Freshworks’ Hyper Growth Journey From 0 to IPO with Stacey Epstein

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Mountain biking down a hill, you don't look at the cliff, you don't look at the rock. You look at where you're going, right? And you focus on doing that in the best way possible. Because if you look at the cliff, you probably going to go down the cliff. If you look at the rock, you're probably going to hit the rock, right? It's the same thing with throwing a ball, right? You got to make sure you're pointing at where you want to go because if you point it somewhere else, that's where you're going to throw the ball. So I think for me, I just never focused on obstacles. I never spent any time thinking about, well, I'm a woman, I can't be a CEO. I just didn't and I don't know why. Maybe my parents taught me not to think that way, but I always just focused on performing and doing a really good job at whatever I was doing and not letting the obstacles deter me from what I wanted to. Don't look at the cliff or the rock. Look at where you're going and do an awesome job and the opportunities will will be there for you.

I need some traction. You need some traction. Let's get some traction.

Hey, what's up? Innovators, entrepreneurs, visionaries and disruptors. This is your Traction podcast host, Lloyd Lobo. We're a community of over 100,000 people just like yourself on a mission to help you get the methods, the money and the madness to explode your business growth. Featuring stories and tactical advice straight from those who've done it before, like Shopify, Twilio, Asana, and many more.

Welcome, Stacey.

Thank you. They all think you're the freshworks.

Yeah, I tell you, it's not me. I'm here to speak to Stacy who's pioneer the journey at Freshworks. Stacey, you have an extremely impressive resume. Global CMO of the Year, top 50 women in SaaS elected or voted to that position. You've been CEO of Jason Green funded company Jason Green from Emergence, one of the premier SaaS investors in the space, CEO of that company, now CMO of a global public company. Also, you've kicked butt on the soccer field, all conference soccer player and now kicking butt in the corporate world. Right. So I'm really looking forward to this discussion. You've written extensively about why you chose to go to freshworks, right? And it's the journey that they underwent and how they managed to get the team in place that got you excited about the opportunity. You could have gone anywhere. So please talk to us a little bit about what that journey was like, how they built that early team and got somebody like yourself interested to join them at the stage they were at.

Thank you. Thank you for the compliments. I'll start by maybe asking a question of the audience. How many of you heard of freshworks before today or you saw it on the agenda? Not that many, not that surprising. A lot of that is why I joined. So we were founded in Chennai, India a little over 10 years ago by a product manager who said there's gotta be a better way to build customer service software that's more focused on the journey of the user or the agent, the person that's trying to solve the problems. And he started a company called freshdesk and really plg, before PLG was a thing, it was all based on just capturing demand. People are looking for something different, people are looking to solve problems. Kind of an SMB focused just inbound, get them in, get them into the trial, show them how easy it easy to use, cost effective, yet modern were the principles of the company that are still the principal today. And it was give the people what they want. If you build it, they will come. And they did. And so it was just build on that and built a really thriving business out of Chennai, India that no one really heard of because it was just a. I'm going to find it in Google search and it's, I'm going to start using it and good freemium model, good free trial model. But of course over time you have 100% plus year over year growth every year you add products, eventually Sequoia and Excel. Your backers say, dude, you got to move to, you gotta move to North America, to the Bay Area and put this thing on steroids. And that's what he did. Our founder Girish. So he moved to the Bay Area about three years ago from Chennai and really started building out an executive team there, really in prep to go public, but also to layer on an outbound motion and a direct sales force. The Last session was talking a little bit about when do you do that? When do you grow up market. And for me, I had been the first marketer at SuccessFactors and took that through the IPO. I had been the first marketer at ServiceMax and I had done a lot of that growth from 1 or 2 million through to a good liquidity event. I had never done the okay, start now at the ipo. I started six months before our IPO and grow it into a multi billion dollar revenue company. And I asked the question about our brand because I think still, given how big we are and you know, now a $4 or $5 billion public company still, unless you're in India where people like ask you for selfies because freshworks is like the favorite company around the rest of the world, people still don't know it. And so for me, the opportunity to build the brand and help get the word out about what freshworks is, the value. We are a multi product company. We are now really effectively selling not only to SMBs but also to mid market and enterprise. And so just an exciting new challenge.

For me and there's so much to unpack in there, so many insights that the founders and the audience can take away. So one that immediately comes to mind. In my previous gig I was CTO of a public company that was global in orientation, running a team. That's global, right? The challenging part is always middle of the day somewhere in the world and you've got teams all over. What does a typical day in the life look like? Like, how do you guys do planning? How do you guys run your meetings? How do you do one on ones? What have you come to learn about running an organization of this scale? And what does that typically look like for you?

