Siddhartha Ahluwalia 1:07

Hi, this is Siddhartha Ahluwalia, your host today and Managing Partner at NEON Fund. NEON Fund has invested in the best of enterprise software companies in the last six years. I have today a very very dear friend along with me, Vijay Rayapati, founder of Atomicwork.

NEON is a proud investor in Atomicwork and so grateful to be in this journey along with Vijay.

Khadim, I respect you a lot. You have created a category among the Indian founders as we discussed. You are the only CEO who has stayed back and still managed to create a very large company in enterprise software and you have raised the bar for all the founders in India. So today is going to be a fun conversation but Vijay, I want to start with you posted this meme, you know, some time back that, you know, a VC asking founder that you are just a wrapper on LLM and the founder asking the VC you are just a wrapper on an LP. Just tell us the origin of that and what is the response you received.

Vijay Rayapati 2:03

I mean, it went viral and it become very popular. So that was the first meme I created, you know, using AI. So that, so the origin was, you know, one of our investors Z47 had global LP made in India.

So I flew from US. We had an amazing evening and we were chatting. So the conversation started among bunch of founders saying, hey, all of us are just doing wrappers.

And then one of our friend Pranay joined the conversation. So I was cracking a joke on Pranay that, you know, you’re a wrapper on LP. So that’s how it started.

I didn’t expect it will go so much viral. So not many VCs knew me before this meme, but after this, I think most people know, now I’m infamous among VCs.

Siddhartha Ahluwalia 2:56

So people love you or hate you for this?

Vijay Rayapati 2:59

No, I think people love, you know, I think it’s a, it’s a humorous side. I think everybody has a job to do. And just like founders have, you know, VCs also have a job to do.

But I think, yeah, before we go too much in it, you know, I want to say I’m a big fan of Khadim. Actually only one founder came and spoke to entire Atomicwork team when we started in the first year, that’s Khadim. After that, we have not yet called a second time, but we plan to call Khadim back.

So I’m a big fan of what he has done and how thoughtful he is. So, you know, great to be here, Khadim.

Siddhartha Ahluwalia 3:33

Yeah, just to break the ice for our audience, right? I want to start with one thing that you admire about Khadim and vice versa, and one thing you want to change about Khadim.

Vijay Rayapati 3:42

I think Khadim taught Indian founders, I mean, Indian founders know how to code in IST. They didn’t know how to close in PST. He taught all of us how to close in PST. I think he’s a great founder in terms of his humility. I think he’s very deep thinker, you know, I just love how thoughtfully he designs, you know, I think sales for him is like an engineering problem, you know, I think account management is an engineering problem. And a customer success is an engineering problem, right?

I think he has proven almost everybody. I think he broke every ceiling. Every investor used to say after 10k you can’t sell, after 50k you can’t sell, after 100k you can’t sell.

I think he’s the long standing.

Siddhartha Ahluwalia 4:30

Khadim also sold half a million.

Vijay Rayapati 4:32

Million dollar deals.

He sold a million dollar deals from India. I think it’s remarkable, you know. So I think there is so much to learn, you know, despite that most of us still move to planning to move or move to US.

So, but I think he has proven that just like you can code from anywhere, you can also close from anywhere. Amazing man, you know.

Siddhartha Ahluwalia 4:57

And one thing that you would like to change about Khadim.

Vijay Rayapati 5:00

I would like to see Khadim more in the bay. So Khadim is the only founder I meet in Bangalore. Every other person I mostly meet in the bay.

Siddhartha Ahluwalia 5:10

What about you, Khadim?

Khadim Batti 5:12

Maybe I was the only founder to speak at Atomicworks because I was probably the only CEO founder in Bangalore. And maybe I think you guys didn’t read the latest PR.

We did, of course, we did several million dollars before this, but we did the first million dollar in federal space from India.

Vijay Rayapati 5:30

Amazing.

Khadim Batti 5:31

US Army closed that deal.

Vijay Rayapati 5:33

Amazing.

Siddhartha Ahluwalia 5:34

And I was asking like what you have known Vijay, right? For a long period of time. What are the things that you admire about Vijay? One thing that you would like to change about Vijay?

Khadim Batti 5:42

So a couple of things for sure, actually, right? So one, from Whatfix experience, I’ve learned whatever we could do so far, because it was one way new category.

So new category, you have less competition, but there are other challenges. So you can enter and get those deals and all. But when we are going into the multi-product, some of the new products that we are building is existing categories.

And really admire going behind the large ITSM category, right? And so aggressive there. Similarly, like what Girish did for desk support and all.

So that part definitely, like to pick his brain, like how do you go behind existing category, large category and make a dent there, actually. That definitely. And second, serial entrepreneur.

