It’s not every day that you hear an Indian company get listed on US stock exchanges. With just a dozen-plus Indian companies trading in these exchanges, history was made yet again as a young Indian company joined this elite list of select companies.
On the 22nd of September in 2021, Freshworks made its IPO debut on the stock exchange, NASDAQ. This was the first time an Indian product company in the SaaS space was making a debut. But how did this happen, and where did it all start? Stay with me as I take you back to 2010.
The Story Behind Freshworks
Girish Mathrubootham, or G, as he’s famously called at Freshworks, took a decision in 2010 that would shape his life forever. He left his stable job at Zoho Corp from being a VP of Product Management to start his own startup without a solid plan.
As fear loomed in his head because of financial commitments and the lack of stability, he thought of a personal experience that once left him frustrated.
In 2009, he had an unfortunate incident while moving from Austin, Texas, to Chennai, India. While he had his luggage shipped from the US, he noticed that his TV had broken and needed a fix. Because he had already insured it, he thought a simple phone call to the customer support team would do, but he was in for a surprise.
Despite waiting more than five months with several interactions over email and phone, he realised his efforts were in vain. So, he decided to share this incident on an online forum, where it got massive engagement.
Pretty soon, he was refunded for his broken TV along with an apology from the company’s president, but this moment gave him an idea for a problem he knew all too well.
This experience and an article he read on Hacker News propelled him forward. The article discussed Zendesk raising its prices from 60% to 300%. A user’s comment on how this could be a vast potential market for a company to set the right prices and take all their customers away lit another light bulb. That was how his idea to create help desk software started.
From researching existing companies in the space to choosing an about-to-expire domain name called “freshdesk.com,” he realised he still needed help to carry this dream forward.
That’s when the hunt for a co-founder started. G knew he needed a techie with versatile experience and one he could depend on. So, he reached out to his long-time colleague, Shanmugam Krishnasamy, to start alongside him, who, to his surprise, joined him immediately.
The duo started working during the nights and weekends to make their dream a reality, but they knew quickly that it wouldn’t work without taking the jump. So, in October 2010, they finally resigned from their jobs and officially started working at the company with a team of six people.
A New Beginning: Freshworks or Freshdesk?
Girish is no stranger to technology. Having created four help desk software earlier in his career, he was aware of the vast gaps in these tools. Traditionally, such software accompanies email and phones to enable customer support, but at the start of the decade, Internet users were already using social media and community forums to communicate.
With this “fresh” idea in mind, he started Freshdesk in 2010, a help desk software that combined traditional and social media channels. The company would bear Freshdesk until it officially rebranded itself as Freshworks in 2016.
Starting with a team of six people, Freshworks grew in scale over a decade to over 5000 employees today. So how did a minor pain point make Freshworks grow from a single product to more than five products and grow a customer base of more than 60000? The answer lies in its strong fundamentals: vision and kudumba ( family and culture).
How did Freshworks Become So Successful?
Girish knew first-hand what an employee’s aspirations are like. Since he grew up in a challenging environment himself, he ensured to provide employees with the best working experience by focusing on Freshworks’ core values.
1. Culture
Freshworks cuts right to the chase. Without a pompous mission or vision statement, it clearly states that it aims to delight customers and employees.
In an interview once, Girish stated that he wanted all Freshworks’ employees to own a BMW car. While it was a metaphor for freedom of living, his vision also showed that he deeply cared for the Freshworks employees and ensured they were highly committed, happy, and compensated fairly.
Freshworks also takes diversity and inclusion seriously, with the onus on women and underrepresented groups. The company has about 35% of its workforce as women and plans to increase this number to 40% in the near future.
Source: FC Madras
Freshworks also supports the sports scene rigorously. It started FC Madras in 2017, a football club for teenagers from 13-15. Girish has personally invested Rs. 100 crores to run the club for its existing cohort of 55 children.
Through initiatives like these, Freshworks captures the kudumba spirit and gives its employees purpose and meaning in their daily lives.
2. Vision
With a valuation projected at $26.8 billion by 2032, the help desk software market is expected to boom. But banking on a single product wasn’t Freshworks’ strategy. So, in 2014, they released their second product, Freshservice, an IT Service Management solution.
In two years, they released their third product, Freshsales, one of today’s most popular CRM solutions. Consequently, the company released other products such as Freshchat, Frehsmarkter, and more through acquisitions and development.
At a restaurant once in 2017, Girish was asked if he intended to make money from Freshworks as it was already successful. He disregarded the notion as his idea was to put India on the global stage
This was the very same year that he intended to go public. He symbolically represented Freshworks going public in a presentation on one of the annual employee days, Refresh.
Fast forward to 2021, his vision not only put India on the map as an emerging SaaS destination but made several of his employees crorepatis!
This continuous vision has led to Freshworks’ growth until now and will continue to do so as it steps into the second quarter of 2023.
3. Growth
Source: SaaStr
Very few companies have shown consistent growth since their inception. However, Freshworks is one company that has been showing its strength in terms of revenue. Even during the last few disruptive years of covid, Freshworks has grown tremendously year on year. The latest records show a 33-34% YOY growth for 2022.
What’s more interesting is the last quarter ending in 2022, when net losses reduced from a whopping $107.4 million to $57.8 million. As SaaS companies generally suffer losses for the initial years until they make profits, Freshworks is arching close to it, showing signs of sustainability.
However, as macroeconomic pressure makes the company take tough decisions, Freshworks is staying cautious this year but optimistic as they have a strong technology set.
So, how did Freshworks continue to sustain growth when most SaaS companies aren’t able to? Enter their marketing strategy.
What Exactly Does Freshworks Do to Grow?
Source: Freshworks
Put simply, product-led growth.
Freshworks has mastered its craft in honing products that work well for customers and employees. This is measured by the first 100 people who worked at Freshworks. More than half of the company was in engineering, followed by sales and marketing.
By focusing more on the products, Freshworks used its engineering power to lead the growth and scale its business through engineering first and a sales-and-marketing approach later.
Freshworks uses an inbound marketing approach for its leads. It generates organic and paid traffic for its products through highly optimised SEO and paid campaigns.
Potential customers try out the product through a free trial, and Freshworks has its sales teams assist their experience throughout the trial. They convert leads into customers through their highly qualified sales pipeline by engaging in product-led demos and sales queries.
A significant chunk of this quality control comes from the in-house marketing team. They specialise in content marketing and social media strategies that make potential customers aware of Freshworks’ suite of products.
Once again, Freshworks shows how solid marketing is necessary even if you have a product-led growth approach. By focusing on engaging and educational content, Freshworks attracts its leads to take action.
Freshworks – The Behemoth We Know Today
By marking its name on NASDAQ, Freshworks has set a new record and showed why India is indeed the next global SaaS capital.
As a company that focuses on people, society, and overall holistic values, Freshworks continues to change its environment to serve people in the future.
There are very few companies that leave a legacy behind, but without a doubt, the footprint that Freshworks has left behind continues to inspire hundreds of SaaS startups today and will continue to inspire hundreds more.
Companies of the future can take a note or two from Freshworks’ story – to start small but dream big, as it once did.