Episode 212 / April 17, 2023
From Scratch to Success: Whatfix Founders Khadim Batti & Vara Kumar Namburu Share Struggles and Insights on building a Multi-Million Dollar SaaS Company
Whatfix has a user base of over 10 million people and has been used to create over 1.5 million digital walkthroughs and tutorials. It has 500+ enterprise customers worldwide, including companies like HP, Schneider Electric, and Autodesk. Since its launch in 2014, Whatfix has become a go-to solution for businesses across multiple industries.
The platform has also received the “Best SaaS Product for Web/App Development” at the 2021 SaaS Awards.
In this episode, we have Whatfix founders Khadim Batti and Vara Kumar Namburu share the journey of Whatfix from their first offline Dreamforce event to reaching 10 Million people, their vision, clients, scale, culture and more.
00:00 – Highlights of the conversation
02:06 – What’s Whatfix and how it’s unique
04:07 – Strategy of CTO moving to the US and CEO being in India
06:31 – Bringing Vispi Daver as an Angel Investor
10:18 – Avoid falling into the trap of following someone else’s playbook as a first time founder
14:13 – Getting the first few Enterprise customers
15:57 – Taking Counter-intuitive bets
19:40 – Their first big event Dreamforce
25:02 – Going onestep back, would they do a 10-15 member round table for their most interested CIOs post Dreamforce event?
26:49 – Focusing on farming with Account Managers
31:36 – Advice to SaaS founder: When to focus on Brand?
34:10 – Brand-building after their first Dreamforce
36:45 – Their initial Ideal customer profile
37:58 – Challenges & Hurdles in their 1 to 10 journey
39:23 – Examples where the deal got stuck at IT Security or CFO-level
43:55 – Enabling multiple stakeholders in a sales decision
46:30 – Traditional profile of a sales person
47:24 – Hiring profile of their initial senior sales team
49:28 – How to deal with people’s Title expectation?
54:23 – Building their culture early-on
56:28 – Mistakes in their early journey
58:06 – Guiding the early team in the current journey
1:00:05 – Time & efforts in recent rounds of funding
1:04:27 – Raising from Stellaris Venture Partners
1:05:32 – Changing path amongst the founders
1:06:59 – Account plan review with customers
1:08:50 – Having set accounts with every leader to help the customers succeed
Read the full transcript Here:
The most important for us was asking the question, what are we trying to solve? Are we saying that one founder has to go there and its CEO has to be done or it has to be VP sales to hire and he has to be from the background, what is the problem you want to solve? So today if I have to distribute from 95%, inbound and 5% or miscellaneous, today Inbound is only contributing around 20%, 25% My expansions are contributing 35-40% My Channels are contributing close to 20%, my Outbound is contributing another 20-25%.
If you can narrow down the segment, it becomes a lot easier. Because for your product there can be a variety of biases, different industries can buy you and in different industries, different use cases you may solve, it is good to narrow down one particular segment. Because your narrative will become better. Your buyer persona will become better, competition will get better, everything will get better.
Are we moving into a stage where software has to adapt as per the user, can technology be more savvy of user than user in savvy of technology?
More than TAM what excited us was a variety of use cases, because among the first 10 customers we had, every customer was using Whatfix for a different use case.
Today if you look, there are $70-80 billion worth of enterprise software sold every year. That means large enterprises have more than 1000 software today. How do we provide visibility to an organization in terms of what’s the ROI on the software? How can we improvise on those ROI ease and make employees more productive? Like if I have a XYZ or let’s say Vara is there, if I say Vara is going to get somebody next to you and it’s just going to be Vara plus, there’s no motivation there, but it has to be Vara plus plus plus.
So that helps both ways, it helps customers to be successful and executors to be closer to the ground.
Hi this is Siddhartha Ahluwalia, co-founder of 100X Entrepreneur podcast, along with my partner Nansi and founder of 100X Entrepreneur SaaS fund, where we invest only in early stage SaaS companies. Today I have two icons from the India SaaS ecosystem, Khadim and Vara, founder of Whatfix. Welcome Khadim and Vara to the 100X Entrepreneur podcast.
Thanks for inviting us. It’s really a pleasure to be here.
So something unique about the Whatfix journey, which I want to tell our audience is, you guys started in 2010 pivoted to enterprise software in the 2013-14 timeframe, when enterprise software was not at all a category in India. So there were the first two category creations that you did, because the traditional Indian SaaS has been focused on from India, selling through marketing and creating top of the funnel like Zoho and Freshworks are doing, and they’re very marketing heavy companies. And what happens is when you have such large examples, other people try to follow the suit. So that was the first category creation that you did, building for enterprise from India in 2013-14.
And the second is, people want to follow something which has been done, so digital adoption was zero category. And why people want to follow is there’s already a budget in enterprises, so you tried to create a budget. So kudos to you for successfully completing10 years of Whatfix and creating two categories from India. Now everybody talks about those, go to the US and create a new category. You have created a playbook. But let’s dive deep into it. When you were thinking, your first journey was: For the first few years, you’re trying to sell to SMBs, a software that could manage their social media. And when you tried to help them because they were not using the software, how to use it better, you created Fixit. And once customers started asking from you, hey, can we use it or Fixit for ourselves? Then you built Whatfix. And Whatfix was still SMB focused at that point.
It actually started from a community. From the community, we went to SMB, and from SMB, we came to the enterprise. And that’s where we got real fit.
By community, it was like YouTube, we created a platform where anyone can come in and create a guide on anything. How do I book a ticket? How do I file my tax returns? So from there, there’s a lot of journey to get to the enterprise.
And the other unique thing is Vara, you are the CTO of the company, you moved to the US and Khadim stayed in, why did that happen? In most of the SaaS companies the CEO moves, and the entire tech team including the CTO stays in India.
By the time we decided somebody had to move, I think we were already a couple of million dollars in ARR, and three to four years in the journey. And some of the advice when I spoke to other founders who were a few steps ahead of us was don’t break things which are working. And we were able to do a lot of GTM from India for the US market. Now, as you mentioned, that is a new category, there is no budget item defined. We knew that we had to put a lot more work into figuring out what’s the best solution, which will eventually win this category. But somebody has to work very closely with the customers to identify how they’re using Whatfix, what are the other adjacencies and how this category will evolve.
And I was looking a lot more at GTM which was working fine. So we continue to do lifting from here, if I would have moved, the gravity would have shifted. So the best person was Vara, who would actually go to the US, work with the customers and evolve the category. That in hindsight actually has worked out well. The results are there, maybe anything different?
No, that was exactly the reason. So I moved in around 2018. So by then we didn’t have any pre-sales person or anyone who’s a little bit more technologist in the sales cycle. So my intent at that time was that I move to the US and I would go and visit the customers and explain the product to them. So that was the rationale that I moved. Just before I moved, we hired Vispi there. was acting as our salesperson on the ground in North America, though we have a lot of sellers here, all of them are selling to the US market. But in some of the deals, we needed to go and meet customers we wanted to go and meet at that time, because we could learn a lot more.
So I was the one who was filling that gap. So I was going and meeting customers. And the other part which helped a lot, which obviously I found there helps a lot in hiring because people would join because it’s an unknown company and hardly no one existed in the US. People who are just joining because the founder is talking to them on the owner is giving them confidence. And he’s talking about the vision.
So mostly, one was about whether that implementation would become more strong if Vara moves to the US, and the second is a co-founder leading it. I’ve seen 90% of the cases, the first VP sales from India goes terribly wrong, and then the founders become cold feet that this is not working, then I have to move it. But in your case, the CTO moved, the second best thing that you did is Vispi came in. And Vispi first came in as an angel in 2014. And how did you convince Vispi to join you full time?
