India’s best known SaaS startup Freshdesk rebrands itself Freshworks today. Under this umbrella will be multiple business software products, including customer support software Freshdesk that shook up global rivals soon after its launch in 2011.
Tweeters from American rival Zendesk dubbed it a “freaking rip-off” by a bunch of “Indian cowboys.” But it caught up with its rival and emerged a global leader in helpdesk software, before taking on the big gorilla Salesforce with the launch of Freshsales last year.
Its restructuring has been quietly in the works since early last year when Freshdesk bought the Freshworks domain. But a lot of back and forth went on before the company eventually decided to go ahead with the new name.
“There was a lot going on and we were also afraid. We didn’t know if Freshworks was the right way to go. We had a well-established brand with Freshdesk, so should we stick to it? The conventional wisdom is that you just use that brand and then rename the products,” founder and CEO Girish Mathrubootham tells me. “This was a strategic move for the company and we didn’t want to make a mistake. After a lot of deliberation, we finally realized that this was the right way to go.”
Currently, Freshworks has four products: Freshdesk, Freshservice, Freshsales, and Freshcaller – all designed to work “together to increase collaboration and help teams better connect and communicate with their customers and co-workers.”
Here are excerpts from an interview with Girish on the evolution of Freshdesk into a multi-product company, the thought behind its rebranding to Freshworks, and tips for entrepreneurs building product-driven companies.
Has Freshdesk outgrown its name for the company?
When we started in 2010, we wanted to build a fresh helpdesk, and that is why we called the company and the product Freshdesk. We always wanted to build a multi-product company, but in the early days we did not give away our strategy. We needed to do well with one product before we could embark on the next one.
Over the years, we saw that more than 23 percent of our customers were using Freshdesk for internal team support, so we launched Freshservice. Last year, we launched Freshsales. Today, we have tens of thousands of customers using Freshservice and Freshsales. And we saw that with the name Freshdesk, though it is a great brand now, everybody thought of us as a customer support or helpdesk brand. We wanted to create a brand which allows us to tell people that we are a multi-product company and not just one product. So now we have Freshworks which will be the umbrella brand and Freshdesk will continue as a product.
Like Google rebranding to Alphabet?
Google is way bigger than us. They had large businesses that didn’t fall under the Google umbrella, so they came up with Alphabet. You can’t really compare our move to Google’s.
But Freshdesk has a Google connection, isn’t it? Google Capital is one of your main investors.
Yes. And Google Capital is now CapitalG, after their rebranding.
Freshdesk has become so well-known around the world. Was it scary to rename the company? What was the thought process?
We started thinking about the rebranding a while back. We booked the domain in February last year. But we wanted to wait till Freshsales was launched. It was launched only in June last year. Without Freshsales, exposing our multi-product strategy wouldn’t have made sense. We wanted to hold our cards close to the chest.
When Freshsales took off, we started talking about the rebranding again. There was a lot going on and we were also afraid. We didn’t know if Freshworks was the right way to go. We had a well-established brand with Freshdesk, so should we stick to it? The conventional wisdom is that you just use that brand and then rename the products. Many other companies have done that. For example, SalesForce. The company is called SalesForce while they renamed the products as SalesCloud, ServiceCloud, and so on.
We were going back and forth on which way to go. This was a very strategic move for the company and we didn’t want to make a mistake. After a lot of deliberation, we finally realized that this was the right way to go.
What were the challenges you faced in transitioning to a multi-product company? How did you handle it?
In the early years, in 2012 or 2013, when Freshdesk itself was still small, if we had gone into another product, we would have risked losing the narrative. When we are dependent on the next round of funding, a new investor might think, ‘hey, why are they doing some other product? Is it a pivot? Maybe they are not doing well with Freshdesk, so they are building another product.’ So this kind of doubt would have put our future fundraising at stake and also customers would be confused, thinking why is such a small company already doing a second product. So we wanted to tread carefully there. We didn’t want to lose focus of the narrative.
We chose Freshservice as a second product because it allowed us to demonstrate our model of building multiple products, but from a narrative standpoint it was a helpdesk for internal customer support, while the Freshdesk product was a helpdesk for external customer support.
When Freshservice really started getting popular with a lot of customers, that is when everybody saw that we can build multiple products and scale them. And for many of our customers using Freshdesk, their top integrations was for CRMs (Customer Relationship Management). And we ourselves were struggling with getting our CRM and Freshdesk and all to work together. CRM and customer support should ideally be working very closely together and that is why we launched Freshsales. These were the major inflection points leading up to the rebrand.
What is the key takeaway for entrepreneurs from the Freshworks journey as a SaaS startup?
In the early days, we focused on winning in the SMB (small and medium business) market. A lot of companies focused on getting the larger clients, but we were focused on SMB. We knew that since we were sitting in Chennai, doing sales over the phone and web, our ability to close really large deals in 2011 or 2012 was less. We might get a bigger deal by luck, but most of the time we were closing a lot of small deals. The decision to keep the focus on SMB and keep building the product was important.
As the product gained credibility, bigger companies started coming inbound. One of the biggest discoveries for us was that. We didn’t go sell much to bigger companies, but a lot of them reached out to us inbound, they start trialing our product for one of their teams, and then more of their teams would start using us as well. This has been happening again and again.
To give you an example, SolarCity is one of our bigger customers. They started with 40 agents and today they have more than 2,000 agents with us. So that was kind of a different business model – where instead of selling top down, we were assisting customers who were buying from us.
If you look at companies like Atlassain or Slack or Dropbox – this is a new trend. The old model is where software is sold top down. Some bigshots will sign the check and the software is pushed down on the company. The new generation of software like Slack, Dropbox, or Atlassian is discovered by one of the teams in a company and grows virally inside. It is the strength of the product that the team that uses the product starts talking about it and it grows within the company, and then spreads to others.
It is not luck, and others are also experiencing this new model. What I think is happening is that big companies are now acting like small companies. Rather than going and signing a big multi-million-dollar contract for software, the big companies now want to start small – try it with one team, see how it goes, and then rapidly expand.
What is the most important thing entrepreneurs should keep in mind while building a software product company?
We are a product company. Every business problem that we have, we try to come up with a product-based solution. Even this whole exercise [of launching multiple products and rebranding] is along those lines. When we do not go after large enterprise customers, one common opinion that everybody holds is that it is very hard to grow fast and ramp up revenue as you mostly have mid-market customers or SMB customers. So our strategy was that we will build more products and we will get more money from the customers, so that we can ramp up revenue faster. We tie everything to our business model, and we do everything in a product-driven manner.
That is what I would like entrepreneurs to learn from us. Whatever you want to tell the world, tell it through your product. Make sure your products speak for themselves.
Will Freshdesk turning into the multi-product Freshworks pit you against your former employer and SaaS pioneer in Chennai, Zoho?
This doesn’t pit us against Zoho in any way. The right way to think about Freshworks is that we are more like Atlassian for business teams. Atlassian usually builds software for engineering teams. We are more for business teams like helpdesk, sales, IT service desk teams, and so on.
A lot of the time, people have been thinking of us an affordable alternative to Zendesk. But that perception was limited. Our aspirations were much beyond helpdesk.
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