The year 2016 will be a year for scaling up, according to Girish Mathrubootham, CEO of Freshdesk Inc. The San Francisco- and Chennai-based provider of SaaS-based customer support platform for enterprises also intends to set up its first European base. In an interview with Techcircle.in, Girish Mathrubootham shares his plans for Freshdesk. Edited excerpts:
What is Freshdesk’s game plan for 2016?
While 2013 was the startup year, the years 2014 and 2015 could well be termed as our high growth years. In that order, the year 2016 will probably be our scaling year. We are very strong in the SMB (small and medium business) segment. Our next step is to capture the global mid-market space, while retaining our dominance over the SMB segment and our sales and marketing efforts will also align with this objective.
Are you going into newer geographies?
We are already expanding our Chennai office and for the time being, have no plans to set up offices anywhere else in India. We are all set to open our first office in Europe within the next couple of quarters. We have zeroed in on three locations — Barcelona, Dublin and Berlin. Our first office in Europe will be in one of these three locations.
You are present in more than 120 markets and have over 50,000 customers. Does it also entail an increase in your management bandwidth?
We are expanding no doubt, but increasing the bandwidth is not happening only at the management level. There is smart hiring happening across all levels. We recently hired Linkedln country chief Nishant Rao as our chief operating officer. We are looking for a HR head as well as a vice president of engineering. Our geographical expansions will also be complemented with a dedicated leadership.
How important is the Indian market for Freshdesk?
India is probably our sixth largest market today. A number of larger Indian companies are increasingly trying out our products. Acquiring bigger customers is easier for us in India. India is a favourable market in terms of bagging the bigger deals, probably due to awareness about Freshdesk’s association with the country.
You have raised $94 million till date. How have you used it so far?
We raised most of our money not because we needed it, but because it made good business sense to make use of the funds that was available on good terms. Bulk of the raised funds has been predominantly used in research and development (R&D) for core product development, new product development and marketing. If you consider our flagship product Freshdesk alone, a lot of R&D has gone into the various support channels. We also made a few acquisitions. Around 75 per cent of the funds are still lying in the bank untouched.
How important are acquisitions for your growth story?
In the Indian startup ecosystem, acquisitions do not really translate into a revenue growth and is mostly a talent and technology acquisition. While do not have a grand plan for acquisitions, we are on the constant lookout for smart teams that have the right cultural fit. We also make sure that our acquirees have a product or technology which cannot be developed overnight. Our acquisitions address different case scenarios.
Sometimes, the technology is merged into our product. In another instances, a part of the technology is merged with our product while the team develops a new product. With Konotor, for instance, the product will emerge as something totally new from the Freshdesk stable. In all the case scenarios, the entities as well the team are merged with Freshdesk.
Are you looking for new acquisitions?
We have made three acquisitions earlier and have just completed a fourth. An announcement in this regard will be made in the next couple of weeks.
How static is the SaaS space vis-à-vis the preparedness to adopt innovations in the space?
Traditionally, the B2B space is a slow mover when it comes to adopting changes. Businesses generally wait for a technology to evolve before making their next move. But when they move, it is complete.
You had once said that Freshdesk is, in the words of Paul Graham, a high growth startup. What exactly did you mean by that?
The definition of startup is rather skewed today. A startup is not defined by the number of employees, but rather by the culture and the agility to react to changes. To take a classic example, Google, despite being so big is still a startup in many ways. The really successful startups go through this phase of hyper growth, which can be frustrating but at the same time a ripe ground for learning. We started off with six customers and today we have crossed 50,000 customers.
When terms like ‘unicorn’ are thrown at you, how do you feel?
Unicorn is no longer a sexy statement to make. In fact, we don’t even prefer to be called that. It’s more important to understand what real growth is. The parameters should be getting more customers, more revenue and whether these twin objectives are achieved through a sustainable manner. Are we able to scale up our culture with growth? Becoming a private unicorn is no big deal while the challenge is to become a public unicorn.
So much is happening in the consumer internet sector today. Has Freshdesk ever thought about that space?
We will just stick to what we know and do best. We do not have any plans of venturing into the B2C space.
What do you think about the startup policy announced recently by the Indian government?
It is commendable that the government has recognised startups as a separate category. I think some good thought has gone into what constitutes a technology startup. Proposals including self-certification, exemption of labour laws and tax holidays for three years are definitely the positive highlights of the policy.
Most of the things related to RBI have been left unaddressed. For instance, a SaaS company collecting payments from international customers using credit card through an Indian payment gateway is still not possible. Likewise, receiving funding from angel investors based out of the country is another issue that I thought should have been addressed.
What is your take on net neutrality?
I am definitely not a fan of Free Basics. I am a big supporter of net neutrality and believe that the internet should be kept open for all. Any move to create a walled garden is ill-advised and the government should not allow that.