Long story. So we met Vispi first in one of the workshops, which was arranged by GSF. We were part of the cohort in the Valley. And we’re actually in fact, that was the first time we both visited us actually and understood the local market. First thing we got to know is that selling for $100 is no point. So after meeting Vispi in the workshop, we realized that he has a very strong understanding in the customer support domain, because he was part of the board of another company, which was acquired by Parature. Being from his previous company, he was a partner in the venture world, So after the workshop, when we pitched, he really resonated with the concept, immediately committed an angel round, and introduced a few more angels. And that’s how we also gave him a board seat, because we really liked what he brought to the table.
I remember, in the second year of our Whatfix journey, we were supposed to attend an event in the US, Dreamforce. We were a five, six person company, we didn’t even have enough people with a visa to fill the booth of four people, actually. So three of us flew from India, and we asked Vispi to double down, can he be part of them? He said, fine, three days, the way he hustled on the floor, it gave him confidence about the category and how it resonates in the market. Plus what we saw was how he was hands on and talking to the potential people even though he didn’t have much sales experience before. Actually, that brought us very close in terms of understanding and belief in the category and all after that we got him on board for a day or two as a consultant and advisor so that he can double up as a face to potential customers.
And when he was trying his other initiative, which didn’t take off, I asked Vispi if he would like to join Whatfix. His first comment was, what will be upside? I don’t see this probably getting 200 million exit, because we were at a very small number. I said I can also see 100 million, the way we figured out to 100 million maybe together we’ll figure out to maybe half a billion. He thought for a while for a few days. And then he said okay, let’s do it. So he came on board, we asked him to take over sales, we only had a few sales guys. And now he’s like one of the very core members, like a founder.
Actually when he joined in, it wasn’t like we asked him to help the sales because it’s the first time that he was doing sales. He’d never done it before. It was from the dev background and Angel investment. Prior to investment, he was a cop dev background. But he has a lot of hustle, he wants to figure it out. He was a hands-on seller, and I was his partner sales engineer. Both of us were going and visiting.
I think you were there in the US, and you(Khadim) were also there at that point in time. And you tagged teams with Vispi. So that helped because if you would have left him alone in the US to figure out,
It would have been very hard. Given I own the product. I know everything. So with that team, we would go together with all the prospects and we would talk. So eventually he became a good seller. And then he started showing a lot of good management leadership attributes.
One thing I want to add actually may be from the Vispi’s experience and Vara moving to us. I think one underlying theme is actually we avoided following a pattern which was there in the market or whatever. Of course that was one of the data points to learn. But the most important for us was asking the question, what are we trying to solve? Are we solving the problem that one founder has to go there and its CEO has to be done or there has to be VP sales to hire and he has to be from the background? What is the problem you want to solve? And every time when we answered that, okay, this is what we are trying to solve. The reason sometimes came up very radical, sometimes a regular playbook, or sometimes some decision which actually really became productive over a period of time, whether it was Vara’s movement, getting Vispi on board, doing several other hirings.
You were a first time founder and you pivoted so I would always call it the first time, because you pivoted from the previous product to the current product. And I believe the company structure would have remained the same. So it would have made more sense for you to follow any other playbook rather than creating your own because every time you create your own playbook, there are questions from stakeholders and self doubt from the founder. Why are we doing it? So how do you avoid falling into the trap of going for an existing bias?
It will definitely happen. As I was mentioning, first, answer the question like, what are we trying to solve here? Once you have that, talk to a few founders, how did they solve this problem, there are always two or three people who will be a couple of few steps ahead of you, while trying to solve the problem, what kind of challenges they faced. So from many founders, we heard like they tried to solve in an ABC way, like hiring people in the US or getting some specific leadership, how it worked, how it didn’t work, what are the pitfalls, so learn from those and try to actually apply it to your dynamics, because every company has its own challenges or variables, See what is the best for you and take that call. Because at the end of the day, you are answerable as a founder, people will give solutions, but you need to make up everything because you’re on the ground. I think that that’s what has worked and reduces the bias as much as possible.
In my view, every company is different, every product is different. Even if you are building the same product for two different companies and two different founders, it will be very differently operated, it’ll be very differently executed. So I think it’s good to learn what others have done. But I don’t think it’s necessary for us to follow. As long as Kahdim said that we knew what we were doing what’s our objective.
I’ll give an example actually, like everybody says enterprise will not work from India, specifically GTM. It has to be local, because that’s what everybody told us. From India, you can build SMBs but in enterprise you need to be locally present. Or why is that? Take an example, you are head of sales for Coca Cola, for example and you are doing a digital transformation or changing your CRM stack to Salesforce, you are not going to Google like what stack should I use, you’re going to ask all of your procurement head and say, Okay, let’s throw out an RFP of $25 million, I’m going to revamp my CRM stack. I want to get to the next generation. Even your procurement head is not going to do that. He’s going to give an RFP to Deloitte or Accenture, Infosys of the world.
They are going to pitch, I have a dynamics practice. I have a Salesforce practice and this other CLM, CPQ tool and this is going to be my stack. There’s no googling happening here. So in a well defined category, there are two or three players who are occupying the mindshare. Even if you go to Gartner and Forrester, they want to tell you about the three players even if you look at the Magic Quadrant, and everybody wants to work with them. Now imagine that digital transformation has happened. People are not using it. Now the head of Coca Cola sales says to his head of learning, ” I spent $25 million but I’m not getting any benefit out of it. I’ve run classroom the CLO would say I’ve done classroom readings I’ve done documentation I’ve done all the handling possible, still not working figured out why not talk to gardeners check in the event check to the peers, ask an analyst to Google and say how people do change management today when they do the CRM stack?
Now that’s the change which has happened because of inflection because improvise to a cloud moment from off context to in context or on demand movement. It’s a new category that has a potential of landing, even into large enterprises. In this case, even more might work. There is a potential wherever you’re sitting globally, because you’re solving a problem, which is actually people are trying to solve with the legacy methods and there is a potential of a new entrant here. And there is no clear mindshare. So for next seven, eight years, and the category gets established, there’s a potential of two or three players to get there, get into gardeners get into foresters get into the mindset of enterprise executives, maybe make your inbound work, make your events work, and then that category establishes an incubation cycle.
So you need to understand from the first principle exactly who your buyer is. How are they going to think about solving that particular problem? And what are they going to use as a mechanism, you might completely evolve your GTM differently, the existing methodology is that people are propagating, you have to be here, you have to be here, this is the way enterprise work, this may not apply.
But in your case, then how did you manage to get in front of the top 10 enterprise first clients that you got?
I remember the first few clients, we started from India we got Flipkart, we got ICICI bank. They were the first to enterprise customers. We got one in Germany, one library and then one we got in Boston, some of them were a lot more hustle from our side, promising them that okay, we are a very small, nimble company, we can adapt your features and move very fast with you. This is our roadmap, making them believe that we are a partner in innovation for the long term, somehow get the entry even if it’s very small, but make sure that you can use that story and logo as much as possible. And when you have the first four or five use cases, first four or five case studies, Logos testimonial, the six seven days customer starts becoming easier and easier to get.
Today we have 71 of the fortune 500. Whenever we open that logo slide, nobody asks the questions, where are you based. Because it’s already established, you’re already authoritative in that particular domain. But first, before you need to really hustle and get somehow those logos, irrespective of price point, irrespective of how much you need to maneuver.
