The Freshworks journey from zero to $100 million

June 2011.

I first saw Girish Mathrubootham* in June 2011 at a pitch competition in Bengaluru.

A master storyteller though

But Mathrubootham himself was remarkable—a master storyteller.

Mathrubootham started his presentation by saying how he left his well-paying corporate job at Zoho and plunged into entrepreneurship despite having a family with two small kids to support. He spoke about how a casual comment on HackerNews had sparked off an urge to do something of his own. He didn’t speak about any “grand vision” to change the world and simply narrated a compelling personal story.

There were two facets of his story that I still remember fondly.

He quoted a famous punchline from Superstar Rajinikanth that had both the audience and the judges in splits and nodding in appreciation.

He also spoke about how he had to sell his family sedan and trade it in for a small hatchback as he moved from a cushy corporate job to a grueling startup stint. The image of this hulk of a man driving a Maruti 800, with his wife and two children in tow, threw up an incongruous but evocative visual.

The judges of that contest named him the winner of the $40,000 prize.

June 2019.

Mathrubootham no longer drives a Maruti.

He is the owner of a fleet of luxury cars. The crowning glory, a top-end Maybach. One of those formidable beasts that you can’t resist unabashedly gawking at as it passes you by.

Even so, two things haven’t changed.

License Plate 

One, the Maybach’s license plate bears the number 8055—a numeric representation for the word BOSS—a moniker for Rajinikanth used by his fans.

And two, Mathrubootham still continues to be a master storyteller. A skill that he has leveraged to take his company on a transformational journey that mirrors his own from a Maruti to a Maybach.

Freshdesk is now called Freshworks, expanding from a single help-desk product to a full suite of enterprise solutions. From six customers in 2011, the company now services a clientele of over 150,000 businesses across more than 120 countries. From a team strength of four, Freshworks now has over two thousand employees. With total funding of $250 million and a valuation of $1.5 billion, Freshworks became India’s first SaaS unicorn in August 2018.

Impressively, Freshworks has grown from $1 million in ARR (annual recurring revenue) to $100 Million ARR in just five years and two months. As the graph below demonstrates, this is a rate of growth that matches those of the best SaaS startups globally.

Ken caught up with Girish Mathrubootham to understand the drivers behind this impressive growth.

From blue oceans to red oceans
So what did Freshworks do differently/better to cross the $100m ARR and $1 billion valuation milestones?

Conventional startup lore would prescribe that the route to being a successful startup is to find a solution to an unsolved problem, a blue ocean.

Mathrubootham, instead, chose a “red ocean” market—an existing market crowded with multiple vendors jostling for space and attention.

How does this make sense?

While a blue ocean market opportunity might seem tempting in that there are no competitive threats, it might not be as appealing as it might appear at first glance.

What with customers having diverse needs rather than common pain points. The cost of delivering a solution that solves this problem may not make economic sense.

Most importantly, winning such markets often requires evangelical marketing where the customer base needs to be “educated” about the solution—an expensive and time-consuming proposition at the best of times.

 

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