He’s done a successful exit.

Siddhartha Ahluwalia 6:27

And one thing that you would like to change about Vijay?

Khadim Batti 6:30

Yeah, he could have stayed back to Bangalore, to give more company to CEOs in Bangalore.

Siddhartha Ahluwalia 6:38

I believe Khadim after a long period of time, you will be left, the only CEO who will be left in Bangalore.

Khadim Batti 6:43

Yeah, probably, actually, I think good…

Vijay Rayapati 6:45

No, no.

No, I think there are more people. Okay. I think, no, so I actually thought I’ll follow Khadim until I raised series A from early VCs.

But I think the borders are getting much closer, right? I think closing in IST for PST is possibility and it’s a reality. And even we have done like our first six figures and six and a half figure deals from India without even, you know, having a proper sales team in US.

Siddhartha Ahluwalia 7:28

And Khadim, when I talked to him previously, he mentioned to me that his cycle moves slightly PST. So he comes to office at 1pm or 2pm and then goes back to home at 1am.

Khadim Batti 7:37

When you do India-US Corridor Company, I think the operational challenges are one of the biggest hurdles, right? And I have seen my friends working in multinationals or other services company, like we say, burning candles at both ends. Sometimes they have meetings early in the morning, sometimes late in the evening.

So when I was interviewing folks in US and all, they were scared to work in Indian companies, there’s no work-life balance, like suddenly I will have a call late in the night and sometimes in the morning, it’s like too hard. Starting from scratch, you’re building ground up the whole operations and all, you have liberty to think differently, right? So we thought, okay, why not just push India and start as late as possible.

Anyway, most of the engineers come at 11.

Vijay Rayapati 8:16

Actually, in India, we say we give you your mornings, but our US team, we tell we give you your evenings.

Khadim Batti 8:22

We started going late. So one, two, I think that’s where most of the leaders and everybody starts in India, majority of them. And in US, we pushed as much as possible people to start early, right?

Like my CRO is in office at 5.30am, my co-founder Vara is in office at 6.30am. And we asked everybody to open up the calendar at 7am. So at least we get solid four to five hours of overlap, not only with the customers, but also mostly important with our people.

Siddhartha Ahluwalia 8:46

Yeah, I think Khadim is also known for hiring legends like Vispi Daver.

Khadim Batti 8:51

That’s why I’m here. Somebody is helping me out there.

Vijay Rayapati 8:55

No, I think he has a fantastic eye for talent. We recently hired somebody who spent five years at Whatfix. I think I met a lot of people in account management, sales management, sales, go to market, but somebody who is very ambitious, but who is also very calm.

Somebody who looked very aspirational, but at the same time, who is very thoughtful. I think somehow he has this eye for finding people. And, you know, it was fantastic.

Khadim Batti 9:26

So one way with what I have done or so far work for Whatfix is actually maintaining relationship for several years with people whom you like, actually keep talking to them, keep continuing building the relationship, because you never know, at some point they would get excited and join you actually. So even for Vispi, I think I kept on pestering him for more than a year to join Whatfix. Like several times he said, No, I don’t see this category.

And he had several reservations. I kept going back to him every couple of months. Like, I said, we’ll figure it out.

And one fine day he got pissed off and said, Okay, let’s do it. So he did several, several people like that did that, like the person he’s talking about, and we worked with him for a few years before he joined Whatfix. And several people actually who go out of Whatfix also come back.

Vijay Rayapati 10:15

Yeah, no, I think. I mean, this, this, this is something that I learned from multiple really good founders is when you want to bring somebody on board, interview is not a great process, right? Because unless you spend time with them, for a long time, you know, so even I’m a big believer that, so we recently hired our first head of finance and legal, Kailash.

So we’ve been talking to him from almost like 2022. Then we engaged, had few chats with him in 2023. Then we told him, Okay, we are not hiring, we don’t want to hire in 2024.

Then we went back in 2025 and said, Okay, come on board, right? I think it also helps both sides. I’m also a big fan of anti-interview.

So typically, when we are hiring people, we are only convincing them and telling them all good things about the company, right? How great the company is, how great the team is, how great the product is, how good the traction is. But after we give an offer, we typically discourage people from joining us.

Siddhartha Ahluwalia 11:23

After giving the offer?

Vijay Rayapati 11:24

After giving the offer, because we tell them, look, we are a very early stage. So work-life balance would be really hard.

There is a lot of risk. And I think so far, you probably thought all the reasons why you should join. Now you should think all the reasons why you should not join.

After that, if you feel you cross the threshold, then come and join. So we hired our head of sales called Eric Edmonds. So I was doing lunch with him in Vegas.