I think more tactically to answer that question. So initially the events helped us a lot. The Dreamforce we attended changed our view, because every person who’s coming to the booth and we speak with everyone is related to the problem statement, everyone. So we could clearly understand the problem is really big in the enterprise, with employees and adoption. So the events gave us a lot of leads. And then obviously, everything around online. So whether it is ads or content, all of those also give a lot of opportunities.
And one other counterintuitive thing that you did is, Dreamforce was which year that you attended?
This was 2016.
You were barely below half a million ARR. And you put up a booth there. How much did it cost?
It was actually at that point along with the booth and everything. It cost $35-40,000.
And how much did you have in the bank?
700k 600k something. So it was a bet, there was a big investment. We had to believe intuitively that it was a risky year.
But that’s again, the counterintuitive because you’re selling something digital life software is completely digital experience. And why is physical presence required to sell the software, it should be sold digitally?
So we were already selling digitally, actually, but then we wanted to validate much faster and quicker in the specific segment, because we were trying to create a motion on top of CRM, because that’s a low hanging fruit for us. And Dreamforce is one place where 100,000 Plus footfall, there’s a CRM ecosystem. So within that first like three days, three and a half days it was an event, we would have spoken to 300 people. And the pitch, which we had on day one for the first potential was somebody who visited our booth to the last pitch was dramatically different.
In fact, I’ll tell you one story. Prior to Dreamforce. We were selling for around $2000- $3,000 a year. A year, not a month. Now, when we went to Dreamforce. We thought, Okay, we’ll sell something expensive. Now, what is expensive, is that okay, we’ll sell it for $8,000- 10,000, when a potential customer visited our booth, and he asked for the concept he really loved, he asked for the price point. So the Prakhar who was currently our head of territory sales, he was a sales rep then, he said $8,000. Our intent was $8,000 a year. the person quickly said, Okay, 8 into 12, $96,000, that looks fine. That was a shock for us, we were selling for eight and the guy is saying 96000 is fine, because the person is spending $20 million on a Salesforce, a few hundred thousand dollars actually, it’s fine for ensuring there’s an ROI on top of that platform.
So this kind of learning was very difficult to get remotely. And the iteration in terms of pitch, the use case is resonating with the persona quickly getting that go to market fit very, very well in person, even India when we started, as soon as we used to get a demo request. Because the first eight, nine customers were in India, we used to go and meet as many people as possible in person. We can see the reaction. I’ll tell you, I’m going to charge you $2,000, see the reaction, maybe $8,000. So you can iterate very quickly. That’s what mattered a lot.
Also, eventually what we learned also that it is just not the price point. But the effort that it takes to onboard an enterprise is very, very different. Because enterprise operates at its own complexity. And expectations are very different from a small business, where small businesses had a very standardized experience, big enterprise has a very different experience. So that’s a lot of learning that we had over a period of time.
Even with the addressable market size prior to Dreamforce, I was thinking SaaS companies and some enterprise companies infuse software, they’re gonna use some specific type of companies. We didn’t know that detail of how CRM is deep. Another example was one person who matters at a booth saying, Okay, I want to use this because it looks very relevant. I have 300 or 400 sales guys, the price point, your looks, when we asked what they do, they do glass cleaning. And those companies are ready to pay 50,000 $100,000 for a Whatfix on top of Salesforce, that immediately gives the perspective of how big the potential is and how big the TAM is. So remotely, you have a fixed thing. Okay, I know this is my persona, I’m going to go behind. Here suddenly, you will see you start discovering things which you don’t know. So a lot more discovery happens there.
Then after that Dreamforce, events become your primary go to market playbook.
It was one of the go to market channels for sure.
Can you also tell the journey after it?
So I think when we started actually we started initial validation with outbond. So he used to give me 25 email ids every day and I used to send those email ids, get that couple of Demos and then try to close. So first eight to 10 customers came by outbound, then we onboard, first hiring was a sales guy, second hiring was marketing. Third hire was marketing and fourth was engineer, Because he told us that as long as we know the requirements, we can actually fix it, we need somebody to sell and help us there. So once I got Vipul and a couple of other marketing guys onboard, the idea was how can I build my inbound engine? Because outbound we knew it’s hard to scale in early on, it was okay for validation. And we started doing inbound.
I think for the first couple of million dollars 95% of revenue came from inbound. After initial validation of the outbound post that we started doing events, events took a while initially, events were only for validation and refining the pitch, conversion was not that easy, it was more of creating the market awareness and all. Gradually, we also learned how to actually utilize events for conversion, like getting the potential customers’ existing customers, asking them to talk and customers who are already valued in the cycle and they are on the fence, get them to the event so that they build the trust in all.
So the event started becoming gradually the second channel which started contributing. Then we started some inbound side coming on channels, like system integrators, which deploy CRM or HR like those started getting into after that, we started reviving our outbound. So having SDR, doing cold calling generating opportunities, and then finally our content started kicking off and content is also now started contributing. And as we started creating a base of enterprise expansion became a huge thing. So today, if I have to distribute from 95%, inbound, and 5%, all miscellaneous, today inbound is only contributing around 20% 35%. My expansions are contributing 35-40%. My Channels are contributing close to 20%. My outbond, contributing another 20-25%. So it’s widespread.
Every channel, we did a lot of experimentation, right from outbond, so many different variants we tried.
So I was asking about the Dreamforce event. You took your learnings from that. You got in front of 300 customers on a daily basis. And after I think 1000 interactions your mind would have known that such a large market is present out there. I think back then the stellaris wasn’t there,
It was there, Stellaris was not there.
It was only $1 million from Helion. And as you mentioned 700k, 800k, was in the bank. So those 1000 customers that you brought in front, what were the next set of events that you did in the US market?
Actually post that there was a pause. We didn’t do events for a bit. Immediately coming out of the event, all our perception of that time was that we spoke with so many people and so much interest. We thought we could close a lot of deals. But gradually we realized over the days that we couldn’t really close much because the company wasn’t ready. The product was underwriting a lot of enterprise expectations, which we were not ready at that time. So we didn’t do it. I don’t believe we did too many events. After that there was a pause until the product. After that, maybe we scaled up again.
And then when did you start an event as a proper playbook, like doing at least four to five events in a year?
Once we realize that, how do we convert the customers from events, because even if 1000 People are meeting us, those people also get another 20 companies from then after three days they don’t even remember how good you are. So we started learning that somebody comes to the booth to take a photograph. A lot of hacks around that. Plus have a dedicated SDR team for only events, and then two or three dedicated people for Event Management and field marketing and all. So as those structures started getting more clean and clear, events started becoming a playbook. Actually we got the real benefit when we have, let’s say, another 100 opportunities in conversations. Can I get 20 of those to meet in the booth? Because most of these guys are talking online. Can I get this 20? Out of my 100 customers, can I get my 15 customers to the booth and just try to make a match there so that if somebody hears from existing customers, the half of the deal is sold there actually?
So when we started doing those, the real ROI started happening. A lot of customers were 50% to 70%. There, they started converting one week, two weeks after the event, they went back and signed the contract. So that’s how a playbook started evolving a dedicated SDR team dedicated to the marketing team, getting all those customers and all. Today we have around seven to eight people dedicated to events. We do close to 100 events offline and online in a year. And it’s already contributing 20-25% of our revenue. And the deals we make from events are pretty big. And now we are also narrowing down, going to create our own roundtables, calling only CIOs and CLOs in different cities. There are too many different variations and events, not only that bootleg reinforces our own event scale where we have like 1000 people joining and then roundtables then we do our own party Carson, webinars are so many variations now.