Yeah, it's been a very big transition, especially for freshworks. And I was listening to the Atlassian conversation and of course the zapier, like always been remote. And that was not the case for freshworks. Freshworks had very much an in. We have, let's see, upwards of almost 4000 people in Chennai still. And people were going in the office every day, staying late. It was, that was who we were. And then the pandemic hit. And then throw in the fact that CEO moved to the Bay Area. We now have executives across the world. I came in during the pandemic, actually. Our cfo, our CRO, myself, we all started during the pandemic. Oh wow. Yeah. And it has not been easy. I think when you have that remote culture already and you can really endure the pandemic but everybody and India is a different place to be working from home. Not everybody has the same type of home. A lot of people have multi generational families living at home with them. Right. So you don't necessarily have reliable WI fi everywhere. So it we had a lot of those issues. Our offices are all back open and we're doing kind of a hybrid now. Then throw in it's 10:30 in the morning here, 11:00pm at night there. So the amount of time that you're like that US India it's like I go from 6am till about 10 and then most of my team is asleep. And that book ended. Day became hard too for everybody. They're like you can't sustain that. You can't get on at 6 and then be expected to get on again at 7pm until because you just, you, you're exhausted. So we had to put some rules in like we do morning meetings for North America, nighttime for India which they like to come in later. So some of those things that like keeps that the vibe going and just I think lots of one on ones and all hands and some of the other principles that companies like Atlassian had always done, we had to put it in place to keep it going.

And then as you're thinking about regional teams or local teams, do you try to divide it based on the team that's focus on a particular geography is that's the team that's going to do it and if so how do you get commonality across the organization? How do you keep that thread consistent across the org?

We are a multi product company, we have numerous products and we, we have a pretty BU or business unit centric model and as we incubate new products they almost start as like little independent startups and and because they've started that way there's usually a very strong cross functional team. So like product marketing is under me but the product marketing teams are very tightly organized as part of the business units. So the fresh desk team and the fresh service team and the fresh sales team, they all have their squad. And so we have this concept of teams like the product marketing team who has a product marketing leader who works for me but they also are part of their squad which is their business unit where they have shared goals and KPIs and they really and a lot of them are in one location together. So it helps to have that kind of a setup for us.

Got it. And advice for founders in the audience. Right. In the early days of companies you're focused maniacally on going from Zero to one. You've got one particular customer segment that you'll zero in on with one product and the goal is to get ideally to double digit millions in that product before you even start thinking about either a different customer segment, a different sales motion, a different geography. Freshworks more than pretty much most has decided to have multiple products in multiple segments with multiple kind of go to market motions. And it's these are not small segments. Right. You've got a hundred plus billion dollar competitors in some segments. In the REM side, for example, there's HR that's recently launched, IT services that's launched. Please walk me through or walk us through, what was the decision process there? How did you decide what product comes next and how do you build in the org to take that on and do this effectively and not give up captured ground, get too distracted, suffer because of gluttony, things like that?

Yeah. One of the other things that really attracted me to freshworks is this notion of building software and having a shared set of vision and principles about how you build software. And we joke on the marketing team, it started our CEO's broken TV story where he was moving and his TV broke and he couldn't get the moving company to do anything about it. But it wasn't because he built a relationship with the agent who was trying to help him. But the agent couldn't do anything about it because he didn't have the right school tools to help. G. His name's Girish, we call him G. And that's where he was like, there's got to be a better way that I can help these agents. And what that turned into was our really strong principle around the user. And I think a lot of big enterprise software companies focus on the buyer, right? Which might be the cfo, it might be the procurement guy, it might be the VP of the division who says, I need these broad, deep set of features. I've got my 45 page RFP and I want to make sure I've got the top right of the Gartner quadrant and that's how I make my buying decision. And all of us leaders are going to vote on which product we want. And meanwhile you got the agent who's please don't give me another piece of software that has 80 different fields just because you want to capture all that data. I just want to solve the problem. So having that view of what does the user need and we've stayed true to that and I think it's been a big part of our success is thinking about the user and not the buyer. And it especially works in smaller businesses and mid market businesses. Obviously as you're selling to enterprises, which we do now too, you are selling to a cio, so you have to straddle it. But I think our growth strategy has been more of a pull versus a push. We built Fresh Desk, which was for customer service. Then we found that a lot of companies IT teams were like, hey, this is a really awesome system. I'm gonna use that for my internal help desk too. And then they started asking for features that were unique to their need. And so we said, okay, let's build Fresh Service which is built for internal it. When you're selling customer service software, you're gonna naturally have the salespeople and the marketing people saying, I wanna, I'm marketing and selling to these same customers. I wanna know what's going on in the. The natural evolution to CRM. Our latest sort of incubator product is Fresh Team, which is hr, which is okay, I know who all my customers are and I know everything about them. Why couldn't I use that same model to know about my employees and have my good employee record? Hasn't necessarily been a hey, what's the next hot market? It's been more about what are our customers asking for as the next thing they want to see us build and they like the way we build products. So we get pulled in and in those directions.