He came to see us at one of the conference. And he said, Vijay, what is this thing? Everybody in the Atomicwork team I spoke to is discouraging me from joining Atomicwork.

I said, you know, because do you really want this job? Right? You have such a good job, you know, big team, you know, big charter.

And why do you want to take so much pain? Right? Because sometimes when you prepare people for reality, when they come on board, I think they’re at the same wavelength, you know, as the rest of the team.

Khadim Batti 12:23

I think, see, if you look at the journey of any startups, right, like, it’s a decade plus, right? And there will be several quarters where things will not be good. There’ll be several other things will be really good, right?

So you want people, specifically in your core team, who believes in the mission, right? And that very hard to judge in an interview and make somebody believe in your mission, you need to date them for long. So that’s where you build the core team who are missionaries.

Otherwise, generally, you’ll end up with mercenaries a couple of quarters down, they’ll just go away.

Siddhartha Ahluwalia 12:49

And in your case, right to Vispi, Prakhar, all these guys have been for 10 years.

Khadim Batti 12:54

Yeah, so actually more, if you look at all my heads, I think the young, somebody who is lowest tenure is like three and a half years. Otherwise, average tenure is like seven to 10 years now, all my leaders.

Siddhartha Ahluwalia 13:07

Yeah. And somebody who joined as a BDR is today head of sales.

Khadim Batti 13:10

So yeah, Prakhar was the first employee of Whatfix. He joined as an AE.

Today, he heads the complete sales of North America. Srihari, who was the first top 10, first 10 employees, he now heads my global partnership. Kapil, who was my first PM, was 15 employee. Now he is my head of product. So several such examples. And also one thing which we have done, which he pointed out, was like solving things like engineering.

Some way, if I look back, I think probably I’ve done that. Like my head of sales and solution engineering, he was my VP of engineering.

Vijay Rayapati 13:46

Actually, he’s not a chief executive officer. He’s a chief engineering officer. He takes every problem and applies engineering to solve it.

Khadim Batti 13:53

So my head of success actually had never done success, right? Mohit, I don’t know whether you guys know him. So he’s a Georgia Tech guy. He was a founder.

He came to Whatfix because he wanted to do product engineering. I said, okay, you want to solve a problem, I’ll give you a problem. And I made him head of services and then made him head of global success.

So my head of CISO, my head of information security and IT and all, he was my engineering head.

Siddhartha Ahluwalia 14:18

No wonder.

Vijay Rayapati 14:20

Actually, that’s one of the remarkable insights when you look at really good companies like Amazon, Microsoft, Google, even Oracle. The leadership tenure, especially senior leadership tenure is, as he said, anywhere from seven, eight years to even 15 years. So the longer the senior leadership stays with the company, the more the company can take attacks, literal attacks, adapt to change.

Because in history, they say, right, when you’re going to a war, it’s okay if you have an army of new soldiers, but you need some veteran generals, right, who have fought, who know how to organize, etc. I think most companies, even I personally have experienced, I think we underestimate the talent that we have, we overestimate the talent that we want to bring. The board always thinks these people, this is the biggest job this person is doing, tells the founder that go out and look at people.

I think consistently, I felt the talent that has seen ups and downs, as Khadim was saying from day one, has seen the evolution of the company can actually be a much better general than even a new general who has won wars, right. I think you need some new people for sure, but ability to retain the core team for long and ability to grow some of them as he has grown is also a big inspiration.

Khadim Batti 16:01

I think the playbooks are changing very rapidly. I think everybody knows like what worked a few years back may not work today. Probably with AI first, everything again will change.

And this is not only how we build up products or how we build that use technology, but also how you do selling, how you do marketing, it’s been changing, evolving. But I think when people want to really go fast, sometimes they tend to go back to people who have been there, done that before. And those guys when they come in, they try to replicate.

Again, it’s a hit and miss actually, it works, sometimes it doesn’t work, right. But I think when you want to create a playbook, you need some kind of a space to experiment, to create that identify what’s going to work. And for doing those experiments and creating that playbook, they need some kind of a safety.

And when you are there with your company for several years, you actually become more bold in experimenting. You take more risk because you know you’ve been backed. You have your founders or the guys supporting and you’re working for a mission.

And one or two quarters, if something doesn’t go well, fine. But if it works, I’ll have a huge upside. So people, I think that’s very important if you have people who’ve been with you, maybe that example of general they will experiment, they will take risks, right. But the new guy will go with the tried and tested playbook. Maybe it works in this particular thing, it may not work.

Thin line is there, like people might get complacent. But then what we could work around for that is like for every leaders, right. As a founder, you see things from a macro, you have board, you have other guys to push you to figure out like you’re missing something.