So if you have to go one step back, And let’s say, would you do a 10 to 15 member roundtable, just post the Dreamforce to your most interested prospects.
What happens is like specifically in our category, when it’s not a clearly defined budget line item, you always don’t start from CIO, you’ll start with the business functions. So you end up talking to the head of operations or head of sales or someone and they will try to buy Whatfix for that particular department. So in those cases, these events like reinforcements and other events work really well. Now, I already have a couple of business functions, so it’s really good to call for a roundtable with the CIOs and say, there are already some footprints, why not maybe make it enterprise wide and spread across organizations and really get a larger deal. I think that kind of playbook is working out well for us: get those events a little bit more spray, get an entry, work on the account, get a CIO with a solid story of that particular enterprise and account and try to go big in that. So that’s working out fine now. Directly meeting the CIO for the first time in a dream force. Even if they come to a roundtable may or may not work. It might be hard to pull it off.
But I think it will also evolve because the category still, it is not that every CIO is already putting a budget at, so the category is evolving there. But as the category evolves there, we’ll be able to do top down.
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And I think another thing that you did is that rather than giving customer success the entire responsibility of farming the council, there are two motions, hunting is getting new accounts. And farming is going one level below and keeps on nurturing the existing ground, it keeps on increasing their annual contract value. So you put a lot of focus on farming from early on. And rather than outsourcing it to customer success. You build the motion of account managers, share more about that.
So that also evolves, it was not like day one, you will hear this structure, because when we talk to most of the other companies, they have sales guys doing both, or success guys doing both. There’s no dedicated forming team, we initially thought like successful guys would do it. There were partial results there. And we realize that there’s always too much glory when somebody gets a new dollar and it gets published. So everyone gets a lot of pat on the back. And the focus goes away from the value realization. Again, I’ll go to the first principle approach. We were talking about the Coca Cola example, so if somebody buys Salesforce today, they will know what to expect out of Salesforce. I will need an SI to implement, I will have a Salesforce administrator, I will have a sales operations person, but somebody buys Whatfix. They don’t know how to realize ROI, all of that.
So who owns us is on the vendor, or the software seller to do heavy lifting. Now if my success guys actually do focus on expansions, who would do the heavy lifting of realizing the ROI for the customers. So good we realize this very early on and we change that success guys will only focus on NPS ROI, business reviews, quarterly business reviews and renewals. That’s it. No expansions. Even if it happens, give it to the sales guys. Your core KPIs that miraculously work today the kind of feedback we get from Fortune 500 customers, it’s not like we’re the best player. You’re the best vendor we have ever worked with. That kind of comments we get because it’s focused on we really went deep and we create a lot of stuff.
Now coming back, of course, we’re leaving a lot of money on the table because we’re not expanding there. So being a new category again, the market is wide open. If I asked a sales guy to expand, if expansion is low hanging fruit, low acquisition is hard, we’re going to focus there. So we had to specialize again. So we said, Okay, this team is going to focus only on hunting, there’s another team that is going to set up to focus only on farming, define clear rules of engagement, and how the accounts will move. And between all this, including success, it took a while, it took a couple of years of iteration, but it’s working phenomenally well.
But actually, there’s also a little bit of nuance to our own product. So for many products, they could only sell once in any one account. So if you’re selling procurement software, you can only sell once, because there’s only one procurement department. But for Whatfix that’s not like that. So Whatfix has applicability across every software that is deployed in the company. So we could just go sell to sales and then we can go to HR, we can sell to procurement, we can sell the finance we can sell to so many. So what we realize is that we needed a special focus for expansion. Because of one single account, let’s say a large enterprise of 10,000 or 100,000 employees, that itself is a huge TAM for us. So a good seller could just have one account or make their quota year over year.
To give six to seven large accounts to one account manager and let that account manager only be focused on growing those accounts
Yes, get the quarter from that only. So even GTM actually, if I asked somebody else to define my GTM model, it would be one line, lend from India, expand in the region. So I have 70-80% account manager in the region, but my land team is 90% in India, and considering the land unit economics, I land at $80,000-100,000 and then expansion can happen even a million times. That economics also works really well.
There is a handover happening, your Greenfield is hunting from India, let’s figure out 50-100k accounts. As soon as we grow them to a certain scale, figure out who is the best account manager.
So the account manager is territory wise, So there is an economist sitting in Boston, somebody in Chicago, somebody sitting in LA. So depending on the region, maybe we also try to visualize in terms of industries, automobiles or something. So it’s a combination of region plus industry, that’s what direction we are moving. In fact, just to add on the territory, the same spot hunting part always surprises us, actually. So early on, when we used to talk about doing sales from India, many of our investors and other investors said it’s fine to do 5k deals from India, 10k deals from India, we were doing that, we started doing 25k deals, maybe it’s working fine. We started with 50k deals, 100k , this is something different. Today we’re landing half a million, a million from India.
Because there’s a brand built.
Brand built, and it’s also that categories evolve a little. So there’s a little bit more awareness.
What would you advise to SaaS founders, when to focus on a brand because every SaaS founder believes that, I have a product, I have a sales guy, why isn’t the sales happening?
My general recommendation is that which we have also learned during our outbond experiments in many places is that if you can narrow down the segment, it becomes a lot easier. Because for your product, there can be a variety of biases, maybe different industries can buy you and in different industries, different use cases you may solve, it is good to narrow down one particular segment. Because your narrative will become better, your buyer persona will become better, competition will get better, everything will get better. So my recommendation for any startup leaders could be can you narrow down the segment. So the book Crossing the Chasm expand that really, really well. So the more you can narrow the segment, your go to market becomes more efficient and easy.
I’ll give an example of what he’s actually saying. So our value prop can be like, I’ll reduce your support tickets by 50%, I’ll improve your sales productivity, it’s very horizontal. And if you’re a head of a particular department, let’s say insurance, say fine at the moment, if that’s a burning problem, I’ll say yes, otherwise, I’ll ignore you. And now let’s say head of the claims department, I go to the head of the department for property and casualty insurance, and I say, I’m going to help you reduce your claims processing time. I’m going to help you reduce your claims error and improve your claims compliance so that you don’t get hit by claims penalties. These are the day to day problems they want to solve. And as soon as they say, okay, my claims processing them can come down by 20%. Let me look, because it’s a competitive advantage. That’s my KPI of day in, day out. I’m making a billion dollars claims every month. We want to listen to it.
So when you narrow down, your messaging actually starts resonating really well. Then when you go deeper. Now this claim stack is built on your three or four applications, maybe guidewire, maybe something. It’s easy to strike a partnership, because you have such a narrow story. When I go to SIs insurance practice, it resonates very well. Now you’ve built the ecosystem of your SI Partners, your software vendors or OEM partners, you have 5-10 logos in that particular department of an insurance industry. When I got another five, another 10. Somebody would have already heard that they are moving the jobs or they’re talking into some events. You already have a mini brand.
So instead of going for building a large brand, start from that meaning, like okay, in this particular PNC industry, which is $100 million TAM, I think everybody knows me, and then maybe use that bowling pin approach like Okay, what’s next? Can I go to life and annuities? Can I go to digital banking and start so that’s the better way of creating a brand rather than saying, Okay, I want to go to a big bank. By the time you reach 10 million already that mini brand starts happening here and there in pockets, just capitalize on that.
