How to Build a Customer Centric Startup, with Leaders from Brex & Freshworks

¡Hola a todos!

Welcome to the Founder Institute event on building customer-centric startups featuring our partners at Brex and Freshworks. My name is Ryan Micheletti and I'm Head of Global Operations for the Founder Institute. As most of you know, the Founder Institute is the world's largest pre-seed startup accelerator. We operate our program in over 200 cities around the world. And over the last 12 years, we've created 5,000 startups that are part of our portfolio across these 200 cities with the largest mentor network in the world of 20,000 tech CEO-type mentors. So if you're a startup founder and you have global ambitions and would like to be backed by one of the largest startup organizations in the world, we have open admissions to our accelerator program across 100 different programs right now. And I'd like to give a special shout out to the Founder Institute Silicon Valley and Toronto programs where I'm a managing director and we help launch impactful and enduring startup companies. So today I am joined by two amazing leaders from Brex and Freshworks. We've got Lucas Fox, who's the head of relationship management at Brex, and Patty Ruffinam from Freshworks, who's the chief customer officer. And so before we jump into introductions, let me outline a very brief agenda for the call today. So first, we're gonna do live Q&A with Lucas and Pradeep. This is your time to get your very specific startup questions answered by some global leaders in the industry. And so it is a live event. At any point in time, you can go ahead and put your question into the chat, and we'll make sure that we get to your questions in the order that we receive them. Then towards the end of this event, both Brex and Freshworks have a free gift for everyone here who's participating in the webinar. Webinar today. And so we'll announce that towards the end of the event. And then finally, we always conclude these events with a networking session on Airmeet because, you know, since people are on lockdown and we have founders from all over the world joining us today, it's kind of hard to network in a virtual environment. So we want to create as many opportunities to do so as possible. So after the event, I'll put a link in the chat to go to the Airmeet room where you can do one-on-one speed networking with other founders, investors, and mentors. People who are on the call today, as well as joining tables where you can have group discussions with other founders as well. Last but not least, I would like to invite everyone to the Founder Showcase, which is an event that we're hosting tomorrow that features some of the top companies coming out of the Founder Institute program. We'll go ahead and put that invite into the chat for everyone here. So again, this is a live event. Since we have founders from all over the world, I would love to ask you to just kind of say hi in the chat, put where you're from. And again, if you have questions for Lucas or Pradeep, let us know and we'll get to it. So let's go ahead and get started with some speaker introductions. So Lucas, thank you for joining us. You're the head of relationship management at Brex, and you guys actually have some really exciting news with a pretty large fundraising round that you just closed, I think this week. Do you want to give us a quick introduction?

Yeah, thank you, Ryan. Thanks for the invite. And yes, yesterday we did disclose our Series D. We just raised a new round of $400 million in funding, and we're also now announcing our new product launch, which is a spend management software. But to give you a little bit of context of my background, I'm originally from Brazil, grew up in Brazil and Spain, went to college in the United Kingdom, originally started, uh, sort of college studying robotics, computer science, started a software company straight out of school and ran that for a few years. Uh, eventually met the two founders of Brex through a common circle of, uh, Brazilian entrepreneurs and we became friends. Then in 2017, the two founders asked me to join the company and I ended up investing in the company at the time and moving to the US 6 months after, in mid-2018, and joined Brex late 2018. And, you know, have worn 3 main hats at the company so far, very sort of different hats. I think what the, our founders wanted help with is essentially someone who could build different teams and help start things and move on to other sort of departments. And so I've helped build the recruiting and people department, that was sort of my first chapter of Brex. Then I launched our second product, Brex Cash, which is a cash management account, which competes with more traditional checking and savings accounts at traditional banks. And the third chapter of my story at Brex is being building a relationship management team over the last 10 months. We have a team of 10 people. We're likely going to scale to a team of 50 by the end of the year. So lots of scaling, fun stuff, and the team owns existing customer revenue. So we're responsible for everything that has to do with ramping customers, upselling, cross-selling, and retention. And we oversee the success of every single Brex customer. So that's a little bit of me and sort of what I do at Brex.

Awesome. Well, first of all, congratulations on the Series D. I mean, It's amazing how fast you have moved. I mean, I think Brex is only a couple of years old, right? 4 years old?

Correct.

So that's amazing. Nice work. And also we're very bullish on our Brazilian founders. We have, I think, about a dozen chapters in Brazil and counting. And so we're making lots of moves down there and it's great to hear your background there. So up next we have Patty. Patty is the Chief Customer Officer at Freshworks. Patty, do you wanna give a quick introduction?