But for leaders, sometimes that is not there. So that exposure is required. So we gave budget to every leader that they can hire their advisors and mentors who’ve been there, done that in the industry.

Because probably they’re doing the right thing. But if they’re doing for the first time, they need to bounce off that and just get that confidence. So almost all my leaders have one or two industry veterans as advisors, like my CRO has another CRO as an advisor, my CISO has another CISO as an advisor, my HR guy has another HR, finance guy has a finance guy.

So that what you don’t know, you don’t know, I think that gets covered. That’s the biggest piece actually, which hits when somebody is not able to grow.

Vijay Rayapati 18:14

But I think what he said is so true. I think leaders who have psychological safety, always play the bigger game. If they’re complacent, anyway, the churn will happen naturally.

But I think psychological safety is very, key for leaders. It’s a lot more important for leaders, because then they will not take the boldest risk. Typically, everybody is trying to impress the CEO, and the CEO is trying to impress the board, right?

And when you have some of the people, I think one is psychological safety, as Khadim said, is very high, so that they can actually take bigger plays, bigger risks to try, they will fail in some. Second thing is also they will be very candid with founders, because they have been there for early days. If you do something stupid, they will tell you it’s stupid.

But most new executives, they tell you founder, what an amazing company you built, how great you are, how thoughtful you are, and how smart you are.

Siddhartha Ahluwalia 19:18

And when they put paper after eight months, the founder asks them, it was such an amazing company.

Vijay Rayapati 19:24

So, yeah, I mean, actually, somebody said, I don’t know who said this. Somebody said, most companies get destroyed after IPO. Because in the preparation for IPO, in order to make the company big, we bring like a lot of these new leaders.

Most of them turn out to be mercenaries, not missionaries. And it’s amazing how many of them are worried about stock price on a day-to-day basis. Forget about an engineer, if an engineer is worried about stock price day-to-day basis, you can understand.

But at a CXO level, people who have been CXOs twice, they come to a third company as CXO, still worried about stock price. In Nutanix, I had like one of the policy was, I had auto sell almost every quarter, irrespective of stock price, because you don’t want to waste so much of your time and conversation in that. Somebody can look at me and say, what a mercenary, this guy is like, you know, not holding the stock.

The other way to look at it is, you know, the guy really doesn’t care, right? You know, about, you know, whether you do 30 bucks more or 10 bucks less, eventually it will even out, right? One of the things, even at Atomicwork we do is, even this year, right, we bought like a bunch of CMOs to come and talk in our leadership meeting about how did they, what did they do when they went from this tiny company to big company, right?

They were a CMO, they didn’t have budget, they didn’t have brand, they didn’t have dollars, they didn’t have recognition, they didn’t have unlisted coverage, you know. Now, we are actually bringing a bunch of CPOs to come and talk to the team, almost everybody. And then as he did, I have actually onboarded a good market advisor, somebody who’s been a CRO president.

And he said, I don’t want any cash, but I said, no, you should actually take some cash so that I have a right to text you and call you when we want. And I tagged him with our new head of sales. So that way he has time, right?

And similarly, we are actually bringing somebody as a product advisor, right who’s been a CPO at like two really, really good companies, right? And then I have a CEO advisor called Sunil Potti. He just retired from Google. And we are not giving him stock or cash, but Sunil was my boss when I was at Nutanix. He’s one of the amazing product thinkers.

And such an insightful guy, you know. Recently he told me, Khadim, you know, like the time to value for a product to prove time to value. Typical enterprise products a decade ago, right, had 90 days. So most POCs are like, whatever, six, eight weeks, even 12 weeks. Then we said, hey, we need to condense this, you know, bring it to whatever, three, four weeks.

But if you look at in the AI, most products are giving the value, the proof of value in the first five minutes to 15 minutes. So he really challenged me, you should think deeply about how do you show value in 24 minutes, not 24 days, right? And so I do talk to Sudheesh Nair, you know, who is just stepped down as a CEO of ThoughtSpot.

He used to be our president of sales at Nutanix. And I connected a bunch of CTOs with all my engineering leads created on WhatsApp group. And I said, okay, you guys have to continue to talk because I think we underestimate, we underestimate external perspective sometimes because we are so much in the moment that, you know, even though, even if you are outside that situation, you might be able to spot the things, but if you’re in the situation, you won’t be able to spot the things.

I mean, I can’t emphasize, you know, I mean, you don’t need like an army of advisors, but every leader need somebody who they can go to in confidently, in confidence, get confidence. Otherwise, as CEOs, you know, we are mostly in a hurry, right? However good we want to be with our team, we are more or less pushing them, you know, and it’s very hard for leaders also to operate, right?