Going again, back to the dream foresight because that’s when Whatfix 2.0 was born. So what was the next two, three years?
I would say 1.0 only, before that it was all experiments.
What was the brand building that went into the company consciously for the next two, three years after that?
So of course, doubling down more on the events where we used to start creating awareness, creating the top of the funnel, that was one. Second, we started working with analysts. There’s a new category, we started pretty early on to talk to Gartners, Foresters, IDCs, Everest and many others, to keep them briefing on what we are doing, how this category is evolving because they also want to write papers. That actually started giving us lots of rewards in the last 18-20 months, but it used to take three to four years early on to keep giving them. Third, channels, Like, we went channels pretty early when we were 2 million by half million dollars in revenue. But it doesn’t move the needle very early on because it takes a lot of effort to even get entry into the channels and show them the value. Occasional deals you will get.
But by the time the category is evolving. The CIO started creating this as a budget item.They would talk to Accenture, they would talk to Deloitte or Infosys or Wipro, TCS, and you are already in the radar. So, I would say analyst relationship, your events are one of the top of the funnel to create that marketing awareness, your channels, which also helps in branding and awareness. And then a couple of other things like writing your own white papers, put your knowledge, whatever you guys have accumulated, reading those white papers and building thought leadership, along with content, webinars, podcasts, that was another thing.
We invested a lot in the content in the last few years, the industry continuously kept on increasing, because those are the things that are required for people to understand your category and get familiarized with it.
Create the narrative and try to drive that narrative actually. One narrative, which we are trying to do for the last year or more. When this is resonating with the analyst all like so far, we all believed, like as a user, we have to adapt to the software. Now, are we moving into a stage where software has to adapt as per user? Can technology be more savvy of users rather than user savvy of technology? So how can we create a layer on top of technology which actually understands the users better, and make them more productive? And that’s what we call userization as a philosophy. So build that narrative and actually see that narrative pick up and when somebody talks about userization, somebody talks about adoption, by default, the first thing comes to your mind is okay, it’s Whatfix.
And if you have to go back to your ideal customer profile again, which Vara talked about, be very focused on the Miniatur profile. What was that one profile? Were you looking in a particular industry that lets you target only BFSI in the US.
So initially, when we started off, we didn’t. But what we did was, we targeted the use cases very clearly, we targeted sales, and HR, these were the two strong use cases we targeted. Events and marketing and everything revolved around that. Because these are the two functions that exist irrespective of industry, very horizontal. So that’s what we targeted. When we started doing outbound, it was around three to four years back. So that’s when we narrowed down to your particular industry, we narrowed down to property and casualty insurance, automobile and home insurance companies.
So we targeted those companies, because we wanted to try outbound in a very segmented approach that I talked about. So we created a separate Sales Team, separate BDR team, separate product Marketing, it’s almost like a mini company within Whatfix. So who started targeting only the insurance companies, the results were extremely good. So then we started going to the adjacent segments, to life insurance, then to the Financial Services, the more adjacencies that we can keep.
So let’s go to the one to 10 journey, one to 10 million ARR journey. That’s when you have early success, early believers, building the repeatable motion now, how did you encounter the persona of the IT security, IT ops, security ops, and then finding the CFO, being the hurdles in your purchase journey? Because you’re sitting on top of the CRM, Salesforce. And then these guys would come in and say, Hey, is it really required? Because they might not understand the user persona.
Yes, definitely. Initially, we didn’t know what it takes to sell to the enterprise, because it’s just not enough for the product to be strong and have a good value prop. It is important that all the other stakeholders feel confident that the product is secure enough and safe enough. Because we sat down the core applications actually talked about CRM or HR software, where there’s a lot of employee confidential data that exists. So our early realization is that for us to be able to sell the enterprise, we need to do certain things such as basic compliances that need to be in place. So we did a lot of those. Post those, it has become a lot easier. Because prior to that, it would take a lot of effort to convince the security and IT teams, because if you don’t have compliance, then you will have to be able to explain many things to them. So post those compliances it has become better, then eventually we found our own information security group, and we continue to do new compliance every year.
Can you share some examples like where a deal could have got stuck at the CFO or the IT ops level?
Many, very early days there was a very large food chain in the US. So they sent us a questionnaire of probably around 200 questions that they wanted us to answer, and it was the first time we have ever seen such a questionnaire. So they asked a lot of details about where you host. Do you have a disaster recovery center? Actually, we didn’t have a lot of knowledge of many of those during those early days. That deal we couldn’t build because we weren’t ready for most of those 200 items, we had to say no, because we weren’t doing any of those. So then we started focusing, we focused a lot on compliance. And then we started taking care of a lot of those precautions, post that it was okay.
The CFO actually buys, because we enter one or two applications, generally, the budget comes from the business function. So the business function has already come out of the budget. And when it goes to CFOs, or by the time the budget problem is not there, unless like today’s day when we even landed a large million dollar, half a million dollars. So that’s where the CFOs come. So now, I think like many other companies, we also say that the sales cycles are increasing. Instead of three approvers, there are five approvers. So those things are happening, but by the time it reaches, then the next level has figured out the budget, where it’s going to come from and how much is located. Definitely more questions in terms of what’s the ROI. When are we going to see the value levers?
And as we also evolved as a company, maybe not exactly one to 10. But as we are evolving, let’s say from 200 mil gradually getting there, there are different personas, we are trying to build a product, our product for that entry level was having a solid fit. Now does it have for the head of IT? Does it have it for CIO? So I was solving a problem for, let’s say one of the applications for that option. Now, can I solve the bigger problem of an organization? Because today if you look, there are seven $80 billion worth of enterprise software sold every year. That means large enterprises have more than 1000 software today. How do we provide visibility to an organization in terms of what’s the ROI on the software? How can we improvise on those ROI and make employees more productive?
So if I answer that question, it only answers CIO, CFO in a big way, because they also need somebody to solve that problem. But also it boils down to the employee level. So we had a solid product market fit at the application layer or application level or user level. But we need to build a lot more into the stack on many more products to get the product market fit as a CIO or a CFO level. But when we get there, we are talking about multimillion dollar deals. So some products evolve in the journey. And I think we are on that path as well.
Because what I have historically seen is 90% of the founders underestimate what it requires to sell to an enterprise.
So sometimes sales cycles kill early stage because you want to show results very quickly. Now, you start your sales cycle, you have an initial demonstration, show the value levers, and then okay, you need to be registered as a vendor, after registering as a vendor, they need to go to the IT security clearance, cloud clearance. And then suddenly, you get to know that okay, there’s going to be a committee which is going to discuss or procurement is going to roll off the RFP, you have finished all the steps but it doesn’t mean you have one. Because there’s a policy that anything more than $1,000, you don’t have an RFP or something, you’re back to square one.
So the sales cycle sometimes takes 468 months and all the process has to evolve, like we call something like a sequence of events, like when we talk to a buyer, we ask them, this is the process, we have learned from our other buyers, that post your initial evaluation of Whatfix somebody has to research the vendor, because we need to go to IT security, we need to go through XYZ. So who are your POCs? Can we do this parallel? So when you start those parallely, your sales cycle doesn’t go to eight months, you can actually start seeing get squeezed into four months. We ask them proactively, who is your procurement, can you cross check with them for our kind of a product for our kind of ticket size, do you need an RFP, or single vendor budget is fine. Because every company has a different process. So discovering all those steps very early on creating the sequence of events and getting a buy in from your champion actually makes life a lot easier.