Sure, thanks. Thanks, Ryan. Congratulations, Lucas, that's incredible set of accomplishments, you know, and so congrats on your new round of funding as well. So I'm Paddy, I am based in Seattle. I have been with Freshworks for just over a year through the acquisition of my company that I founded called AnswerIQ, which was essentially doing AI in for customer service, you know, with bots and deflection of tickets. So from 2017, I had raised a Series A here in Seattle, and then in 2020, you know, I got acquired as I was going through my Series B to a very exciting company, Freshworks, which is, you know, over $300 million in revenue with 50,000 customers. And at Freshworks, I basically run the entire post-customer interaction. So once a customer has been acquired, everything from onboarding and engaging with customers, customer success, customer support, and then the whole customer experience strategy, which is really taking the friction out of the equation all the way from acquisition to lifetime, right? And so my team oversees all of those. Prior to that, you know, I spent a decade running a company called Aditi Technologies, which is a very small company, you know, grew that to close to $100 million, and I sold that to to private equity and eventually got acquired by Samsung. And my roots, I came to Seattle in '99, but in '94 I joined Microsoft. And so I've been here at Microsoft in Seattle, although I've worked at Microsoft for over a decade in various roles, but I was a general manager running the partner ecosystem back in 2006. And so I have my roots between working in large companies, learning how to scale, how to build, And then, you know, working through product management, business development, sales, marketing, and then running a company for the last couple of decades, and now here running as a chief customer officer. I'm very excited to be here, part of this event, and happy to share my experiences.

Awesome. Well, thank you for joining. And, you know, Freshworks is a great partner. Your software is killer, and you guys have a really great deal for founders. And so, Both Freshworks and Brex have special deals that help early-stage founders launch their companies. I think Freshworks is giving away $10,000 in credit for the software. And then Brex, you've got, I think, 30,000 points when founders use your credit card to spend at least $1,000, which barely covers incorporation these days. So thank you both for joining. I'm really excited. And a lot of the questions— this event is really around building customer-centric startups, which I think is a fascinating topic. But both of you have a breadth of experience across, you know, building and scaling startups, and you could probably talk about other topics as well. So for people in the audience, when you have questions, put them in the chat, we'll get to them. But let's go ahead and get started. So I guess, and maybe Lucas, we'll start with you and go to you, Patty. So how would you define a customer-centric startup? Like, what is that as compared to like just a regular startup?

Um, in my opinion, a customer-centric startup is one that starts with what is the best customer experience and works backwards from that. Um, I think that's a, a very important way of approaching the way that you treat customers, is really thinking through who is your customer, put yourself in the shoes of your customers, and what is the the 10x experience for that customer? What is the best experience that that customer can have based on, you know, what your company serves? And essentially just doing everything that you can as an organization to work backwards from that. I think the concept of working backwards is very important to call out here. And one that I think Amazon, for example, does extremely well. There's actually a book that came out a couple months ago called Working Backwards, written by one of the chief of staffs of Jeff Bezos, that talks about sort of how they have this philosophy of working backwards. But I think it's really important to do that. Oftentimes when you're building a company, you have costs and you have your, you know, the ROI per customer and the LTV and the CAC, and you start you know, putting all of those things together and then you end up with a customer experience. I think it's very important to start with what's a great customer experience and work backwards from that. At a high level, can go into more detail if needed, but that's kind of my high-level thought.

Yeah, I love that concept of working backwards, and I also love the concept of thinking like, how is this— how can we 10x this? How is this 10 times better than what already exists? And that's actually something we, we tell our founders in the program, right? When you're going into these saturated markets where there's already fintech solutions, or there's already like software to manage, you know, customer pipelines, like how do you stand out from the rest? And frankly, the easy answer— and it's not easy to do— but the easy answer is, well, you have to be 10 times better than your competition, and that's going to pull people into, into you. And so like having that sort of customer-centric approach and working backwards is really important. Um, Patty, what about you? Like how would you define a customer-centric startup? Is there anything that you would want to add to what Lucas mentioned?

So I think Lucas mentioned some really good points, but if you ask a startup or if you ask any company, everyone's going to tell you, "We're a very customer-centric startup." No one's going to tell you, "I'm not a customer-centric startup," which is actually a parody because a lot of companies and startups especially, their single biggest issue is really around churn. If you really ask a lot of companies, "What happened? Why did your customers leave?" It stems from product. It stems from the fact that the experience that you deliver in your product is probably the one which you have to put most thought on, which is when you bring on a customer, most customers leave halfway through a process of onboarding or through at the end of the onboarding, can't get to the outcome. Customer-centric startups where the product founders and the engineering teams are obsessed about the experience that the product delivers, to get them to that success point, I think, is probably the one that basically separates the ones who really are winning big versus the others who are not. And it's very nuanced. It's easier said than done. The difficulty of that is really being in the shoes of the end user, trying to understand every click and trick that they have, taking the distractions away and getting them to an outcome, right? Outcomes are different for small businesses, outcomes are different for large businesses. So I do feel that it has to stem a lot from the product teams, the product management teams, and the product teams who really have to start thinking about owning that customer experience right up front that make them successful.

Yeah, those are really great points. And I think Jeff Bezos is pretty famous for putting the customer first, and that was like a big reason why Amazon was able to, beat other competitors and really scale. And so that's a really great point. And I guess my follow-on question to that is, you know, you can kind of infer like why being customer-centric matters. And even like, I think Sergey in the chat here said, well, shouldn't all startups be customer-centric? And like you said, it's easy to say yes, right? You should be. But there are those nuances. And so, you know, given your breadth of experience, have you seen any specific nuances that you think maybe a first-time founder or an early-stage founder should be on the lookout for, or maybe some best practices on being customer-centric?