So sometimes my team thinks, I have somebody who messages people at 2am and 4am, no, I wake up for 30 minutes and just, you know, follow up, you know, with folks. And we are generally, our founders, right, are like very, I think very few founders are like super friendly to their teams. Most of the time we are pushing the team to the brink, you know, constantly, right?

And I often tell them, you know, if you really feel like you can’t negotiate with me, I think talk to, you know, this person, right, who could be your advisor. And I think it’s so true. Actually, at some point Khadim should write a book that should become like a founder’s playbook, not SaaS playbook, not GDM playbook, you know, founder’s playbook.

Because founders have so many advisors, even though they may not be advisors, like your investors, your board, your fellow founders, you know, constantly we are learning, we are exposed, right, to so much information, so much insights. So, your learning loop is much faster. But a lot of your leaders are actually doing the work, as he said, he’s here because somebody’s doing the work, same applies to me.

They’re in the world constantly, they’re just doing the work. You know, they don’t have as many opportunities as we have as founders. So we need to be thoughtful and create them.

Khadim Batti 25:01

Sorry, just to add, like, if you just by all means simplify this, like, what happens if CRO or CMO or one of your leaders doesn’t meet their target for two quarters, board will ask them to fire.

Vijay Rayapati 25:13

Yeah, right.

Khadim Batti 25:15

But it’s founders, it’s been always asked, like, okay, think big, think long, right, take that big steps, bold steps, right.

But those steps can’t happen in two quarters, right. So when your CXOs are measured for just two quarters, if they know two quarters go bad, they’re chopped, right.

Vijay Rayapati 25:32

Max they get is four quarters, most of them are measured in one quarter, not even two.

Khadim Batti 25:36

So what happens is, whether they subconsciously or consciously, they start incurring themselves that I cannot go beyond two or three quarters. And some of those steps what they take are very short sighted, right. They don’t build that foundations very strong.

And that’s why you see, right, I think of the whole valley thing. As soon as that money was stopped, everybody’s got plummeted, right. It’s like grow at any cost, just throw money, right. I say throw $2, I’ll get $1. So fundamentally, when you ask them, okay, now you have to be efficient also, you have to grow also, you have to retain also, you have to show value also, you know, I’ve interviewed so many CXOs, most of the CXOs quit when that funding was stopped.

Vijay Rayapati 26:18

That is so true

Khadim Batti 26:18

They couldn’t work without those constraints. They couldn’t work with those constraints. So when your CXOs are actually they know that they’re going to be chopped in two or three quarters, they start taking very short sighted steps, actually, which is harmful in long run, maybe short run, it might show some results.

But founders have that luxury, right? Two quarters doesn’t go well, you’ll be going back firing a couple of CXOs, getting new CXOs again, go back to board and saying, okay, two or three times, you can do it probably right after that. But you have longer lifeline compared to…

Vijay Rayapati 26:48

The buffer zone for founders is much longer than most leaders who come to companies.

Khadim Batti 26:53

So it’s very important to have those CXOs actually who believe as we were again, going back to that, like they are they believe in that mission. And if they are short sighted, they will always think, after three years when I quit, what happens to my career? What do I put in my profile?

What I’m going to say in the next interviews or jobs, but the missionaries are the ones which you anchor them like, boss this is probably your last job.

Vijay Rayapati 27:16

Yeah, right.

Khadim Batti 27:17

After this, you should be only advisor or you do something else. You don’t have to work for leaving, you need to work only for fun. So they think long, like, okay, how do we get this company to 10 billion, which is going to be like, I can also retire.

So I think that whole mindset has to change to take bigger steps to take bolder steps, that psychological safety, what you mentioned. And so though, not only for founders, that if founders cannot do it alone, they need that team also to think similarly.

Siddhartha Ahluwalia 27:44

They need their investors also to think like the same way.

Vijay Rayapati 27:46

Yeah, I think, look, Khadim has found great investors. So I think he’s, I think he, a lot of, I think I spoke to a couple of his board members, they really love him for how thoughtful he is. At the same time, how aggressive he is, how much he wants to change the status quo at the same time he wants to de-risk the change.

I think sometimes we learn through experience, but yeah, typically, I think when we, there are a lot of mercenaries, both in India or Valley, it does not matter. They’re good for a battle, but a startup is like a war, it takes a decade to win. It’s not like one battle you go, win or lose, but you also want people who are willing to learn.

What happens is when you bring these people who have such a short tenure in their head, because they know that the board is going to judge. The first board meeting, welcome on board, and it’s all great, awesome. In the second board meeting, it’s like, okay, where is the data?

Where is the growth? And they obviously get very jittery. I think founders can give confidence, create an ecosystem, but I think the founding teams, when they grow along with the company, just like as founders are growing with the company, I think amazing companies could be built.