So again, when you don’t know when you’re starting for the first time, you’re having surprises. everything is finished and now you’re saying you’re buying a committee. So as the founder, you will get surprises when a sales guy says, we’re going to close this next week. But the next week doesn’t come for the next six months, we also don’t know, so the process also has to keep evolving. And eventually that’s what enterprise sales processes are.
And probably 10 or 20 are stakeholder The founders never expected. They only expect their ICP to be the stakeholder. And when these people start to get in, into purchase decisions implementation,
So one thing which we also tell all our salesperson actually that this is your champion, this is your persona who we’re going to interact with, but consider this guy is going to go and sell internally to another 20 people, so not only you need to sell to this guy but you need to enable this guy so that he can go and sell another 20 guys inside because sometimes they will expose you to other buyer or they may not because they want to be the layer in between. So enabling this person with all spoon feeding as much as possible. Okay, this is my value report, what else you would need, this is my security white paper, what else you would need to enable them as much as possible.
So we created a micro website also for every account where all the collaterals are mentioned. So make life easy for that person. So they just open that microsite and see everything they need so that they can demonstrate internally if they want. Ask them, “Okay, do you want me to be presenting to your stakeholders or your buying committee? Let me know. So use that as you’re representing us inside the seller. Understanding that is very, very crucial.
And the most important thing is also to talk about value. Because if not only you will just sell this to your ICP, you also have to be able to sell that value across the FOC to everyone. So being able to talk about value in very clear terms that the company can understand is really, really important.
So another pitfall, What I’ve seen, like early on, a good amount of customers would ask, I need to do the pilot, you’re charged for the pilot, what is the outcome of the pilot? So again, very clearly defining, let’s call it a pilot statement of work, like, Okay, what is the duration of going to be my pilot? Who are the people who are going to get involved? What’s the mechanism to validate that this pilot is successful or not successful? What is the result? Who are the testers? Or is it end users, when you identify clearly and list everything out, it’s very easy to go and convince even the champion saying, okay, all these things, you can do it in three weeks, why you need three months, if you’re going to do in three months, I’m gonna charge you, if you want to three weeks, it’s okay.
So we also, first understand what requirements very clearly try to squeeze as much as possible as a smaller POC of two weeks, three weeks, because it’s visible, it’s possible. If somebody really wants to go for longer, then ask them to pay because the skin has to be in the game. Otherwise, they will keep on elongating, they will not have a right buy in, and they will not put enough effort. So practically asking them for that money. Maybe there is a resistance and you say, Okay, once you convert it to the final contract, this gets adjusted. So I think that’s another one which companies how to build a process around it and be very, very upfront on it.
And the traditional profile of the salesperson that says to his enterprises, the founders imagine is going to be a charismatic person, people pleasing, and it’s actually not. Can you elaborate more on this?
We both are introverts, actually, before starting this, I hardly wanted to go to any stage. And maybe I would like him to go, he would like me to go. But then there’s no choice. Sometimes you have to do it. So we learned over a period of time actually and be natural, because when you have a good product, when you have good traction, I think that speaks for itself. So I think as a founder, keep hustling, get that first 10-15 customers, when you get the first 10-15 customers understand the outcomes and ROI. Just don’t talk about that. That’s what everybody wants. No need to glamorize it or be flashy, I think, just be natural, it works actually, I don’t think there’s anything extraordinary out of it.
But the people that you hired for your senior sales role, what kind of profiles or what kind of characteristics was common among them?
So very early days, when we had, obviously hired more founders or hustlers because none of us knew the playbook. We didn’t really know about the sequence of events, we didn’t know how to handle the pilot, nothing. So we needed people who could figure it out. Because as I talked about, every company product is different. So we looked a lot for people who can hustle. So it was either founders or it was these people, the people that we are hiring, do they show that hustling mentality. So that’s what we’ve hired.
So mostly hands on guys, actually, The guys who can act early on are supposedly somebody who can roll up their sleeves and actually go give the demo to somebody who can actually even work with the customers to do a pilot. It’s not like somebody says, Okay, I’m a senior guy, I need one sales engineer, I will need one POC guy, they should be able to run it. I’m talking about the first four or five people. So being hands on and being confident to run the show, I think that was very important. And we build organizations bottom up, we never built top down.
So first three, four sales guys were actually A’s. It was not like we hired a VP sales and we went down. Maybe it was correct in hindsight, because if we would have gone top down, our initial motion was SMB, I would have hired maybe somebody who has done a lot of transactional sales at volumes, closing one $2,000 deal. Maybe two years down the line, maybe that was not a very motion for us, I would have gone to enterprise, what would have happened to the VP sales is the whole team in the DNA would be accordingly.
So in hindsight, like getting those A’s working with them, trying trading with them and building the process, I think it will work for us. And then once the proper playbook was established, then getting a senior person to actually scale up. So again, after summarizing one line, I would say for starters when your playbook is not defined, you don’t know what’s working, what’s not working, no need to have clear boundaries and constraints. Get hustlers, who will actually define the playbook. Once that playbook is defined, many of the hustlers will not be able to scale it because he needs to deal with one problem. Get a scaler, get somebody who’s been there done that for the similar kind of playbook they come in the building, scale it.
Another important thing is the title part that you mentioned, would love to dive deep into it. The kind of titles that you should give to your senior guys, and how to deal with people’s expectations regarding titles?
Maybe he can talk more about titles, I can talk about the other philosophy, like we were always stingy and frugal in terms of giving titles to individuals when early on when people came to me then I want to be X head, Y head, Y VP, X VP of a particular department I used to tell them that the company itself is $500-1,000 ARR, calling you a head of XYZ doesn’t resonate, let’s start at, let’s say director or something. And most of these guys were also coming from the director kind of level or something, they’re not seeing that much scale, or are coming from large organizations, but they’re not building something from scratch. So giving the title, the middle management or something and making them grow that organization and also they can grow along with that organization really helped.
Now, when we were, let’s say, 1 million ARR, if I want to hire somebody in sales, or marketing or a product, I’m going to not attract a CTO or a CSO, or someone who has been there, who has built from 1 million to 100 million, why would they come to a $1 million organization? It is very hard to attract. So you will attract somebody who has seven years of tenure experience. And there’s a high potential probability that you might over designate them. And as an organization, you would grow much faster than any individual and then organization goes beyond an individual, then you will have to get somebody else for the senior position. But then you already hired someone with the title. Now there is collateral damage there that the person has to go, you can’t demote, but that person would have been a really terrific director for you. And then you lost.
So I would say never over designate people at early stage, give them the title, what is actually relevant for your organization at that point, and then let them grow over a period of time, unless you’re very, very sure that this motion is for my company, I’m very sure about it, that this is going to not only scale from zero to one, but when from one to 10 and 10 to 100, you have a solid network, then it’s fine.
So the other thing, which we’ve been working on for the last, roughly one and a half, two years is, from an organization standpoint, moving to a descriptive title company. So generally companies title by directors, VP, so this is more seniority based titles. Those are not even telling exactly what this person is doing in that company. So the idea is to move to more descriptive titles in the company. For example, if someone is managing sales for an enterprise in North America, then that title says so, like head of sales for North America enterprise. So that’s what we’re moving towards. So the idea is that employees fight for a better role where they can increase their scope.
Rather than fighting for a better title.
They will aspire to take more ownership. Now it’s like, okay, it’s been two years, give me an example.
Probably somebody’s leading sales for Southeast Asia would aspire for leading sales for North America.
Or maybe from Southeast Asia can I do APAC? Or APJ? So go for it. So rather than just saying, in two years, three years, four years, give me something next.
