Are emerging Indian electronics design companies too short-sighted?

One of the great things to have happened in India in recent years is the mobility of workforce in and out of India.  For Indian electronics design companies, managers, and engineers, this has resulted in exposure to potential customers in the USA and Europe (the ‘West’).   However, it seems many Indian entrepreneurs in the tech sector forget some of the basics of how to win new customers – and how in the west the process is different to winning customers in India.

In recent months, I met a handful of companies in India asking a simple question: “I want you to give me customers in the UK or Europe”.  While this is a valid request, I am often left wondering whether any thought has been given to how these customers would be won. A lot of groundwork needs to be done before this point has been reached where a potential customer or prospect is ready to sign up.

For example, when a Western start-up or growing/emerging company asks that question, it is typically part of a multi-faceted strategy, consisting of a combination of: develop the product, win new customers and partners, and obtain investment for marketing, product development and further growth.

To get new customers, partners, and investors, these companies understand the need to generate some element of credibility in order to get a foot in the door of the potential customer, partner or investor. Customers won’t buy unless they feel comfortable that the product is either tested in the market or someone has done some proof of concept work. They will also want to know that the company has some pedigree and is not some fly-by-night start-up. They will want assurances of on-time delivery.

Partners want to know and be assured that they will not lose their market reputation by having an association with you. They want to be sure that any customers they refer will be treated in the same professional way.  And investors are looking for a company with traction in the market.

So coming back to the Indian tech companies I have talked to, on the surface it does seem that they want the end product before doing any groundwork.

A potential customer needs to know about you and your track record before they will even consider saying, “Yes we would like to buy your services”. In order to win new customers in the West, Indian companies also need to have a unique selling point that gives potential customers something they can’t get already with their current partners and contractors. Some Indian companies still seem to be attacking the market on the basis of providing services available from any number of Indian companies; why would a Western company that has investors and shareholders to answer to, risk their reputation by handing a contract to a small design services company when the same is available say from an established division of a reputed global company like Wipro or HCL?

There is no doubt that Indian electronics design services companies have been making inroads into Western customers. Many of these successes have resulted from being able to provide outsourced design services at lower cost.  But while design services might be lower cost in India, the price differential appears to have been decreasing in recent times with what Western companies sometimes perceive as better quality of work produced from Eastern European operations.