I think probably he has the longest tenure in leadership compared to most companies. No, it’s actually true Khadim, most companies, the tenure of senior leadership is less than three years.

Khadim Batti 29:18

That’s right. I think one part which people miss actually, even in the boards and even in some of the time founders also, and they keep replacing the CXOs. On the paper, you have an org structure where there’s a CXO, there’s a VPs or there’s a directors, you think you remove the CXO, get a newer CXO, things should work theoretically.

But it doesn’t, the whole tree shakes, you might start losing good people who are with you, because there’s a leadership change, the orientation has changed or thought process has changed. And again, getting back to that shape, even what it was performing, I think it might take a lot more time. So the collateral damage people forget.

Vijay Rayapati 29:55

Actually, IPOs do most collateral damage to companies, because you bring a lot of CXOs.

Siddhartha Ahluwalia 30:00

So don’t take company public, that’s the order.

Vijay Rayapati 30:02

No, actually, not don’t take company public, I think, be confident to take a company public and while retaining a lot of your founding leadership.

Siddhartha Ahluwalia 30:10

With your existing leadership rather than bringing in…

Vijay Rayapati 30:12

At least like if not more than half of your leadership does not come organically, then you have a problem. Because then the rest of the new leadership does not know how the leadership in this company behaves and operates. If they even if let’s say you have 10 executives under you, if five, six of them came organically, if they operate differently, this new leaders will also adapt.

End of the day, we are all social animals. I’m trying to learn from Khadim, Khadim is like trying to learn from someone. And so we adopt faster.

I think organic leadership is such an underrated thing. I think on paper, everybody is amazing, right? I mean, these days, I get amazed, you know, somebody spends less than two years and says, I took this company Unicorn.

And I typically believe in what Karthik Reddy of Blume says unless you spend three years with Bloom, you know, I don’t think, you know, you have actually been part of the Blume yet, you know, they have this, I think, ceremony, I think informal one to say, if you have been with the Blume for three years, then, you know, you’re really contributing, because it takes a year for anybody to figure out the company, a year to actually take bets, and year three to really deliver value. But these days, look, everybody is like, GTM at whatever, OpenAI and GTM at Anthropic.

And people say, in six months, I have took the company from 10 million to, you know, 60 million. And I tell them, you should be a founder. You know, if you really have that skill, you should be a founder, you should not be, right?

Because you have some magic sauce that you don’t have. So, yeah, even my philosophy is build a lot of organic leadership. I think great companies had amazing organic leadership.

Even now, you go back and look at SVP tenure at Amazon, or a CXO tenure at Microsoft.

Khadim Batti 32:12

Any large, any large enterprises, right?

A lot of organic leadership. Why to even go there, like, look at our companies, like we have 10s of billions of dollar companies, right? TCS, Wipros, Infosys, like they all build organic leadership.

And they did phenomenal work.

Vijay Rayapati 32:23

Phenomenal work. And the founders rotated for different jobs, as you were saying, somebody who’s running HR went and ran delivery, somebody who ran delivery went and even ran finance and hiring university. Yeah, I think some of those things, I hope, you know, we go back to roots, you know, instead of like this new playbooks, right?

I think a lot of new playbooks are shitty playbooks, honestly. Or anything, anyone who says this is a great playbook that we figured out in like last three years, is not a well-tested playbook, it’s not a time-tested playbook. But things that have worked, you know, most likely to work.

That’s why they say if the company has survived for 50 years, most likely that company will survive for another 50 years versus somebody who’s been around…

Siddhartha Ahluwalia 33:12

I think you congratulated Microsoft on surviving 50 years and being the leader.

Vijay Rayapati 33:15

I mean, it’s amazing, right? We actually did this small campaign, Khadim. We created a, you know, a congratulatory message. Because think about the company went through four, five massive changes.

And hyper growth, the best company in the world to, okay, this company will not survive to now being, you know, the most talked about company. It’s not easy, right? I mean, it’s so hard to build a company for 10 years.

I can’t even imagine, you know, what it takes to build for 50 years like Tata’s in India, like 100 plus years institution, right?

Khadim Batti 33:52

One of my professors told in my college, right, and this was like 20 years back of Microsoft. He said, Microsoft always misses the bus. But they run fast, get into the bus and get to the driver’s seat.

I think it happened again in AI.

Vijay Rayapati 34:10

Yeah. I think that’s the power of install-based, Khadim. See, the power of install-based…

Khadim Batti 34:14

Not only, of course, they have that distribution mode. But along with that, they have also built that agility and that alignment, the whole organization goes behind that mission. And they move so fast on those.

