Freshworks' Journey to India’s First SaaS IPO

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Growth Story is a weekly podcast that breaks down the strategy and tactics utilized by high growth companies, in a short case study format hosted by Scott D. Clary (@scottdclary)

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Welcome to success story, the mostuseful podcast in the world. I'm your host, Scott D clary. Thesuccess story podcast is part of the hub spot podcast network. The hub spotpodcast network has incredible podcast like the Martec Podcast, hosted by Benjamin Shapiro.Each week the Martech podcast tells stories of world class marketers who use technology tocreate lasting success with their business and their careers. If you like any ofthese topics, you're going to like the MARTYCH podcast. How Science is changingadvertising, how to set up a crm so you actually use it. Privateequities take on digital transformation by big social is focused on newsletters. If theseare topics that resonate with you, go check out the MARTECH podcast wherever youget your podcast, or you can also go listen on hub spotcom slash podcastnetwork. Today I'm going to speak to you about fresh works. This isa business case study. So we're going to speak about how fresh works becamethe first Indians Sass Unicorn over billion dollar valuation. We're going to speak abouthow they became the first Indians Sass Ipoh...

...when they ipoed on the NASDAC justthis September. We're going to speak about the origin story, how they cameup some of the strategy, how they competed in a red ocean and ablue ocean simultaneously, how they compete it against Zendesk and sales force and howthey leverage both of those companies against themselves. We're also going to speak about theirproduct suite. We're going to speak about some of the guerrilla marketing methodsthey use and also how they were so successful to the point where they wentpublic they achieved a twelve point two billion dollar valuation on their first day oftrading. This is a fresh works case study. This is fresh works growthstory, so let's get right into it. Fresh works journey to becoming India's firstSASS IPO. So fresh works, formerly fresh desk, has long beenthe leading light in India's SASS industry.

It was India's first Sass Unicorn,ushering in an entire new wave of SASS firms as they became India's SASS superpower. Since last year, the Indian software as a service sector has been developingat a breakneck pace, but fresh works NASDAC public offering has pushed things tothe next level. The company, which creates customer engagement software for businesses,was valued at twelve point two billion dollars after its stock open, twenty onepercent higher than it's initial offering price at thirty six dollars per share. Buthow did it all start? So fresh works, which is founded in twothousand and ten by the current chief executive officer, gearish Methrough Bootham, andthe current chief technology officer, Shan Krishnamis, delivers business software to fiftyzero clients inover a hundred forty countries. Fresh works provides over eleven products, aswell as an aipowered software as a service platform to improve customer experiences, increasedstaff efficiency and enable a developer and partner...

...ecosystem. Fresh works began with asingle product, fresh desk, aimed at the customer support software industry. Toquote Ramish Ravish Shank car, fresh work senior director of marketing, we wantedto make a platform that combined assistance with businesses social networks, for example.So fresh desk allows clients to connect facebook pages and twitter accounts into their healthdesk and manages them from there. It also enables them to communicate with consumersvia WHATSAPP to address issues. More swiftly. More traditional customer care capabilities like livechat and the conversation of support communications into trackable tickets that help desk canhandle. Our complemented by these functionalities. So fresh service is a cloud basedit service desk software that assists with tickets submitted through email, a self serveportal, phone, chat or in person.

That was introduced in two thousand andfourteen. Fresh works became the umbrella name for current and new goods twoyears later. After the creators then also introduced fresh sales. So fresh worksproduct sweet is position as offering marketing, support and sales for the whole customerexperience, from acquisition through to relationship termination. It provides cloud as software organizations withup to five thousand workers and also utilize the software as a service productsto manage its operations. So fresh works conducts up to over Fourzero Marketing andadvertising initiatives each year, accounting for around seventy percent of the company's income.This is also reflected in its recurring revenue growth, which is surpassing over twohundred million in Arr in just that was in two thousand and nineteen when Igot those last stats. So this is going to be even even greater.But how did they get to well well over two hundred million arr twelve pointtwo billion dollar valuation? What's the strategy?...

So fresh desk was the company's firstcustomer service software. Fresh service in two thousand and fourteen, fresh salesin two thousand and sixteen, fresh team in two thousand and seventeen, andnow a comprehensive suite of enterprise solutions that captures a whole customer life cycle haveall been released. So let's figure out how they got to the point wherethey could even launch these products. So first, creating a blueprint for thered ocean market. So all these services, customer service, marketing, automation,it support and so on, have significant markets of their own. Sogresh focus on how to identify Red Ocean markets and developed the strategy to performeffectively in red oceans. In Blue Oceans markets, the firm would need aspecialized sales staff to educate clients on why they need a product that's very differentfrom a red ocean and the Red Ocean there's already a define market. Thatdoes not require as much discovery people get when you're selling, but it doesrequire significant effort and money to stand out. There were approximately six hundred help deskproducts on the market when fresh desk...