Sure. You want to take that? I can take that. Yeah, so I really think that the area of focus should really be on the, you know, the trial to conversion and And then the continuity of like when you finish that conversion to be an experience that gets them to use the product in a way that's less cumbersome. And in the trial to conversion, I think is an interesting piece because customers are trying to essentially trying to understand the various, you know, in every piece of software, there's like plethora of features. The reality is there's only 5, to 10% of that features that's really useful for them, that they— that can get them to the outcomes that they want. But in every category that you build, everybody's building this breadth of like, oh, we got to compete and do these things. And so a big part of where I've seen companies succeed is, you know, they start small, you know, they really understand the core notion of like, hey, I don't need all of these bells and whistles. And eventually they build it because, you know, they have to cater to larger markets then, then. But once they understand the audience saying, hey, this is my ICP, this is the customer that I need to serve, and they build the core feature functionality in a simplistic way that really gets their customer to, you know, get into that point of success, are the ones I see winning more than others, right? And so I think that's, that's clearly a, you know, and you can see this across the breadth of companies, whether you use a product like Betterment or Robinhood or any of these, or in like all the consumer-style software experiences have come into all the B2B SaaS categories. And so, you know, I'm, I'm really excited to see that how that portion of that has changed and the companies that really do that initial piece really, really well, which is like understand the user and take them through that journey for success, are the ones who actually are, I see, doing better than others.

Yeah, that's really interesting. And, you know, one of the things that we kind of talk about is like, you know, there's sort of this like cornerstone functionality, as you said, it's like the, what's the feature that's, you know, used and it might represent 10 to 15% of the product suite, but like what's the one transaction that's most important to that user that gets them to really be interested in what you're doing. And sort of everything else is kind of built on top of that and accentuate that. Lucas, what are some of your thoughts?

I think what Pradeep is saying is very true. And I think the essence is when we think about product strategy, right? Sort of where your product direction is going, that is probably the highest leverage you know, job that you can have at a startup, which is likely the responsibility of the founder early on, right? I think that having a very clear product strategy and understanding your customer very well and understanding, you know, how you can actually be a loved product is number one, because, you know, a lot of startups don't even get to product-market fit, right? And so I think that step number one is you wanna make sure that you have a loved product. right? And then when you have a loved product and you launch, I think it's a, it's a separate set of difficulties of how you maintain a customer-focused organization, which is sort of like a good problem to have if you have product-market fit and you are growing very fast. But for that first stage, I think it's very important for, you know, founders to obsess about the customer. And I think something that I've seen that helps a lot is Just having a lot of empathy, like individuals that are highly empathetic, like from a core personality trait, tend to be better at understanding pain points. I think it's important to understand the sort of dichotomy between being an extremely brilliant technical engineer and having a very high degree of empathy. Because one can get in front of the other. And I've seen a lot of founders that are brilliant, but don't spike in empathy. And they might think they know the answer to a problem, but they just can't empathize with their end customer. And, um, so I think it's very important to have a little bit of self-awareness as a founder and as a team, as am I extremely empathetic as a human being? Because that will, that core personality trait will allow you to understand what your customer needs and to build something they want. I think that's the first stage. It's sort of pre-market fit, which might be more applicable to a lot of the participants here. I think the challenges of building a customer-centric organization post-product market fit are different and they're very interesting. And it's what we at Brex really sort of like juggle with on a daily basis. And I'm sure Pradeep too. But that's on the first stage, on like the more early stage product market fit.

Yeah, so you brought up a lot of really great ideas and points there, and maybe we could go there for a minute. Let's talk about product, this like sort of like mystical product market fit, and there's a lot of different definitions. There's quantitative product market fit, and so, you know, in your experience and just kind of in your own words, and we'll go Lucas first and then Patty, like, you know, What is product market fit for the founders here who don't know? And then like, what are some of the early indications, maybe on like the pre-seed side that you, you're like, fuck, you might have product market fit, or at least you're on the right path towards product market fit?

Yeah. I think the question of what is product market fit is a very good question. And I think what's important is to understand what frameworks you're using. Right. So I'll share a couple of the frameworks that I've used in the past. There's a really good framework around product-market fit that I personally really like, which is the Superhuman framework. I don't know here who's aware of Superhuman, their email console. Like they integrate to your Gmail account and it's an email, it's a competitor to Gmail, right? And there's a really famous article around the founder talking about sort of their approach to product-market fit. Essentially, it's a very simple questionnaire that you ask your customers a question, which is, you know, how disappointed would you be if this product didn't exist? And your customers respond to either extremely disappointed, somewhat disappointed, or not disappointed. And if over 40% of your customers say that they would be extremely disappointed, then that's a good signal, at least from a lot of the sort of research that we've done. And I think that there are other frameworks. There's sort of NPS, the Net Promoter Score, is a good, uh, way to gauge how your customers are feeling towards just the overall experience of, you know, the product. So I think those are two frameworks and sort of approaches that we've used to product market fit that allows you to gauge. I think there's also a way to go deeper where you can do this at a feature level, not only at a product level. So if you have a product, you have five features, you can actually gauge the product market fit of individual features and understand what exactly is the driver For example, I'll give an anecdotal example. When we launched the Brex card, I don't know how many people here understand what our product suite is, but the first product we launched was a credit card, okay? A corporate credit card. And we had one feature that was the number one driver for why people loved the product, right? Which was the ability for you, in the moment that you swiped your card and you were charged, you could take a picture of the receipt and upload it automatically to the system. And you didn't have to keep track of physical receipts, which is something that everybody who's an employee at a company hates doing. Right. And that was the number one promoter feature. That was, people just love that. So we identified that and we doubled down and built other similar sort of features that would delight customers. Um, and that became sort of, uh, one of the reasons why people loved our product. Right. So that's my short answer.