Vijay Rayapati 34:26

I mean, like, look at the number of leaders who put messages. Jeff Teper, who is the president of M365, Microsoft 365, started as a SharePoint developer. I think he was like, you know, created the SharePoint to, you know, running a division to Srini Raghavan to so many CVPs, so many presidents are with the company for 20 years to 30 years, right? More than half of the journey of the company. I mean, it’s amazing, you know.

I mean, I recently saw one EA, I don’t want to name her, she’s been with Microsoft for like 36 years, right? She probably knows, you know, every technology executive ever met their executive, you know, and institutional knowledge of, you know, who is important, who is not important and, you know, whatnot. Yeah, I think in this world of AI, which is rapid change, I feel we should reflect back on what are those timeless things, right?

Organic leadership, as I said, is an amazing thing. Psychological safety. And even like providing that growth opportunity through mentors are very key.

From a very early stage of company, you know, what I really like about Khadim is, so you meet a lot of people, right? So first time you meet some star founder, you get really impressed. Second time you meet, then you think, okay, he’s okay, same level.

Then you meet fourth time, you think, how did this guy become successful, right? But I think some people are so thoughtful in every interaction, you feel like you’re learning, you know, I think Khadim is certainly one of them.

Khadim Batti 36:02

It’s like becoming too much about me.

Siddhartha Ahluwalia 36:05

Khadim, one interesting point is like, you have really demonstrated that humility works. So how are you able to hire humble folks in your company, because there’s a very thin difference between when performance can be replaced by arrogance.

Khadim Batti 36:21

So I think he already mentioned that like when people join, right, they try to adapt. Yeah, right. So culture, right, like what is culture, but if you are a very small company, let’s say 15, 20, 30 people, you have not defined culture.

So the culture actually starts reflecting what how founders are behaving on the floor, that becomes the culture. And then it starts percolating down, your people start imitating that, like, okay, if as a founder, if I want to be ruthless, and people know that I like that, and they want to be imitating that. So it starts percolating.

When you start scaling, there are some cultural, like, what do you call that subculture starts getting created, but of course, majority part actually gets reflected. So I think if you can maintain that culture and keep aligning people, I think overall, it starts building in the same direction, right? I think there are some companies with a DNA of being very aggressive.

There are some companies which are very thoughtful or innovative, because that’s all actually percolating over several years and the culture gets built. So I think just focusing on that, keep aligning them and keep looking at that. If I have to give one example on culture, for example, like, when we started in 2014-15, money was not that easy to come by.

So we had one cultural trait. So we did some, we did survey in the company saying that, okay, what do you feel when you think about whatfix and the founders and all. So one word came very frequently was frugal.

Because they, they realized that okay, founders don’t want to spend too much. It worked fine for first few years, then it backfired. Because I remember one of the days, one of my directors, someone came to me in 2017 or 2017 or 2018, saying that, Khadim I want to buy this software.

And Khadim this software is very cheap. And now, by that time, we had a Series B, we had 20-30 million dollars, 40 million dollars in bank. I don’t want to buy cheap.

I want a software which is the best, which can help us actually to move really fast. I said, like, why this software? Why not the other one?

Which I know, this is an industry leader. He said, no, that is expensive. Now, that backfires my culture.

So I have to consciously now change the culture. So we maintain, we change that frugal, but not cheap.

Vijay Rayapati 38:32

Yeah. Yeah.

Khadim Batti 38:33

Right. Today, we again change after a few years. Everything we do is best in class.

So you some of the things you consciously evolve as well. So as I was mentioning, like, the way we behave on the floor, the frugality, everybody started imitating, but some of the places it was not required to get reflected on the activities, what you do on the ground.

Siddhartha Ahluwalia 38:56

And Vijay, coming on the culture, right? You absorbed a lot from Dheeraj on building culture.

Vijay Rayapati 39:02

Yeah. I think one of the amazing things is a lot of us think the hunger and humility cannot exist, but actually they can coexist. Right?

You can be very ambitious, right? At the same time, you’re very humble and, you know, you can operate with heart. I think suddenly I learned that, you know, that, you know, with Dheeraj at Nutanix was, I think, raise the ambition, right?

Let the world say whatever it wants to say, right? So naysayers will always be there saying this company will not succeed. Why are they doing like really old thing?

And actually Nutanix started after public cloud was already a thing to build a private cloud, right? And even today, you know, it trades much higher than most SaaS companies on the market. Eventually products wins, right?

And the product comes from certain core principles that you institutionalize, right? So we want to be, you know, we want to have, right, this high ambition and at the same time, you know, operate with heart and operate with humility and, you know, be honest, right? So the Nutanix culture was like very simple, you know, even at AtomicWork we call atom culture or atomic culture.

