protection for viewing bills, it might appear that one person will be able to view another person’s bills. However, consumers, security specialists and privacy advocates alike can rest assured that doing so isn’t that easy: The voyeur will need to know not just the other person’s Consumer # but also his or her Billing Unit. Given that there are tens of millions of consumers and over 1,000 billing units, the chances of anyone correctly guessing a combination of Consumer # and Billing Unit are indeed very low. I was initially wondering why MSEB insists that the user should enter both Consumer # and Billing Unit when a given Consumer # is likely mapped to a unique Billing Unit. I could understand the logic behind this design only when I realized that MSEB has possibly used this simple and ingenious mechanism to plug what would otherwise have been a serious security and privacy hole. This is another example (click here and here to see a few others) that shows that it is possible to build in adequate security and still provide a frictionless online interaction experience to consumers.


Very high downtime!

If MSEB’s bill payment website has one blemish, it’s a very high downtime. During a recent visit to pay a bill, I was shocked to find that the service was unavailable for three days. Hope MSEB realizes that such a long downtime is unusual for a consumer web application and makes amends going forward.

The icing on the cake is that MSEB doesn’t charge anything extra for its online bill payment service. Given that it provides a highly convenient alternative to visiting its offices and standing in long queues to pay bills by cash or cheque, I’d be willing to fork out around INR 50 per bill.

Please take the poll below to specify how much charges would you be willing to fork out for the facility of paying your monthly electricity bills so easily over the Internet.