Great.

Yeah. So I really like the idea of kind of finding product-market fit within features. And I think, you know, you could kind of take that concept of building something someone loves and get to that micro level, but then expand it to the macro level as well. So that's really great. Patty, what about you? I mean, how would you define product-market fit? What are some signals from customers that might indicate whether or not you as a startup would have that product market fit?

I think this is one of the biggest challenges for a founder, right? If you really ask me, there's separating the noise from the signals, right? Because you have so many companies that are all the way to Series B who still don't have a product market fit. Just because, you know, customers pay you money, because you have a great sales, you know, founder or someone as a good salesperson does not necessarily mean— I think the idea in the subscription business is, you know, really being able to separate that noise from the signals by asking some very fundamental questions, right? Which is a lot of the companies start off by saying, hey, I'm going to give you this software for free, use this, I got a pilot, let's go and pilot with 15 customers. At that early, very early seed stage, you're seeing a lot of Founders go out and do that. And whereas it may be a set of nice-to-haves, right? So how do you separate like, hey, I love your software versus I love your software and I will pay for it, and then I actually pay for your software, right? When you separate those three, a lot of the customers in the initial cases of the pilots that the startup founders do eventually find a lot of them in the first bucket, which is I love your software, right? But I love the idea. which is really being able to like distill that and understand what problem are you solving. And so a lot of it comes down to, are you a feature in a category or are you a, you know, are you a player in a category that's solving a problem? And so when you go look down at a lot of the startups, one of the fundamental questions to ask is, hey, what's the category? What's this? Who's the buyer? What is the spend? And being able to understand, are you in that category, playing in that category, with a differentiated approach, or are you going there with a feature that— and eventually trying to like build into a certain category? I think it's a complex process. A lot of VCs get fooled into this, basically thinking that, hey, this thing is great because the founder is great or, you know, the team is great. And in a lot of ways that works out fine eventually because they pivot. But really the product-market fit is one where, you know, it takes tremendous amount of time, energy, understanding of the proposition, the value, the pricing, the buyer, and figuring out your entire go-to-market because you can get to someplace and then you just get stalled or you get to a place where you get enough money, but you're not able to really replicate that success at some point. So I would advocate to all the people listening to the webinar thinking that's the number one place to spend most of your time. If you're a startup, because you get that right, which is, do I really have a problem that I'm solving? Am I solving this in a differentiated way? You know, do I have understanding of the economics of the buyer, the buyer persona, their pain point, and the whole process of the buy? And then is that a simple friction-free way or frictionless way of really getting to that buyer and being able to solve for that problem? So that product-market fit actually encapsulates all of that. Because it's just not one ad, it's just having a great product isn't good enough, right? Because if the friction and the cost of sale is so high, then somehow, you know, product-market fit does not happen for you. You may be having a great product, but it doesn't fit because of economic dynamics. So it is a complex— it is definitely complex. And I do think that this is the area that I would advise founders to spend most of their time upfront in the first 6 months, 12 months, get it right. And they have to continuously strive to get it right. And sometimes it doesn't— it Takes several years to get that right.

Yeah, I 100% agree. I mean, it's really fascinating to kind of hear like product-market fit as like one component, right, of like this greater strategy. And one of the things that we see a lot is, you know, a founder may have a great idea for a product, but maybe the unit economics don't make sense, or maybe the go-to-market strategy is like really hard to execute, or maybe it's undifferentiated. And so that is, there are other risks outside of not having product-market fit, but I think the roadmap you laid out is great. So I actually have some questions here from the audience. So this one, I'll just quote directly. So one of the members says, I'm thinking about the old and misquoted Henry Ford quote, if we ask customers what they wanted, they would have said a faster horse. So what are some specific ways that you can ensure your customer feedback doesn't stymie the innovation plan for your business? And how can you balance like customer needs for business vision? So when do you, I guess, like, when do you not listen to your customer? And like, you know, maybe there's some other indications in that customer interview that could kind of be a hint towards the right path. So Lucas, let's start with you. What are your thoughts?

Yeah, this is a very good question. And I think ultimately it ties back to the product strategy question, which is, this is the hardest thing. This is the number one hardest thing for your startup, right? Which is, what product do you have to build, right? And how do you build that product? And I think that in order to build a great product, I mean, you need to have a fine balance between listening to what your customers want, but, More than that, it's understanding what problem you're solving. So a framework that I recommend using is the Jobs to Be Done framework. Okay. So when a customer has a problem, they might say, can you please build this integration?

Right.

I want you to build this integration because I have this problem. And sure, building an integration might be a way to solve that problem, but rather than building the integration, try to understand what job do you want done?

Right.