Amazing. And speaking of product, most of, at least from what we see at Floodgate, most entrepreneurs either come up the product side of the house or the technology side of the house. Right. In a few cases you've got some go to market or salespeople. But marketing tends to be one of the things that you know and in some cases naively just assume that, look, take my vision and help me get leads and qualified leads that my salespeople can sell to. But it's also been said that marketing's too important to be left to the marketing team alone. So as given that you've been first marketing exec at several companies that have grown dramatically, how should founders think about that first marketing hire that first exec. How do you like tactically think about it and then strategically, what should a great marketer do when he or she gets involved in a company?

It is the most common question I get asked, I was just asked it last week and I do, I agree. I think a lot of times people are starting companies with a very strong product background and then they're like, oh, I think I need marketing for some reason. Tell Me what I what that should look like. And I usually like to turn that around to what are your overall, what do you think you need? What are your overall company goals and are you hitting them? There's no one single point in time where now is the time to have a cmo. Everybody gets there at a different time. I will say the sooner you can have a really great marketing leader, you should take a really great marketing leader because it absolutely propels the brand and the business forward from the get go. But I think to give a succinct answer here, it's usually more like a 30 minute conversation of lots of question asking questions. But there's a variety of things that marketing does. Does marketing, if you look at product marketing helps really craft the positioning and the messaging and the value proposition of who the company is. That's not really a marketing thing. That's something that as a founder you should be doing. But if you have a great partner, that's like listening to you and understanding and then turning that into okay, what are our differentiators? And really defining it and making sure the whole company's on board with it, making sure that everything you're telling the market or a reporter, it's like your partner in making that real for the company. And some founders don't need that partner. And if you don't need that partner, maybe you don't need a brand or product positioning oriented person. There's demand gen, right? There's I, my pipeline's not going fast enough. Maybe you're PLG and it's all happening in the product and maybe you just need a growth marketer, right? So maybe you don't need demand gen. But I think when you can really articulate what are your needs from the business, from your marketing team, that's when you go out and you find those people. Maybe right now all you really need is a great head of product marketing or maybe you need a great head of comms, or maybe you need a really amazing web experience team because you really want to automate that PLG customer journey. When you get to the point where you're like, you know what, I need all of those things, that's probably when you need a cmo.

Got it. And then in freshworks case, you guys started out as PLG and then eventually made the shift to going into more of a sales effort, direct sales, to get to customers. That's a transition that a lot of companies will have to make. Most companies these days are starting out bottoms up selling and Atlassian to some degree. Has taken that pretty much to the extreme, if you may, very successfully. How have you seen founders navigate that journey, or entrepreneurs or companies navigate that effectively to decide that look, now is the time to start bringing on essentially executives and org building the muscle that you may not intuitively have and you've not had thus far.

Yeah. And I think again, I think there's two ways that happens. If you look at a company like a salesforce, they really started as an SMB company. I remember when they started and people didn't believe in the cloud and so they could only sell to small companies because no big company would ever do that. But they made a very decided decision to move up market and now of course they're mostly up market. Right. They SMB is an afterthought for them. But that was like, that was something Benioff wanted to do. His Oracle heritage took him there. They built a direct sales force from day one. Also, PLG didn't exist then. Right. We were again more of the pull. So what started happening is we started realizing that when we would talk to mid market companies, they didn't necessarily want a trial as their first step in the journey because maybe they're a committee, they're not one person, maybe the person doing the research and figuring out which vendors isn't the person that would even do a trial. And so they were falling out for us. And so we realized, no, they want a sales cycle, they want a demo, they might want a customized demo, they want to engage with us a little bit more before they try the product. And so as we started seeing more of them coming to us, we started building those motions in response. And now we really have both. We have inbound plg, which for the most part is our SMB motion, and we have outbound direct sales, mid market and enterprise, which, you know, sometimes you get an enterprise coming through plg, sometimes you get an SMB that ends up with the sales team. And but for the most part, that's how it works for us. It's pretty successful.

You've done so much for women looking to rise into leadership positions into the C suite, into the CEO seat? On that end you've, you've successfully done it both as a CEO and a cmo. What advice would you give women early in their career who are, who have aspirations to rise into the CEO, cmo, other C level kind of roles in the org?

Second most common question I get, and again, a very, I think in retrospect on my own career, I've looked back at what did I Do and I don't know, do you mountain?

Try to stay upright as much as I can.

I understand the concept. If you're mountain biking down a hill, you don't look at the cliff, you don't look at the rock, you look at where you're going, right? And you focus on doing that in the best way possible. Because if you look at the cliff, you probably gonna go down the cliff. If you look at the rock, you're probably gonna hit the rock, right? It's the same thing with throwing a ball, right? You gotta make sure you're pointing it where you want to go because if you point it somewhere else, that's where you're gonna throw the ball. So I think for me, I just never focused on obstacles. I never spent any time thinking about, I'm a woman, I can't be a CEO. I just didn't. And I don't know why. Maybe my parents taught me not to think that way, but I always just focused on performing and doing a really good job at whatever I was doing and not letting the obstacles deter me from what I wanted to. Don't look at the cliff or the rock. Look at where you're going and do an awesome job and the opportunities will be there for you.

Right as it has been for you. So congratulations so far. Thank you, folks.

Thank you.

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