...launched, creating a deep red oceanindustry. Fresh desk also was able to tryumph thanks to the ease of theproduct, as well as solids execution and very pleasing uiux. This helped itstraffic grow and they have pretty much stained it over the years. If youactually look at their data, they have an enormous amount of organic traffic hittingtheir website and this coupled. So they have a strong organic strategy. Butthey don't ignore that you have to have an organic and a paid so theyhave over four thousand, like I said, four thousand marketing and advertising activities.They also have a very strong SEO strategy, which drives traffic to theirsite. So it's a combination of both organic and paid that is making themstand out in a very crowded market place. But all the marketing in the worlddoesn't matter unless you execute. So they continuously execute like their execution continuouslyoutperforms their competition. So what does that actually look like? Well, becauseof execution against their marketing strategy and some...

...other things that I'll speak about ina second, fresh works went from one million in a rr to a hundredmillion Arr in only five years. This is a pace of growth that ison par with the greatest stass businesses in the world. To get to thispoint, you need some unusual marketing methods and you have to execute against them. This is not run of the mill growth. So to fight against establishedcompanies like Zen desk and sales force, fresh works generated online content, butalso use some guerrilla marketing methods. So they did every traditional marketing play inthe book, but there were some things that really made them stand out.So fresh works was mentioned amongst wellknown firms like Zendesk as part of the ripoff or not campaign. So the Zendes CEO labeled fresh desk as a ripoffon twitter because of the word desk in both titles, obviously very similar,as like the very similar products and companies.

Instead of retaliating on twitter, freshdesk launched the ripoff or not campaign, which proudly displayed the zendesks CEOS accusationand encourage users to make up their own mind. Fresh desk received PRalongside Zendsk as a result of this, thus putting it on the same levelas the industry leader and they use. They cleverly used the competitors insalt asa way to gain awareness of their company. Fresh works also gate crash dream force. So sales forces largest event, one of the largest software events inthe world in two thousand and eighteen, by taking to the sky with aHashtag fails force blimp that circled sales force tower throughout the week long event.The goal was to persuade customers not to pay for bloated software like sales force. GEARIS describes how fresh works focuses on online client acquisition and, obviously,how this is aided the company's worldwide expansion using local talent. But they definitelyhaven't been reserved in their marketing. So...

...they promote themselves as the leading helpdesk provider. The first result for Zendsk versus fresh desk, because they killedit at Seo, is, quote, fresh desk versus the others. Seewho's the number one help desk tool. So they not only kill Seo sothat even when you're searching for a competitor, your preferred article is popping up,they're also crashing sales force. They're also leveraging other companies, trashing themand using that to get additional publicity. So they're great at traditional marketing.They're also great at these really obscure guerrilla marketing strategies. And the last thingthey did, well, not the last thing. Did a lot of greatstuff, but that one of the last things they did that I'm going totalk about today, is they created solutions for disadvantage SMB's. So fresh workwas able to acquire market share by catering to the long tail small businesses,not just in India but throughout the world. So even though the help desk industrywas incredibly competitive, the SMB market...

...was a little bit of a BlueOcean. Existing solutions were either too difficult to complex or too expensive for smallbusinesses to use. So instead of elephant hunting or whale hunting going after bigenterprise, which all the global players were focusing on, and concentrating on freshdesk, or actually gearish refers to it as deer or rabbit hunting. SoSMB's account for half of fresh desks or the company's revenue, with the remaindercoming from mid market and corporate customers. So it is well reflected in howwell ellaborates the other apps to create an ecosystem works well with other SMB productsas priced so that smbs can afford it, and that makes half of the revenue. So fresh works easy to navigate, website, straightforward pricing, intuitive design, ease of configuration, all of which are important for any product tofind acceptance by SMB's, also helped it acquire traction. So after they capturedsmb something that no one else was going...

...for. That, along with theirmarketing, along with their ability to effectively also go after a red ocean marketand then ultimately build out a product suite that complemented what their customers were lookingfor. Is How they want. Three main reasons, just takeaways. Colesnose. To wrap up, taking advantage of the situation, fresh works pickeda booming market and was able to outperform the competition in terms of product executionand design. Taking advantage of their assets, fresh works establish its unique approach totarget the long tail of smbs rather than following the worldwide SASS model ofsales driven development, and also focusing on those enterprise whale customers. And lastly, getting a chance to play in the major leagues early on in its journeyby distinguishing and generating noise. Through creative PR methods guerrilla marketing, it wasable to place itself amongst market leaders like Zendesk and sales force. Fresh worksalways had the goal of expanding internationally,...

...which entailed learning about market dynamics,category landscape and geographic peculiarities before entering a new country or area. In twothousand and nineteen, fresh works became the first Indian SASS business to reach abillion dollar valuation. Fresh works was preparing for an initial public offering for twothousand and twenty one with the NAZAC listing. The last round before the IPOs ofthe PRE IPO deal was entirely meant on establishing the company's worth and establishinga benchmark for how much fresh works could be valued at in the IPO.And then, finally, on September twenty two, two thousand and twenty one, the shares began trading on the NAZAC global select market under the Ticker Frshand the initial IPO price was set at thirty six dollars per share, easilyachieving Unicorn status and claiming the title as the first Indian SASS company to notonly reach a Billion Dollar Valuation but to also IPO.

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