That's the framework, the jobs to be done. What is the job that that integration would do? What is the job that would solve for? And when you really understand the job to be done, you can understand that the solution might be to build an integration or it might be something completely different. Right. And so I think that if you really understand the jobs to be done behind a request, you can abstract away the approach. And the approach doesn't have to be what your customer's telling you. It's just, it has to solve the problem, right? So I'll give you an example. At Brex, a customer might say, I am using an expense management software, Expensify, and I have a Brex account and they don't work very well together. So I want, to integrate to Expensify, right? But when we dive deep into the pain point and what that would solve for, it's spend management, right? The customer wants to manage their spend and they're using an existing solution. And our approach is, is there something that we can build to our product that would solve for that, that would eliminate the need for you to have Brex and Expensify and Concur and bill.com and a bunch of different platforms. So we, the takeaway is the customer doesn't know that you can build a bank account and a credit card and a spend management software and an ERP integration, um, and then accounting software all in one, because that doesn't exist today. So the customer doesn't know, the customer's not going to ask for that. But if you look at the jobs to be done, that's what they want, right? That's what they need. They're operating in 5 different platforms. They're doing, you know, a bunch of work that is not in a single place. And what they actually want is just to build a better product that consolidates all of these different jobs to be done. And the customer didn't ask us to build this, but if you read between the lines, you can figure out, right? Sort of what to do to solve this problem. I think it's very important to have a very good gauge in the industry and understand sort of, you have to be in some way almost like a visionary and be able to think to yourself a couple of years ahead of its time. Time of where you think technology will be. And that's what I think founders do so well. That's sort of like the unique superpower that I think a lot of founders have. It's that vision of this is the world that I want to build, right? And so I think it's very important for you to have a fine line between listening to your customers, but really diving into what the job to be done is and having that innovator sort of like mindset, right? A really interesting book that I recommend that I really love is a book called Innovator's Dilemma. It's a book that talks about innovation and how industries like the one that was cited in the question of how horses became disrupted by cars, and how Uber, and how Google, Facebook disrupted the advertising industry, and many other examples. It talks about how several industries were disrupted over and over and over and over again over the last thousand years through the same framework. And it's a very interesting book that I recommend folks reading if you're interested in innovation.

Yeah, great suggestions there, uh, and those are— that's also a really great book as well, so I second that. Um, Patty, what about you? So I mean, when you're talking to customers and like they're, you know, they're saying they want the, the faster horse, right? Are there any signals or frameworks that you use to really extract out like what is it that, that they need And like, how do you go about thinking about that?

So this is another area where I find that most startups in the initial stages end up building a monolithic large product for some of their biggest customers, and they find themselves in a real difficult situation as they are trying to scale. Because the function of a good product manager, and I think this is where probably the difference between great product managers and average product managers show up, in being able to discern and distill the delta between, is this a one-time need or is this something that I can see across the industry that I should go build for? And the art of saying no is super important because if you don't learn to say that no upfront, I think you're gonna find yourself, because there's enough value that your product's probably delivering, but a lot of companies in that stage, they bring the success teams, they bring the product teams, and they end up saying yes to the customer for certain functionality that, causes them so much regression headaches in the future as they are trying to scale the business. The key question really to me is really about like, hey, what is this? Asking very basic question, what are you trying to do with this? And why are you trying to do this? And the more and more you ask the question to peel the onion to a point to understand, is this really— a core need, or is this something that is a nice-to-have or an aspirational thing that the customer is trying to ask for, right? And everybody's always going to position this as, this is very important, it's critical, I can't do this, I can't do without this feature, right? And that's what causes, you know, startups to— because start becoming inefficient because they start building for some of their top customers, and, you know, they can never really get out of that. And so my, my fundamental question to whether it says customer success lead or or whether it's a product lead, is to come in and ask some very, very basic questions saying, what are you trying to solve for? Is this something our current product cannot do for you? Is it just for the 3 extra steps that's causing you this burn and churn that you're asking us to build this? It's those types of questions. And then coming back and sitting together with the product and the engineering team, because engineering is super expensive. Once you go out and make that kind of a change, you're basically taking something off schedule and putting them into a different different direction. And then making that as an intelligent decision together as a team is going to be one of the things that I strongly encourage product teams in the startup stage to really sit down and do and be more discerning, be, you know, and be very, very decisive about the kinds of things that you want to build for scale versus, you know, for one-off scenario.

Yeah, some really good insights there. I have a great question here and I'll ask this to you, Pradeep, first, and then Lukas, I'll ask a second question after that to you. So what are— so Pura asked, what are some good ideas to keep communication flowing with your customers but without antagonizing them and annoying them?

This is a good question. Yeah, so I think the most important thing that customers really want to know from you is, is really from a communication flow, is, is exactly how you're getting them towards their outcome. In the journey of customer success, the most important thing is to understand that, you know, in a subscription business, you are there for the life. And in that life, there is an aspiration, a destination that customers want to go to in how they use their product versus how they would like to potentially use the product. And keeping them on path towards that direction and communicating the the incremental features, the incremental product updates that is helping them get to that destination is probably one of the most important things that, you know, good success teams would do. And that's what will keep your customer alive because essentially it's not about the monthly review and the weekly operational review with all of the customer teams and like, hey, thank you, that really matters. What really matters is Being able to understand at the core what is the outcome that the customer wants and how do you get them there. And you know that there's a gap in your product between the outcome that they want versus what you can deliver. And you know, there's a schedule and sometimes it takes 12 months, 18 months, 24 months. And just describing that to the customer in a way that this is a journey and then giving them incremental updates as and when those things happen are going to be critical for, as I see, as some of the most important points of light in a, in a good relationship building exercise with customers.