So the same things we are trying to apply across organizations, from engineering to go to market functions to everywhere, make it very descriptive. The bottom line is that people aspire for more scope.
Another example I want to add in this hiring part, since it’s very close to my heart. And even Vara, we always talk about that, as I mentioned very early on, identify what you’re trying to solve, and then try to solve that particular problem rather than solving a designation. So when somebody says, Okay, go and hire the chief marketing officer. Now, why do you need a chief marketing officer? So this was a question a couple of years back for us. Nearly when we are $25 million ARR. Are we going to be attracting chief marketing officers, or the chief marketing officer is typically a much more branding guy, less demanding or tactical, why do we need what we’re trying to solve? So when we really started going deeper into this, we realized that demand gen is fine for us. The problem for us is how do we articulate a story. So it’s more of Product Marketing, problem positioning, launching our product, creating thought leadership in content, scaling or analyst part.
So we need somebody to head and refine our product marketing, rather than overall chief marketing officer. Even if I would have hired a Chief Marketing Officer, he or she worked for free, what they would have done, they will say, demand gen is working. Let me scale this quickly to show results. Or to solve this product marketing problem, I need to hire two more directors or a VP or something, it would delay my product marketing problem by six to nine months. And maybe the person is poking too much in the demand gen, which is working fine for me. So we are optimizing, let’s get a product marketing leader instead of a CMO for now, maybe a little overhead for us more reporting. But my problem gets solved immediately. And that was applicable across most of the departments. That’s another thing which worked for us.
So let’s say the framework, what am I trying to solve here for, how do we apply it to your culture?
So in the initial days, when we didn’t have any culture principles written or anything. So what we learned over a period of time is that the way the company behaves is the way that we are behaving. So the way that we were treating our customers the way we were treating our employees, that’s how the employees are looking at us. So what we realized is that the way we are has become the culture of the company. So then we sat and we wrote down our cultural principles. So given there are so many defaults in the way that we operate, that continued to exist in the company and continue to spread. So whether it is our customer fast, from the day one it is that focus. And even today, the customer feedback and everything relate to the same thing. So every cultural principle, actually, we live by it. So it isn’t just written in a document. It is just the way that we live every day.
I’ll give a couple of examples here, so we didn’t survey inside the organization, even before defining that as once we were 150 people something, what do you resonate with core values? When you think about Whatfix where you’re working for some time. So people started coming up with different words. There were words which we wanted to have, there’s a couple of words which we didn’t want to have. So that was unconsciously because we were having some cultural traits, which we will be able to promote, And some which we wanted to promote, everybody started resonating saying, Okay, I’m able to build the trust in the company because you guys are transparent.
So we continue till date, like in all hands, we share everything, good or bad. And people resonate, saying, okay, I can believe what the founders are saying, I can trust it, people started coming to us saying that, okay, I’m buying the software, because it’s cheap. Because one of the cultural traits we wanted to measure was, let’s be frugal, because we wanted to not be over-spend. It wasn’t a cultural trait in terms of buying cheap, doesn’t mean that I don’t buy inferior software or anything. So we consciously started refining, frugal, but not cheap. Go for the best in class. So we started defining those things that we want to change this. So some we wanted to change, going for the best in class, not cheap. Some places like transparency, hustle mode, hands on, which came out as a positive, we actually doubled down on that.
And what are the mistakes that you made, let’s say on hiring on culture, between 2016 to 2020?
Several mistakes actually, see half of my leadership today is people who’ve grown internally, My VP of Products or VP of demand gen or VP of sales, they’ve all been here for seven, eight years, and they’ve grown along. Some places where some of these guys couldn’t scale or some people couldn’t scale, we had to compete with the leadership from the market, So we got several half of the 50%, we recruited laterally. Now, some of this hiring doesn’t work. So internally, when it doesn’t work to scale, I can always get someone because I’ve not designated that person. So that problem is kind of sore. But when you get something laterally, as I was mentioning, one is very clear that what we are getting this guy for, and we’re solving this product marketing problem, we’re going to solve this problem or that problem.
One or two experiences where we got someone to solve a specific problem. That person was too early, too aggressive to get your part. I want to dominate. I want to become X CXO, V CXO. So it started encroaching upon other territories. So that was not a cultural review, we always believed it is one of our core values to specialize in boarding. Instead of going deep, started going horizontal, troubling a lot of other things which are working fine. We had to part ways with a couple of people like that. So this is one of the mistakes. I remember we made another mistake. Maybe not that person’s problem might be our problem as well. We assumed some kind of a motion that okay, this kind of motion of sales will work, or this kind of motion in our demand generation or product would work. And we hired someone assuming that but in six to 12 months, we realized no, this is not the right move, the person’s skill set doesn’t match how the company has evolved. We had to part ways.
And how do you figure out people who have been earlier part of your zero to one journey, Super hustlers, and once they have achieved let’s say, for example, took you from zero 10 million ARR. Now they’re not able to learn the skill from 10 to 50 million ARR. Do you part ways with them? Or do you give them other side projects?
So first, we need to even give them enough ammunition or other ways to learn and perform. So giving that option, so many people actually don’t want to grow also, they want to just solve zero to one. They want to keep solving new problems. There are a couple of people who have actually rotated horizontally in the organization, like I have created a successful business reviews playbook very, very clearly thoroughly, then go and solve my account management playbook then go and solve my other playbooks. So there are guys who are like seven years old, rotated in three different positions and they’ve been directors, senior directors and all. Then there are some guys who aspire, but they don’t have enough exposure. So we push a lot, not only for us, for our CXOs, for VPS, even for directors, get advisors and coaches. Somebody who’s been there done that before. If I’m a VP sales, I get a couple of SVPs/CROs from large companies, let’s say AppDynamics or Okta and spend a couple of hours every month and the company would pay for that. Learn from them because sometimes you know the answer, you just need validation. So you brainstorm with them, and then you get that check, okay, perfect, I was thinking right.
Now go and aggressively implement, or all those guys actually identify and show you the blind spots, a man like weldments on the line, you go to scale your team from 10 people to 40 people you don’t even have next layer, you start building the next layer now, So somebody has to show you those paths and these are some minor problems which can be solved. So having that advisor, regularly having that range of some of them or if somebody’s not able to scale, move around or even after coaching if somebody is not able to scale have a clear talk with them that Okay, let’s get a leader who is 3X better than you. Like if I have a XYZ or let’s say, Vara is there, if I say Vara I’m going to get somebody next to you, and it;s just going to be Vara plus, there’s no motivation. But it has to be Vara plus plus plus.
So get somebody, that person who is working also is excited, motivated, like this is where I’m going to work, I will give an example like one of our directors. And once we get somebody on top of the person, initially the person who’s disappointed, we discuss with them and say, Okay, you’re part of the hiring committee. If you say no, we’re not going to hire, because we want you to grow. But we feel if we get someone, it’ll be terrific for you. Very good for a company to scale up very fast in that particular department. We did a few interviews, one of the interviews, that person came out, my director came out so glowing. If I work with this guy for two years, my trajectory will change. Because the guy who we were hiring had like 20 years experience working in a large three, four companies came up with so much terrific experience, give them all these options, something will work out, So person to person, how you plan, I think it could, it could differ.
So what I see is Whatfix is more of an internal company, rather than in many of the companies that have come out of India, which are external facing. So I believe you guys would have spent like the least amount of fundraise.
