Allaying your Buyer Concerns to win the First Big Logo
Diadem Early days
Hriday Biyani, CEO and Co-Founder of Diadem Technologies Pvt. Ltd. started as an individual in 1998 doing small website projects and custom built hardware deployment along with web hosting services. With multiple customer interactions, he realized that the market for web hosting and development services was growing faster than other IT services. He figured out that the way to grow was to sell into large businesses and corporates. He realized that he was young and a bit inexperienced in doing so and he tied up with a Chandigarh based startup who were also providing similar services and were looking for partners to grow their business.
Since his partner company published ads in leading IT and mainstream magazines & newspapers, they were able to get leads pouring in from corporates in Kolkata and he used to visit them and get many of them signed on for their hosting and web development services.
After the dotcom bust in late 2000, he finally decided to part ways with the other company and decided to do it alone along with his brother Tushar Biyani. Tushar comes in with lots of experience in process and back office skills and he began managing the admin, finance and legal compliances side of the business. They had a handful of clients from their previous relationship and that was a base for them to get started.
Having figured out that Web hosting services has a great recurring revenue model potential, he realized early on the importance of keeping his clients satisfied and delivering beyond their expectations. There were just a handful of web hosting providers in 1998 and very few people in India even knew how to register a domain name and to host their website online. This was a very early market. Many of his hardware customers had asked him if he can set up their website which was a great leading indicator to the business and Diadem soon became a reliable provider for hosting solutions and the position was further consolidated when he began acquiring smaller web hosting companies in the local market.
Initial Clients acquisition
Running a startup with no big marketing budgets, his biggest challenge was in winning the trust of his initial clients and in retaining their business. They worked with their clients as their business partners for success and reduced the resistance with free evaluations, money back offers, free migrations & transfers and also provided their clients with suggestions and inputs, thereby making Diadem an integral part of their organisation, rather than just a vendor-customer relationship that could easily be replaced.
Since he had known quite a few of his potential buyers, it was a bit easy for him to reach out to them and to evangelize the new web hosting services as a concept. Hriday recalls that one of his major orders was through a web development partner based in Bangalore with whom he initially did INR 5000 worth of business and which transformed into a turnover of INR 60 lacs per annum in a couple of years! This helped him catapult Diadem position into the big league of hosting providers in the country and also gave the team, the required confidence to take on complex and demanding requirements of their clients and deploy them successfully on their network.
First Big Customer Acquisition
Hriday talks about one of his big customer acquisition in his early days. One prospecting large customer came in after they heard about a new company doing well after acquiring a few small hosting companies They had spoken on the phone a few times. The interest levels were high and Hriday realized that this is a qualified lead and went all the way to Bangalore from Kolkata only to meet them face to face to give top level commitment to the buyer. Technically, there was a perfect fit between what the need was and what Diadem could offer. The buyer somehow was not convinced in-spite of the credentials because this was a small company. So he chose a market leader and did his hosting there. After a couple of months, the buyer was not happy and he began exploring another provider and Diadem came back in the mix. Having been bitten once, Hriday straight went into finding out what happened last time that led to the loss of business. He found that the biggest problem the buyer had was the uncertainty in Diadem supporting them consistently for a while. So Hriday began spending time in allaying that concerns instead of selling the technology behind the hosting which he did the previous time. Finally, Hriday got the client to a point where the condition was a support period of 3 months to test the consistency of service levels and money will be paid after that. Hriday wanted this client because this would be a good reference client and his first big logo. He had to toy with the biggest risk in his career, they were not even making INR 10 Lakh in annual profits when the outflow to up the service levels to match the expectations of this client was by itself INR 10 Lakhs. So deep was his commitment towards meeting this requirement, that he knew that he will be able to convince his customer and he also felt that if he was not able to do this, he shouldn’t be in this business and bit the bullet. He drew the SLAs in the contract that he will get paid upon reaching those levels and invested the money. He got the client after 3 months and they still continue to be with him for several years and that won him lot more large logos and clients.
Hridays initial reach out was through Yellow pages where he found a list of phone numbers/address of his customers and sent mailers to his local clients. He also did cold calling to create awareness and went to meet them for closing deals. He also went and met each and every prospect in the initial days just to get a feel of what the clients were wanting and also to create a goodwill in the local market.
Segments and Focus
The focus has always been the small and mid-sized companies who are under served but didn’t have the technical manpower nor financial resources to work with larger IT outfits. So, even though they grew their revenues over 10x from when he started off in 2003, they still feel like a startup and everyday there is an opportunity to pivot their business with a new innovation.
One thing he could have done better
Hriday feels that he could could have grown even more if he had worked on the following areas:
- Invested in online and offline marketing through websites, social media, trade fairs and conferences.
- Developed more internal resources to enable him to take on more complex hosting solutions and services.
Hridays Advice to Entrepreneurs
- Don’t spread yourself too thin and focus on a niche to grow with and become a dominant player.
- Try to improve and innovate on one aspect of your business processes each day. This will have a significant impact on your business over the long term.
Diadem still operates at the same level of passion as they did when they started. They have over 1000+ satisfied globally dispersed clients and an YOY revenue increase of 25%. They are one of India’s leading IAAS and managed Cloud provider and have their network located in South Asia’s first Uptime Certified TIER IV DC hosting facility in Mumbai, India.