Yeah, I mean, I think that's brilliant. I mean, it's just, it's guiding them on the journey and helping them get to where they want to go and like figuring out what that is. Who wouldn't want to get to the destination, right? I wouldn't mind getting an email. So, so this question is for you, Lucas. So, um, this comes from Parush. In such a competitive space such as, uh, fintech SaaS, customer retention is a huge challenge. So how do you continually provide value to your customers if there's a blue ocean of competitors around you at all times?

Yeah, I think retention and churn is extremely important. I think Pradeep mentioned this when he started speaking. I think that there are a couple of things. The first one is it ultimately depends on the product that you're offering. So we keep going back to the same point, right? Around, you know, what is the product that you're offering and how does that differentiate compared to what's in the industry, right? I think it's very important to understand who are your competitors and are your competitors incumbents? Are your competitors startups? The way that I think about that is at least, you know, the B2B banking industry, for example, it's a huge market, it's an enormous market, right? There's something like, I don't know, over 50 banks in the US that have over a $10 billion market cap. So it's a huge market, right? And so my point is it's not a winner takes all, right? And so sometimes when you're thinking about, you know, churn, retention, competition, it's a big pie and it's not a winner takes all. That's very common in the fintech world. That's something that, for example, is not that true for advertising, right? If you look at advertising, it's a big pie, but it's Facebook, Google, and a few other players. And so I think financial services is different. And so that's the one thing. And if you're in financial services, your competitor will likely be an incumbent. You will also have startups that are copying what you know, you're doing and they're still eating at that big pie, but I think the way that I think about competition today is very different when I'm thinking about an incumbent like Bank of America, JP Morgan, American Express, compared to a more startup competitor, and I think that's something to take into consideration. How to prevent churn, I think is very, very specific to your business. I think it's very important to understand why do you have churn, right? Do you have churn because people don't like your product and they run into specific issues that leads to churn? Do you know what those— so what that path is? I think it's very important for you to be able to, again, empathize with your customer. Why are they churning? The question number one, if you have churn, is what is your churn rate? Can you answer that question? If not, I think there's some work to be done. Once you know how many customers are churning, do you know why? I think that's very important. You need to have a system in place and a process in place such that you can track that. You need to measure that. And reasons for churn might change, but if you are, you know, gathering feedback that the reason that people are churning is for a product reason, improve your product. If the reason why customers are churning is because there's a competitor that is offering the same product cheaper, rethink your pricing. I think it's important to understand churn and tackle it in a very, very unique way depending on your company. But step number 1 is understanding what, like, what is the churn? Why do I have the churn? Who is it churning towards? Is it to a startup? Is it to an incumbent? And I think those are the first questions that I would answer before diving into the specifics of, what to do.

Yeah, a lot of really great nuggets of wisdom there. So, so we do have a lot of questions here, and I'm looking at the clock, it's already 45 minutes in. So let me ask another question here. So Michelle asks, what are the most important metrics and questions to ask in customer discovery or development interviews? Patty, do you want to take that one?

Sure, sure. So I think every product has a proposition, right? And the proposition has an outcome that you want to eventually derive, and those outcomes can be translated either in financial outcomes, which is you want them to, you know, make more money, increase their revenue, sell more to existing customers, or possibly save time, be more productive, or what have you, right? And I think the discovery questions for a customer really are around The simplest one is, what are your pain points? It's a very, very broad question. It's very, very hard to understand, which is, I think, first thing is to really understand as you operate today and with whatever systems you're operating today, what are the areas that you are struggling with as it relates to time, cost, time, money, or any other attribute of productivity that you may see, right? Breaking down that as-is state very well and capturing that is the most important part. And in there, I think the best, best— the best interviewers are the ones who are the best listeners, right? They have— they craft the question into a really well-designed decision tree, right? Because, uh, you know, you basically think through in which way do you really analyze these questions that you can come to a framework that that is repeatable. And that is the— that's, that's the beauty of like sitting down with the, with the business analyst and the product team as— and the customer success teams to really build that type of a scenario. And it's not very different from what you do in a pre-sale scenario. If you really look at what happens in most pre-sales, pre-sales interview questions, it's really around the exploration and really understanding that pain point. But in the, you know, in the discovery scenario, you can actually break down a lot more with the current system, the pain point. What do they integrate with? What do they use? You know, where do they feel the pain? Who else feels the pain? Where does this— who do you report this to? You know, what does it matter? You know, if— who does it matter to? It's questions like that. Eventually you understand even the decision tree chain, right? And so, um, it's a, it's a little nuanced. I'm sorry I can't give you like a crisp answer, but like I said, it's, it's really about understanding the current state of everything that's happening with the current operational system, and also understanding the decision tree and the key influencers in the decision tree as you do that discovery to say, who do you serve? Because if your software is going to be displaced tomorrow, who is going to drive— I'm sorry, I don't have a mute button for my dog.

No worries. Yeah, those are good points as well. And I guess, Lucas, over to you, like, What, you know, what are there any like tactics that work really well when you're interviewing customers? Like, have you found like there's like either some killer questions or like ways to structure it or ways to think about doing that customer interview?