Least amount of time and fundraise. So in fact, if I have to validate that Series C, series D, again, have a deck. I never hired an investment banker, all those rounds happen on their own. So in that way, you can say we have spent the least amount. But if I were to say in series A, B, we have spent a lot of time because the category was new. People were even asking basic questions. Is somebody going to pay for this? Is it a feature or a product? There’s no corresponding large company to measure this category. So there were too many hard questions and to some extent, the mistake was ours. We also didn’t know, my first TAM was $180-200 million. Today, we are talking about $20 billion. We didn’t know all the use cases. So it just got harder early on. But as we saw the traction, it became easier and easier.
So you’re saying when as a founder, you start to solve a problem in SaaS, you can ignore TAM initially?
For yourself, because for VCs, maybe not.
But was it hard for you, like you raised your pre seed from GSF, then Helium. Did it take you effort to get to helium or raise that round?
Actually, the Helium round wasn’t as effort intensive. So I spoke with Ashish when we were in the Bay Area, two, three calls. And it happened very quickly.
It was 2014. The GSF trip happened.
Series A was easier. I think Series B was the hardest, because it was transitioning from that early stage to growth stage and we had to answer all those data questions.
The early days, I think more than TAM, what excited me if I remember well, was the number of variety of use cases, because among the past 10 customers we have, every customer is using Whatfix for a different use case. That’s what excited them because they felt the TAM was actually really big, because every use case is really, really different.
Paul Graham says in one of his essays, don’t worry too much about TAM, solve one problem deep enough for that particular person who will become your champion. And there are always very large adjacent markets which you can actually solve later on.
But it’s very hard for founders because I have been there. I can tell you why. Because as a first time founder or even a second time, you go out in the market to fundraise. And VC by definition sitting on a notch higher pedestal above you, when VCs tell you TAM is not enough, then there’s self doubt creeping in the founder.
I do have, because I’ve invested in several companies and some of the founders come and say, and I tell them to narrow down and narrow down, just solve this problem, he thinks the VCs taking me the other way around but this is going to help you, do not worry too much, solve the problem thoroughly. You will make that repeatable, engine repeatable messaging and become more predictable, and can always add use cases actually. But solving for one going deep is very, very important.
I feel as long as the company has a strategy on how you grow, how do you expand across the initial segments that you’re targeting? And if that story is clear enough, it is okay. You should be able to convince anyone?
Because as you said, when in 2018 when Vispi joined you, you didn’t have the answer to how the company would be half a billion dollars. You had, it will be $100 million or so. We don’t know the path.
We will figure it out. That’s what we thought, so let’s say tomorrow somebody we talk to, they’ll say, Okay, what’s your path of one to 10 billion? Of course we have some stories, but I can’t say what’s my path to 50 billion or 100 billion. We will evolve over a period of time. So you have to at some point bet on the founders that these guys can figure out as they start working with the market and overall market landscape. Also you need to bet.
And the second part is you raised your round with Helion. Stellaris would have happened easily because it was already a stakeholder from the Helion side.
Yes. So that happened because I think we got a good product market fit by mid 2016, that Dream force and other stuff. A lot of data points were there. Alok also realized, by then Alok was not on the board. He was out but we liked Alok’s contribution so much that we used to talk to him every six to eight weeks and we said, Could you be part of an advisory board and he said, No. He had he doesn’t need to be, he can still talk to us. And by the time we got that strong product market fit and go to market fit, Alok said, I think I’m ready, you guys ready for the next round? It was like almost like a preempted, would have gone to market with a lot more but it just happened because we knew and we knew the value of what Alok brings because in prior life he was in the sales for SAP and he had too much of contribution about GTM and enterprise motions and all and it was a natural fit for us.
And if you both have to summarize, a founder usually gets stuck in one path that works for them. How you guys change paths at what milestone, or the way that you work the way you’re GTM changes. Because the best thing is finding something that works. The worst thing is just doing that only.
Once we got the product market fit and all I think we did was very religious, we also tell a lot of founders don’t make plans for VCs, make plans for yourself. So we did our annual planning and half year, we’re planning very religiously, even early on in 2017-18. Also, every time when we do the annual planning or business planning, we used to ask the question, What’s big thing we are going to do this year? And that too in most of the functions, if it’s in sales, if you’re going to do farming, if in success, what’s different.
And when you start debating, when you start going deeper, you get a lot of answers about what you want to experiment with, or what you want to try differently. And the same thing on the company level also like okay, we are doing fine with enterprise. Now, what do we do next? Have a slice this year on verticalization, maybe next year, have a slice on adding more products. So when you keep debating when you religiously or sincerely do this planning. I mean, you get really good answers. And every time your company also scales, there are more good leaders on the board. They will also have a lot of ideas. So I think doing that with sincerity and with a first principle approach, I think you will get good answers.
No, nothing else to add. We don’t plan for VCs and plan for yourselves.
Another thing which I want to highlight is you very religiously followed account plan reviews from very early on with the stakeholders. Let’s dive deep into it.
So as I was mentioning that new category, somebody buys it, they don’t know, like sales would have oversold, just by this, you’ll get an ROI, but then somebody has to really spend time with the customer, understanding their business use case from there, why they want the problem they want to solve, how Whatfix can help solve that problem, how we can translate that into requirements and get Whatfix implemented. And then quarterly basis we track, show them the ROI in the business reviews, and see what more we can iterate every two quarters in solving more problems. This sounds simple, but this gradually evolved and became a process for us. In each stage. We started having checks and balances, starting with the business case template.
I think Vara was instrumental to build that, we need to really have a strong business ROI whether it’s operating metrics we are influencing whether it’s a revenue metric risk or compliance it has to be one of these which we are impacting not just very abstract productivity, something has to be there. And then how do we measure it? So what kind of hooks do we need in our system to measure those ROI parameters? How do we communicate who should be participating in the communication like there has to be a decision maker, there has to be a business owner there and what should be my business review template?
So we gradually built a template for and then we started customizing templates for different industries and this is my customer success and review process and parallely another process started evolving after a few years, like okay, this is my this is the account currently this is my footprint account. What does this company do? What are the similar companies we have solved the problems for and what are the different departments we have actually solved? In this company? What is the budget? What are the decision makers, what is the organization map, this became my farming account plan. And then success guys and account managers started working closely to map these accounts to create those champions reuse in different departments and get referral, and it evolved in a good way.
My last question is that one great method that you implemented is that one of the co-founders of senior leaders was responsible for three or four accounts in the company, and they would go with account managers to meet the leadership.
Yes, we continue to do so now also, we call it an internal sponsorship. So every leader has a set account. So the whole idea is twofold, one to help the customer to make sure that there are no blockages for the customer and we unblock and we do whatever we can to make the customer successful. And the second other big reason why we did that. It also gave the executive director visibility to that customer to understand the customer really well. So that helped both ways. It helped customers to be successful, it helped executors to be closer to the ground.
Thank you so much. I can go on and on, on the various nuances that you have built uniquely, and Whatfix and what other founders can learn from. Thank you so much Khadim and Vara, it’s been such a pleasure hosting you on the podcast.
Pleasure to be here and hope it helps some of your audiences.
- Prime is a high-conviction, high-support investor, backing star teams with differentiated ideas. All partners at Prime work actively with the entrepreneurs post-investment to accelerate building a great company. Prime focuses on building differentiating companies whose solutions are 10X better and are powered by technology and product. Prime is now investing from its fourth fund of $ 120M and is often the first institutional investor in category-defining startups such as MyGate, HackerEarth, Niyo, Glip, Bolt, and Wheelseye. To know more about Prime visit primevp.in
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