Published on Tech in Asia.
There are two schools of thought in entrepreneurship: the first is to leave a market alone if it’s dominated by a major company. The second says to find the pain points those customers face and innovate on them to create a better product.
Girish Mathrubootham, founder and CEO of Freshdesk, subscribes to the latter. The customers that exist in these markets already have established behaviors, he explains. It’s easier to understand what these buyers like – and you don’t end up wasting so much money on changing behavior.
“People generally go into a store to buy DVD players,” he explained earlier today at Tech in Asia Bangalore 2016. “But if they see a great Bose speaker system instead, they’ll think about it, and even end up buying it. That’s what happens when you enter a commoditized market and innovate on the product.”
“If a popular software already exists, there’s a good chance that millions around the world are looking for it online,” he added. “That means adwords are pretty high, and online SEO can bring you traffic. It gets people to come into your store.”
It’s a strategy close to Girish’s heart. Freshdesk is a cloud-based customer support software that entered the market in 2011. At that time, there was already a popular option that existed – Zendesk. It had been around for four years and had raised more than US$25 million across three rounds of funding.
There are, of course, dangers to this strategy – no established company will sit quietly while another gains traction off its buzz.
“If you look at Silicon Valley, there’s conventional wisdom around SaaS. I’m from a different school.”
When Zendesk’s CEO Mikkael Svane found out about the new entrant, he tweeted angrily at Freshdesk, claiming that the startup was a “freaking rip-off.” One of Mikkael’s followers replied to the tweet calling the Freshdesk team a group of “Indian cowboys”.
That launched a saga that Girish recounts with relish. Their answer was a site called Ripoff Or Not, which presented the tweets alongside a plea to Mikkael to let the market decide who should win the battle.
Freshdesk’s argument was so strong that media sites – namely, Gawker – picked it up. In an article titled “How to go thermonuclear in a Twitter fight” Gawker placed the tally at Freshdesk 1, Zendesk 0.
“Never attack a small guy who’s got nothing to lose,” laughs Girish.
Freshdesk has offices across the globe, from San Bruno to London, but its main office is still in Girish’s hometown, the bustling city of Chennai. It wasn’t an easy place to start out of.
“At first, it was a challenge,” he admits. “Unlike Bangalore, you don’t get giant plug-and-play offices. We spent money furnishing our offices with carpets and ceilings.”
“VCs would say – hey, we’ll come and visit Freshdesk, and the day before I’d get an email telling me that they couldn’t come. I understood, though. It was tough to come out all the way to Chennai at that time just to meet a single startup with no ecosystem there.”
Girish even had prospective employees turn down offers just because of its location – he recounts the tale of a Yahoo designer who decided to work with a Bangalore company instead.
Chennai is no longer that little no-name town. Today – partially due to Girish’s work – it’s starting to become the hub of India’s SaaS scene. And according to Girish, that designer from Yahoo is now working at Freshdesk in Chennai.
He uses his victory to create a blueprint for others based out of India that want to create a global SaaS product.
“If you look at Silicon Valley, there’s established conventional wisdom around SaaS,” Girish says. “Build a product, hire more salespeople, go to the USA, then go to Europe, go to Asia, eventually do a billion dollar IPO. Salesforce, HubSpot, and Marketo have all done it. It’s happened before.”
“But I’m from a different school,” he continues. “Building a product is not very expensive in India because the cost of engineering is small in comparison to the USA. Understand your real strengths as an Indian startup and play into them.”
“If things don’t work out, you haven’t wasted a lot of money. You can try and experiment. If it flies, push more fuel into it. If it doesn’t, move on,” he says.
David vs Goliath
Girish explains that sticking to his decision to work out of Chennai helped him break new ground. It’s just one of his many contrarian decisions. He lists a few others.
When Freshdesk was bootstrapped, it won US$40,000 in a competition. In just two months, the startup had spent US$45,000 – the sum and more. Years later, it’s raised US$94 million across six rounds of funding from investors like Google Capital – but Girish claims to have touched little of that money.
Today, Freshdesk is trying to take on customer relationship management giant Salesforcewith the launch of its latest tool, Freshsales.
“My friends used to joke – all I want is everything,” he laughs.
But he explains that the magnitude of the challenge doesn’t distract him from the important things, like maintaining his startup’s culture as it scales.
“It’s important for us to stay grounded and build value,” he says. “Believe that it will grow. The simple lesson in life is you should deserve and then desire. We have to work much harder, and the status will come when it comes.”