Yeah, for sure. I think the first, it starts with the report. I think that's very important. I feel something that we've done that has been very successful is people that we hire into, you know, customer success, sales, is just hire people that are extremely likable, people that you can put in front of anyone and they will befriend that person because they're smiling and they're charismatic and they can, you know, research about the customer enough to bring something that they will want to talk about. And you want to get the customer speaking. You want to flatter the customer. You want to tell the customer that you research about them XYZ, and you want to learn more about that. And you want to get the customer talking to you as if they were your friends, right? There are customers, and maybe this happens 10% of the time, that they just want to cut down to business and they're going to be like, okay, yeah, let's do this. And then you cut down to business and you're very direct. But I think that the majority will allow for the room to build a lot of rapport. And that's very important because We found through our studies that that helps, you know, close deals faster, that helps discovery, that gets the customer talking, right? So step number 1 is even before you think about discovery, just make the customer like you as a person, as a human being, right? There's small little things that you can do that are like tactical. You put like a picture of your dog in your Zoom interview, when the person, in your Zoom background, when the person hops on the call, they're gonna smile. They're going to say like, oh, you have a dog. Like nobody doesn't like dogs. Like dogs, right? And so you can do tactical things like that to get people in the mindset of like, yes, I'm working, but I'm interacting with a human being and I'm just gonna have a little bit of a good time, right? And then I think around discovery, Pradeep said everything. I feel like the only thing is ask open-ended questions. Don't ask yes or no questions. Ask questions that will get the customer to speak without a bias. You never wanna ask a question that will lead the customer to respond in a certain way, right? You wanna ask an open-ended, unbiased question that will get the customer talking, and then you go deeper from there. And I think the most important thing is documenting a lot of this information. It's what Pradeep said. It's, I don't know if you have a CRM or not, but input information in a systematic way, such that you can leverage that data to make, you know, decisions or gather data around product feedback or customer pain points, or to predict the likelihood of a deal closing, or so that 6 months, 12 months down the line, you have, you know, a good sort of system for your relationship managers or customer success managers to be able to have as much information from the customer as the original sales rep. Pad. I think the systems component is almost more important.

Yeah, some really great points there as well. I mean, the report is huge, right? I mean, you need to establish that bond and that human-to-human connection. So I think that alone is like a really good takeaway for a lot of the founders here, right? Just don't start spewing out questions and like, just like being artificially there. Connect with the person first, and then, you know, you'll get better communication.

Flow.

So, um, with a couple minutes left here, I do want to introduce Sumitra from Freshworks. Uh, Freshworks has a really great, uh, deal for all of the, the founders that are on the call today. It's essentially $10,000 in credits across all of their products, which is incredible. So Freshworks helps startups all over the world with their suite of products. And then we'll introduce Larissa from Brex, who also has like a free handout to all of the founders who are on the call. And then at the end of this, we'll do some networking, and I'd love for the founders to stick around, and you can jump in and talk to some of the other people you've seen here in the chat. So Sumitra, I'm going to turn it over to you. Do you want to go through a quick talk or presentation about Freshworks and the credits that you're offering today?

Sure, sure. Thank you. Thanks, Ryan. First of all, thank you. Thanks, Patty. Thanks, Lucas. That was amazing, and I was looking at the comments, I was looking at the audience, it was constant engagement and it was wonderful. Thanks for sharing those insights. So, Ryan, this is what I'm going to do, I will share my screen, just run everyone through a couple of slides in terms of what we do at Freshworks for startups and what is in it for all the founders. Yeah, just let me know if you have my screen.

Yep, we can see it.

Perfect.

