The Modi operandi

Both sides have companies or start-ups that have signed on with a slew of Memorandums of Understanding and pilot programs.

By OPHER MOSES
Indian Prime Minister Narendra Modi in Jerusalem, July 5, 2017 (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
Indian Prime Minister Narendra Modi in Jerusalem, July 5, 2017
(photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
It is now a little over a year since Indian Prime Minister Narendra Modi visited Israel in order to expand trade and economic cooperation. Since Prime Minister Benjamin Netanyahu returned the gesture earlier this year, there has been much talk about “potential.”
Both sides have companies or start-ups that have signed on with a slew of Memorandums of Understanding and pilot programs, and are participating in inter-governmental efforts to provide platforms that access each other’s markets. For example, the India-Israel Industrial R&D and Technological Innovation Fund; the India-Israel CEO Forum; the India-Israel Innovation Bridge, an online platform to encourage and facilitate collaboration between Israeli and Indian start-ups; the renewal of the Indo-Israeli Agriculture Project; and MoUs between the countries’ space agencies name just a few What seems to be lacking in the face of cutting-edge products is a corresponding cutting-edge India market- entry strategy or system. Many of the companies I have corresponded with are stuck in the perpetual pilot/MoU stage without ever being able to monetize any of the gains of the process.
The lack of business strategy mostly appears to be due to the cultural deficit of doing business in India.
Most Israeli businesses are intimidated by India’s vast and diverse market and, limited in their preparation, they remain “on the ropes” when it comes to market penetration. This leaves Israeli companies hoping their Indian partners will provide the hand-holding necessary through the process or help them find a distributor they can trust. There has not been much in the way of data proving the business success of these partnerships, even after the recent spike in bilateral relations. The exception is always the HLS sector.
This is not to say that these results cannot be turned around. Rather, it points to all the hype that is based on goodwill.
It would be hypocritical of me if I also provided opinions and no tangible strategies as a professional who has worked with many Israeli companies penetrating India and also as a fellow member of the Indian Jewish Diaspora. Yes, there is some Jewish guilt there. So let’s get into the main areas that need addressing.
• Understanding the culture While Indians and Israelis might both communicate in English, they do not understand each other. During my C-level meetings in India, I also initially got only good news. Often I can only pry open a can of worms (challenges) by switching into Hindi or bonding over a recent cricket match or political event. Israelis don’t necessarily have this privilege. So, often, preliminary meetings are extremely optimistic and lull Israelis into believing they do not need an India market expert to craft strategy.
Foreigners will seldom hear a definite “No” when asked if a specific task can be performed. This is not to say that Indians don’t discuss bad news or don’t give negative feedback. It’s just a cultural practice of not being negative to a “guest.” You are a guest for now, and will likely be blindsided to dangers to your business until you have created a long relationship that allows your business partner to be candid with you.
Repackaging a product for the Indian market is an area in which few companies excel. Many companies look at India as a country instead of a continent with individual tastes and preferences in various regions.
Companies need to understand the culture – the pricing and payment terms, the demographics, and overall preference for products – of the particular region of India they plan to penetrate. The issue here for Israeli companies, especially start-ups, is that all sales results were due yesterday, so time isn’t on your side, not to mention that the Indian word for both tomorrow and yesterday is kal, so local time lines are fluid.
• Creating systems Most start-ups I have dealt with lacked an internal system that could be used to measure pain points or quantifiable value creation for a potential market in India. They were all eager to set up pilots with their Indian counterparts with the intention of monetizing the solution later.
There was no deep-diving among these companies of what the true “delta” value was between the added value of the Israeli product and the current solution on the ground in India. For example, if the current competitive product in India would be ranked 6/10 on value, is the new Israeli product 8/10? Is the delta between the ranking (20% more) actually high enough to warrant the Indian client changing his preference to a new solution and pay for it? Not surprisingly, these collaborations normally ended with Israeli companies being baffled by the lack of traction of their solution they had so eagerly conducted a pilot for, all the while getting positive or limited feedback from their Indian counterparts.
The ability to streamline processes for all the critical stages, from employee on-boarding to client on-boarding, from a client escalation tree to a post-sales directive, are a few examples of the prerequisites to success.
This might not be as vital if you are an early stage startup with less than five people, but for any company larger than that the processes start getting ambiguous and make the entire organization inefficient and inconsistent.
I left many conversations with CEOs baffled by their lack of initiative to create a streamlined process for even the most vital components like sales training.
That quickly turns into bad client on-boarding and then to constant escalation of client issues. All these CEOs could only notice the drop in sales but were oblivious to the larger problem.
In the Indian market, like any other, choosing the right channel partner and distributors is the key to success. Unfortunately, when you are new to a culture and reliant on local experts to navigate, you could end up being misled, especially in a shrewd business environment.
Here it is imperative to create a “distributor selection manual” which you and your team can refer to as you keep getting flooded with new inquiries in order to quickly sort out the noise. A brief questionnaire should be used to allow the Indian counterpart to elaborate on their abilities and for you to match those with your priorities. This keeps your failures and successes consistent – and also trackable.
When operating in cultures foreign to your own, it is important to streamline the processes of your organization so as to have a clear directive every time your employees come to work. This is critical in India as much as it is in many other countries.
• Signing a major partner While this might be the primary strategy of some companies, many are focusing on the tailored needs of SMEs in India. As long as there is slow attrition of clientele and 25% growth rate per quarter, the strategy of catering to small and medium enterprises works well. The biggest barrier to scalable success with SMEs is their high churn rate and limited ability of start-ups to customize a product to their needs.
Track records of some of the most successful Israeli companies in India and abroad prove that in order to build clientele, it is imperative to find a large company in the target market that can carry you through, unless your company has deep pockets to take early-stage losses for a few years. A larger player can not only open the market systematically from region to region but also help you develop the product for the local market.
The major issue with riding on the coattails of a large enterprise is that they are in a position of power and have many smaller companies from all over the world competing for their attention. It’s important here to consider if the problem you are solving in the organization is at a VP level or above. If you’re servicing priorities below that level, the probability of finding traction for companies past the tedious POC/pilot stage is historically poor. It is critical to solve a high-priority problem which has been identified by the leadership and which you can then quantify before considering teaming up with a big company. This creates a measurable value by which both parties can assess progress of the partnership and showcases a clear downside to the leadership (aka the ultimate decision-makers) if the larger company refuses to move ahead.
I have tried here to filter some of the major stumbling blocks I have experienced personally through my consultations for companies headed to India.
The opportunity of the Indian market has never been brighter than it is now, although the road to success continues to be fraught with challenges. I hope this offers some insight into the strategies of creating success in the Indian market and I would love to hear back from readers about their experiences.
The writer works with Israeli tech companies headed to and operating in India, helping set up projects throughout the country. He was born in Mumbai and moved with his wife to Jerusalem three years ago.