Freshworks is a $600,000,00+ ARR global public SaaS leader — that had a humble beginning in the small town of Chennai, India. Founder and CEO Girish Mathrubootham shares with SaaStr five big bets that paid off as he scaled this multi-product company.
Keep reading to discover Mathrubootham’s key decisions in launching and scaling a company, which include:
- Betting on inbound while going global
- Hiring talent when talent is hard to find
- Going multi-product early on
- Layering a sales-led motion on top of a product-led motion
- Betting on AI and the future before it arrives
As Employee Number One, Mathrubootham knows what it’s like to hustle. He believes happiness is contagious and that there are no leaders in software who aren’t multi-product.
Let’s dive into the five big bets he made that paid off for Freshworks and ignore the 100 bets that didn’t.
Big Bet #1: Cast Your Net Wide — Bet On Inbound While Going Global
Freshworks was founded in October 2010 in Chennai, India. Most startup founders are either pirates or romantics, and Mathrubootham was foolish enough to believe they could start in that small suburb while building a global software company.
From day one, he was committed to going global. He had seven customers from four continents, the first from Australia.
In hindsight, the biggest lesson was to go after a bigger market to increase your chances of success rather than getting stuck in a niche market.
Cast your net wide.
As A Startup Founder, You Want To Break The Rules
In the early days of Freshworks, they won a Microsoft BizSpark India Startup Challenge that meant they took home $40k of free cash.
It was the oxygen supply for a bootstrapped company.
The total capital at the time was $85k. Instead of adding that cash to extend runway, Mathrubootham spent $45k over the next two months figuring out which online channel would scale for them.
Why did he do this?
Because they’d made the decision to go global and inbound from day one.
At the end of that $45k spend, they had 70 customers, which was great for a startup. It helped them get funding in the first round.
To splurge and not be efficient paid off.
Big Bet #2: Find Tomorrow’s Great Anglers — Hire Talent With A Learning Mindset
In 2010 and 2011, San Francisco was the place for SaaS talent. So, what do you do when starting a company in Chennai, India?
At the time, there was very little “been there, done that” talent or the willingness to join a startup that’s probably raised a million dollars.
It wasn’t easy, and they couldn’t find talent.
So, what was the big bet for Freshworks?
To seek out younger talent with a learning mindset.
At the time, people told the Freshworks team to move to Bangalore or Silicon Valley. But they decided to build a company and be successful from where they were.
The Secret Sauce For Hiring When Talent Is Hard To Find
Instead of focusing on hiring someone based on skills, which can be taught, or knowledge, which can also be taught, they zeroed in on innate talent or life skills that people are born with.
Freshworks bet on the inherent talent in employees, even if they didn’t have experience.
For context, Mathrubootham shares that everyone in India gets an engineering degree and then figures out what to do with life.
So, if he wanted to hire customer support, it could be a biomechanical engineer. Instead of hiring for skill, he focused more on core traits like empathy, patience, and being detail-oriented.
In pre-sales, they looked for people who could think on their feet, adjust based on audience skill level, and could teach you something.
Freshworks programming language was Ruby on Rails until the 69th employee. They didn’t hire a single person who knew Ruby on Rails because they could learn it after being hired.
You may not be able to attract all the talent you want, and you have to learn to work within the constraints that you have.
Big Bet #3: Fish In Different Oceans — Go Multi-Product Early On
A lot of times, when people look at Freshworks, they don’t understand the true differentiation of it.
Its business model of going global and going inbound from India is the differentiation.
They’re spending a lot on online marketing and acquisitions and servicing all those leads from a low-cost place like India.
Sales cost was 20% of CAC, and marketing was 80%.
Mathrubootham always wanted to build a multi-product company and booked 40 domains when starting Freshworks in 2010.
Freshdesk was launched in 2011 as its first product, and its second product was released in 2014, with faster growth than the first.
They released many more products, with Freddy AI in 2018 and, as of last month, launched the Freshworks Customer Service Suite, which is an omni-channel for B2C to engage with customers on Instagram and other places.
Why is this important?
Because, as a founder, you have to be planning ahead.
What you do in product today will help you in revenue 2-3 years down the line.
Once you have product market fit in the first product and revenue is coming in, that’s when you’ll have time to invest in a second product.
As a founder, you should be thinking beyond every quarter. Instead, ask yourself how the company will look three months or three years down the line if things go well.
Big Bet #4: Go After Bigger Fish — Overlay Field Motion Over Inbound
People often assume inbound is all SMB, but one of the things Freshworks realized early on is that you can close larger deals with inbound.
As early as 2013-14, Freshworks closed Burger King, 3M, Schneider Electric, Pearson, and Sony, and they all came inbound.
The average SMB customer would buy 4-5 seats of Freshdesk.
Burger King was 300 seats.
They closed several customers with hundreds of seats, all from Chennai over the phone… This was ten years before COVID in terms of selling remotely.
Once they realized they could take the product to more mid-market and Enterprise, they overlaid a field sales motion on top of the inbound motion that was already working.
Having two go-to-market motions is tough, but if you want faster growth, you have to do it.
Understand The Power Of Inbound
In 2015-16, Freshworks did PR, saying they had Cisco as their 30,000th customer. It wasn’t an Enterprise license across Cisco, but one team buying for them.
That PR caught the eye of Proctor & Gamble, who came to them wanting to evaluate.
Inbound isn’t just about SMB customers.
They had a product working well in these larger companies, and often, what started as a 25, 50, or 100-seat deal expanded into several hundred seats.
So, they decided to overlay a field sales motion and go after larger customers.
Big Bet #5: Know Where The Fish Will Be — Bet On AI and C360 Early On
How do you know where the fish will be, and how do you stay ahead of the curve?
In 2016-17, the Freshworks team asked themselves: What could kill us?
AI was the biggest threat.
They weren’t looking at competition as the threat, but AI was, so they invested early and launched Freddy AI early.
As a founder, you have to know what’s coming. What can kill you, and what’s changing in the landscape?
Freshworks also took a big bet on Customer360 because AI is only as good as the underlying data.
It’s not just the big bets that happen, but also a little bit of luck.
All Publicity Is Good Publicity
When Freshworks was really young in 2011, they had 200 SMB customers and had just announced $1M funding.
The next day, they were attacked on Twitter as a ripoff of Zendesk.
Sometimes. as a startup, you get a stroke of luck.
During this moment, when they were fighting on Twitter and exposing what was happening, the whole internet community stood behind them, and the story was trending for 30 hours on Hacker News.
It all worked in Freshwork’s favor.
If you’re small, it’s not about the size of the dog in the fight. It’s about the fight in the dog.
So, all publicity is good publicity.
The big bets that paid off for Freshworks were:
- Going after a large market and casting a wide net when going global and betting on inbound.
- Having a hiring strategy focused on young people with a learning mindset and mapping their core talent to whatever job they’re doing.
- Going multi-product early on.
- Overlaying a field sales motion because a product is working well in larger companies.
- Staying ahead and thinking ahead to what the next big opportunity could be or what could kill the company, and being ready for that.