Yeah, wonderful. Guys, I'm Samitra, I head Freshworks for Startups initiative. Today we're all talking about building a customer-centric startup and this is a little sneak peek about how do you do that with Freshworks for Startups. So yeah, first thing first, I feel good today. Thank you, Ryan, Founders Institute, Brex, Larissa and the entire team and all the startups out there. This is actually a wall in our office and of course things are virtual now but the sentiment remains the same. Quick overview about Freshworks and who we are. So Freshworks is a B2B SaaS product company. We are backed by 4 investors: Google Capital, Accel, Sequoia, and Tiger Global. We have raised $400 million. Public valuation stands somewhere upwards of $3.5 billion now. We have 13-odd offices headquartered in California, serving 250,000+ businesses across 140+ countries now. A couple of weeks back we announced crossing $300 million in terms of our ARR and growing at a healthy 40% year-on-year growth. What we essentially do is we play broadly into two domains, one is customer engagement and second is employee engagement and I'll talk about that in a bit. But yeah, we were also one of the fastest companies in the world to reach the $100 million ARR milestone to be precise in a duration of 5.2 years. And one of the core reasons for that is our business model or how we looked at the market. So while some of the most successful Valley companies looked at it in a different way, we focused on those, you know, the long tail of the industry, SMBs and mid-market. As they scaled, we also scaled along with them, and coupled that with our multi-product strategy has been proving as a strong differentiator for us. Moving to Freshworks for Startups, the reason why we all are here and why we are speaking to you. This is a 1-year-old initiative, guys, and it stems from the fact that we were also a very small 6-member team back in the days, you know, beyond 5 or 10 years. But now if you look at us, we are 3,500+ employees across all of these locations and all of that. So this was all possible because we got a lot of support, mentorship, direction, and you know, lot of right kind of insights from folks like Founders Institute and so on. So this is our initiative to pay it forward and give it back to the founders ecosystem. What we essentially do is 3 things. Number 1 is access to products along with white glove onboarding. So we open up $10,000 credits and the value prop is simple. You as a founder shouldn't be spending time, money, and resources on things which are not core to you. So you do what's important and We'll take care of sales, marketing, and support for you. Number 2 is access to engagement or mentorship and resources. So we drive a lot of such similar sessions, workshops, webinars, one-on-one office hours, opening up Freshworks playbooks and things like that. So that's number 2. And the last piece is around Freshworks ecosystem. This is where moving from resources and mentors, we do real-world connections. We do a lot of VC connects, founder connects, and creating opportunities for founders to work with us and all of our 200,000+ customers as well. We have acquired 17 companies so far, so always on the lookout for next relevant target. So feel free to reach out to us through the program and happy to have a chat. So yeah, this is the program, guys, and we work with 400+ partners now. Of course, proud partners with Founders Institute and This includes all the top VCs, accelerators across the globe and close to 6,000-odd startups and scale-ups work with us through this program. And yeah, we are growing this across 90-odd countries now and yeah, just circling that back to how this happens or how actually we work it out for startups is through the Freshworks platform. So like I said, we have 8-odd products in the segment. So if I have to tell it in one sentence what we do, if you think it from a company's perspective, right from the phase when you're looking at customer acquisition, you know, right from having that website, running those lead campaigns, session replays, lead acquisition to sales lifecycle, winning those customers. Eventually, you know, once you win those customers, how do you support them? And finally, how do you convert them into your advocates? So we play in that entire value chain both for end customers as well as your employees. So Freshworks CRM is the CRM tool which is a combination of marketing and sales automation. Freshdesk is customer support, Freshsuccess is a customer success tool, Freshchat is the live chat application enabled by bots, Freshcaller is the cloud telephony system, Freshservice is more for mid-sized to larger companies, it's an ITSM tool. PressTeam is a recruitment software. And on top of this, we have the— since we are talking about dogs, you know, the cute little dog that you see is Freddy, our AI and ML engine, which powers all the products and gives you the right insights and, you know, right steps that you should be taking. And we are a platform-first company. So all of these products can also be integrated with any product that you can imagine. So we have a vibrant marketplace. With 1,200+ apps. So you could be doing business through Apple for Business or Apple Chat or WhatsApp or any of the tools out there. So all of them can also be integrated as one single unified customer experience, right? Because it's all about customer centricity, right? So you don't want your reps, your team also to be switching windows and switching context. It's one single unified context across different teams and departments. and then how do you really work backwards from there. So yeah, that's us, guys, and you know, this is what we have for you. Our promise is simple, we want to help you on 3 levels: customer acquisition, product market fit, and operational excellence. We open up the entire program through this event, excited to share that. All of you get up to $10,000 credits, white glove onboarding, mentorship resources, as well as access to Freshworks ecosystem. Right? So yeah, look forward to speaking to you. You can reach out to us and yeah, Ryan and team can also share links with you to get in touch with us. Thank you.

Thank you, Sumitra. And maybe you wanna put your, the link to Startup for Freshworks in the chat here. Larissa from Brex, why don't you take it away and tell us what Brex is offering founders today?

Thanks, Ryan. I'll take only a minute here, but hi everyone, thanks for a great panel. I'm Larissa. I was a member of the founding team of Brex almost 4 years ago. Today, I oversee our tech channels and partnerships. And for those of you who missed the introduction, Brex is an all-in-one business account, credit card, and spend management to make your life a lot easier running the finances of your company. Like Ryan said, we do have a special offer today. It's a pleasure to be partnering with Founder Institute and Freshworks on this event. And for those of you who sign up through brex.com/partners/fr, and I'm going to go ahead and drop it on the chat as well. Between now and Friday, we have a 10,000-point signup bonus. You know, and on top of that, lots of other partner offers as well, including $100,000 in AWS Activate credits. You do need to make sure you sign up through the link so that we can ensure you qualify for the offer, but you don't have to worry about any promo codes if prompted by the application. So dropping the link now. You have until Friday for the special offer. Offer. And back to you, Ryan.

Awesome. Thank you, Larissa. So this was a really great event. I really appreciate everyone's time. Lucas, Pradeep, thank you for joining us today. You know, in conclusion, it's important to be building customer-centric startups. We'll be sending out the recording to this in the next 48 hours. And I'd also like to invite everyone to join us for the networking event, which is gonna be held on Airmeet. So we use Airmeet to do all of our networking and it's really great. You can do speed networking or you can do tables and meet with founders. So if you would like to join us for the networking session, go ahead and open this Airmeet link here in the chat. I just pasted it and we'll see you over there. You can meet with other founders, mentors, and investors. So once again, thank you to Brex. Thank you to Freshworks. We really appreciate your time today. and we look forward to doing more of these in the future with you. Thank you so much.

Thank you all.

Thank you. Thanks, all. Thanks, Brian.

Thank you.

I'm going to leave this Zoom line open just for another minute while everyone kind of goes to that Airmeet link. Again, we'll see you over there and we'll do a little bit of founder networking. Thanks, everyone. See you, Sumitra.