It’s still very early days to talk about a Freshdesk IPO: Girish Mathrubootham
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Bengaluru: The idea that large companies cannot be built by only selling to small businesses is based on conventional wisdom, believes Girish Mathrubootham, chief executive officer and founder of Freshdesk Inc. In an interview, he insists that there is a lot more growth potential in small and medium businesses than large enterprises. “A lot more smarter products” is what the future holds, he says. Edited excerpts:
Where do you see the most growth for Freshdesk coming from?
There isn’t one particular area. Each product will have its own trajectory. Freshsales is still new, so it will grow in the coming months; we are already seeing a very good response. The idea is not to look at each one of these products in isolation. Having the CRM (Freshsales) and support (through help-desk products) together would be great. That is the whole idea behind launching the products that we did.
Do you think you can continue to build Freshdesk at a global scale by catering to small businesses alone?
The statement that large companies cannot be built by only selling to small businesses is based on conventional wisdom. Ten years ago, this may have been true, as getting clients meant having a large sales force and investing in building relationships with clients. Because of this, reaching out to small businesses was not a viable proposition. Small businesses also did not have a lot of money to spend upfront. Whereas, enterprises had the budget, and the traditional sales approach prevailed.
When you sell to enterprises, you are looking at million-dollar accounts with each customer, whereas with small businesses, it takes hundreds of accounts to get to that figure. But because of the emergence of SaaS (software as a service) as a model, inbound marketing (where companies looking for solutions find Freshdesk by searching on the Internet) and being able to sell these solutions irrespective of where you are based, we are able to cater to the long tail of small businesses, at scale. Add the fact that we are doing this from India also gives us an advantage.
Will we see you target the large enterprise segment as well?
We generally target medium enterprises, but we are happy to work with large enterprises if they want to work with us.
The typical road map for a SaaS company would be targeting the US first, then Europe, Asia after that, and then doing an initial public offering (IPO). What is Freshdesk’s trajectory going to be?
I think, from a revenue trajectory, it’s not different. This is in one sense a hedge against the point that you are making that we can’t sell to small businesses alone. There is a lot more growth in SMB (small and medium business) SaaS and it is poised to overtake enterprise SaaS, according to a report. An IPO is definitely the desired outcome, but it’s still very early days to talk about that.
You have added around 300 people to your workforce in the past year. You are also adding people to your top management. How are you managing?
We will continue to invest in adding more people. We don’t go by the number of people alone, but we hire according to product planning and requirement. We strongly felt the need to build strong leadership as we were going through this phenomenal growth. I have never run a sales team. What we had so far was product-driven marketing and product-driven growth. So, we got in Nishant Rao as the chief operations officer to handle the go-to-market. We faced the same thing with engineering as well. We never had an engineering manager. Our architects also took on the engineering manager’s role, but we realized that for an architect, however people-friendly they are, that’s not their strength. So, Accel Partners conducted an event called SmartMove where there were people with rich experience and alumni of schools like Stanford and Wharton. All the Accel companies could pitch to them. That’s where, after a wide search, we hired our senior vice-president of engineering, S.T.S. Prasad, from. He brings wide start-up experience as well as experience at very large companies.
Going ahead, what is the road map for Freshdesk?
We will have a lot more smarter products. We are seeing enterprise software move away from a form-based, rules-based world to a new kind of smarter system. We are trying to build this kind of intelligence into our products.
We are also thinking that chatbots would be really big in the future. Although this won’t change overnight, if you think about this from the customer standpoint, this is based on a broader bet as millennials really hate talking on the phone and waiting for a long time to get help. They would much rather chat. From 2010 through 2013, Twitter rose as a very dominant channel. In 2016, Twitter’s relevance is going down slightly. Customers use Twitter to express disappointment, or get revenge for bad service. If they can chat with customer representatives right away, they are less likely to engage in such behaviour. That is why you don’t see companies fearing Twitter outrage now, as much as they would have a year or two ago. This is just one example of how chat can help customer support agents; they can do a lot more. These are two areas where you can expect to see more from us.
What keeps you going as the CEO?
What I focus on are first principles and craftsmanship. We want to kind of create a desire in the customer’s mind, and customer support agents should want to use Freshdesk. I am a product guy at heart. Sometimes, at the end of a long day, after running meeting after meeting, I schedule a product meeting to energize myself and only then go home.
What would you say has been your biggest mistake, and the learning from it?
I wouldn’t say it was a mistake, but we realized that it’s important to invest early on in people communication, and people practices. Until last month, we did not have an HR manager at all. The learning was when you are adding a lot of people, especially those who are coming from different companies, there needs to be a clear focus on communication. As a start-up, you don’t really worry about career paths and leave policies, and we hadn’t too. But it got so that employees weren’t ever sure if they could take leave when they really needed to.