On Tuesday afternoon Chennai based startup Freshworks (previously known as Freshdesk) achieved an important milestone, but the milestone though was cheered by all it did not evoke any big surprises among the industry people. After all, Freshworks elevation to the coveted unicorn club was a forgone conclusion. The eight year old SAAS startup, which was roughly valued around $800 Mn during last fund raising, breached the one billion dollar market cap on Tuesday after raising $100 Mn from several high profile investors.
With this special article, we are trying to celebrate the Freshworks’ latest achievement. It is important to celebrate Freshworks’ achievement because it depicts the classic story of an underdog. An underdog that fought every great adversity gallantly and eventually made it into echelon of high and mighty.
We hope that this special article serves an inspiration for many startup entrepreneurs, some of who may be right now fighting a great adversity to make sure that their startup stays afloat.
Girish Mathrubootham: the unassuming guy who dared to follow his heart
Admittedly, Girish Mathrubootham had to fight many complex issues during his childhood and adolescence days. His big face with intruding eyes and over weigh body was once subject of cruel jokes. But those insensitive jokes, which can potentially prove fatal for the self-esteem of any grown up kid, taught Mathrubootham the much needed survival lessons during his growing up days. These survival lessons in a way helped this unassuming and not-so handsome guy to overcome the adversities that were later waiting to knock on his entrepreneurial journey.
But Mathrubootham sowed the seeds of his entrepreneurial success in a true sense while working as an employee at software firm Zoho Corporation. As VP of Product Management, he had led many successful teams and built several well appreciated products to promote Zoho’s ManageEngine brand.
Mathrubootham was enjoying a cozy corporate job and had all the reasons not to even think of venturing into unknown terrain of entrepreneurship. But all that changed on one fine day. A day that with all due regards should be termed as a day of ‘great enlightenment’ for Mathrubootham. Mathrubootham on this pivotal day was surfing a website Hackernews.com when he accidentally bumped into comment section of an article that was about Zendesk, a well-known customer service software company.
In the comment section, he saw a compliant where an unhappy customer complained about price rise in Zendesk’s products. Mathrubootham later claimed this comment was like a brutal slap on his face and a clear hint that this was an opportunity sitting right in front of him. This was the moment when he decided to throw his hat in the ring and made absolutely definite mind to start his own firm. A firm that would operate on SaaS technology to penetrate the customer support market.
What followed next was days of sleepless nights?
One of the unusual traits of entrepreneurs is that most of them are insomniacs. Even if they are not initially, the pressures of entrepreneurship slowly makes them into one. Mathrubootham got this insomniac lessons way too soon, when the sheer excitement to start a new company did not allow him to sleep for several nights. These were the sleepless nights when Mathrubootham gobbled up every piece of information on net about how to start and run a SaaS customer service software company. He even read a great deal on entrepreneurship and inspiring stories about successful entrepreneurs.
However, this mission was been pursued secretly as Mathrubootham did not share about his forthcoming plan with anyone – not even his wife. Somewhere deep within this aspiring entrepreneur was also fighting several demons: the lure of an easy corporate job vs hardship entailed by entrepreneurship. The creeping insecurities about how to pay his EMis, his kids’ school fees and home expenses were certainly not easy to overcome.
And Mathrubootham finally quit his cozy job
It was on October 2010 that Mathrubootham finally decided to take a huge leap of faith as he put down his papers to venture into the world of entrepreneurship. Joining him in this soul searching journey was Shah Krishnasamy, who was an ex-employee of Zoho and is today co-founder and CTO of Freshworks.
By this time name of the company was already zeroed in and domain name was also booked. It was Freshdesk, which last year was re-branded into Freshworks.
The core team of six members had also taken shape, which also included Mathrubootham and Shah. The other team members compromised of 3 developers, 1 UI/UX designer and 1 QA.
So the journey to the unknown began
With a small team of six employees, Freshworks began its journey in a small unassuming Chennai apartment. Expectedly, those early days were marked by uncertainties and hiccups with great amount of sacrifices and perseverance.
The company’s cash burn rate was quite meager, around $5K for a six member team. The entire team was working for around 30-50% of their market salary, with Mathrubootham himself choosing not to draw any salary during the initial months.
With a very small team at the helm, Mathrubootham was also forced to dabble into other tasks that were completely alien to him; HR, finance and several small administrative works.
In other words, Mathrubootham had to become jack of all trades to successfully run and raise his new baby.
Challenge of finding a perfect market fit product
Freshwork’s obviously had to find a perfect SaaS based customer service product to fetch worthy clients. In order to create a perfect product, Freshwork’s spoke with several clients and did a grueling market research. The outcome and results proved to be great eye opener for Mathrubootham and his entire team. Some of these eye-opening results were as follows:
- Customers were least interested in fancy features like supporting customers from their Facebook wall or converting tweets; they were only interested in solving their core problems.
- Customers did not wanted to cope with separate invoices for their helpdesk, contact management software or customer feedback forums. All customers wanted only one invoice and as much functionality as possible in CRM solution.
Based on these findings, Freshworks created a product that gave more stress on multiple support email and support for the SLAs. This also meant postponing the integration of Twitter and Facebook in to the product.
Freshworks achieves market traction and also reputation
A good market fit product helped Freshworks to gain good customers very early on. The more important thing was that the company did not failed to capitalize on these early gains. In other words, its first CRM product was a big hit among the initial clients, which helped in gaining a much needed mouth of word publicity across the industry.
This initial goodwill was further leveraged as Freshworks managed to keep all its clients happy, eventually paving way to increase the list of its customer base as the years went by.
From serving small companies during the initial years, big and well-known companies like Cisco, Honda, Toshiba, Avast and Lenskart become part of its client in later years.
Freshwork’s awe inspiring journey in facts and figures
- In June 2011 Freshworks emerges victorious in the Microsoft BizSpark Startup challenge, which fetched the startup a whopping $40,000 prize money.
- In December 2011 Accel Partners becomes the first VC firm to invest in Freshworks; invests $1 million.
- In 2012, raises second investment worth $5 million from both Tiger Global and existing investor
- Freshworks raises third round of investment worth $7 million from existing investors
- Freshdesk launches its second product, Freshservice
- Google Capital seals first foreign investment in India by investing $31M in Fresh works
- Crosses 30,000 customers worldwide in October 2014
- Enters the U.K market in January 2015
- Raises Series E round worth $50 Mn in April 2015
- Enters the Australian market in April 2015 by opening brand new office in Sydney
- Makes first ever acquisition in August 2015 by acquiring video chat and co-browsing platform 1CLICK.io
- Opens office in Berlin in 2016
- Raises Series F funding worth $55 Million in November 2016
- Freshdesk Inc officially becomes Freshworks Inc in June 2017