So hire people who have high agency and operate teams with high agency. High agency is about desire to be self-directed, right? So you’re not looking for too much direction from, you know, everyone around you, right?

And you cannot operate with, you know, high velocity if you don’t have trust. So the T stands for like trust and O stands for ownership, right? The owner’s mindset, which he spoke about, right?

We want people to operate like frugal, but that does not mean you go for the cheapest thing. You know, you still go for the best in class, right? You think long-term and say, does it really add value for us?

And our industry, the craft is very important, right? As more things get automated, the experience matters. So mastery is like a big thing for us.

So ATOM is like agency, you know, trust, owner’s mindset, and mastery. Do they have desire to get better at the thing that they are doing? They may be great at coding, but do they have a desire to write even better code?

You know, whatever, they may be good at pitching, they could be good at, you know, this. That’s how we started. And then we realized two things are missing from it.

You know, this is team centric, you know, individual centric. We said we then got INC, which is atomic, impatience, right? Our industry does not have respect for patience, right?

You got to really move fast, okay? Because if you don’t disrupt yourself, you know, then somebody else, you know, somebody will for sure will disrupt you. And then customer obsession, right?

Because at the end of the day, we show up at work to deliver value to a customer through all our work, right? And, but we’re a small team, you know, we’re like 50-60 people right now. But one of the things I always tell people is velocity is the oxygen for a company, you know, in the early stages, right?

The faster you operate, the better oxygen, it’s the oxygen for the company, you know? And I think one good thing we did was we went and picked people thoughtfully. The first 25 almost came from the network, next 25 more than half came from the network.

Now we said, hey, we should also bring people who are not from the network, otherwise it will become too much of me too, right? Me too in the sense same thought process, etc. And, but look, human capital is also very efficient.

We can’t hire hundreds of people. So, we have put some caps saying, okay, we are not going to cross this cap until we get to certain level, right? I also have upper cap, you know, of triple nine for the company saying, okay, we are not going to be more than triple nine, you know, because we also have to build very human capital efficient companies.

Otherwise, if you also go, you know, get to 5000 people, get to whatever 600, 800, it’s a nightmare, right? The market will not respect because there are so many incumbents at the same stage, right? The more people you have, the more problems company will have.

Actually, throughput goes down, the more people you have, you know, somebody said this, I forgot, in a 10,000 people company, the square root of 10,000, which is 100 people are doing half of the company’s work, which is more or less true, by the way, you know. So, I think it’s super, I mean, one of the amazing things, a lot of people said, are you stupid? Why did you start?

It’s so painful. You could have been a VC, you could have been whatever. But there is so much joy in seeding things.

I think you get like, I get at least a lot of satisfaction. I think there is an amazing opportunity now to build products, to build, you know, like do a lot of new things while holding a lot of core things, you know, which are timeless.

Khadim Batti 43:58

Being VC is not easy as well.

Siddhartha Ahluwalia 44:01

Super tough.

I have been a founder. Being founder was, I can say, much, much easier.

Vijay Rayapati 44:05

So, Khadim, I’ll basically tell you, I think every job is hard, right? I think. Anything you do.

One of the, GE CEO, I forgot if it is Jeff Immelt or somebody who said, every job looks easy when you’re not doing it. When you are doing it, then you know how hard the job is, right? But I think VC gives a lot of skills, but it also takes away a lot of skills from you, right?

Foundership gives you a lot of skills. It also takes a lot of skills away from you. I’m brutal, like, you know, I have two young kids and I spend very little time with them because of this constant travels, right?

And somebody who loves traveling, it may be a great thing. You know, I don’t really love traveling, but I have to travel because, you know, I mean, like, I probably did like 16 trips last year to US back and forth.

Khadim Batti 44:51

It is part of job now.

Vijay Rayapati 44:52

And see, he still has some black hair, mostly my hair is white.

Siddhartha Ahluwalia 44:57

For Khadim to have black hair, somebody in his team must need to have a gray hair.

Khadim Batti 45:02

Many. So I think just to add, actually, because we’ve been talking a lot about growing team organically, like it should not be also taken that there’s too much of complacency. There’s a status quo.

So let me give a couple of examples like, I’ll take Whatfix example. So we do ask these questions every two quarters. All the leaders who are there currently, they might be for doesn’t matter how long.

Are they still true? Are they still right leaders for that particular job? Just to quote some examples.

Like, we even have instances, I don’t know how many Indian companies have demoting people, because Indians are scared to demote, they will fire. Because there are some people who we would have promoted because of XYZ reasons, but they are not able to perform at that level. Can they go back?

Of course, a lot of people don’t take it and they quit. But there are some people who say, probably that’s the right thing for me.

So we have taken that those steps. I don’t know, but probably we are one of the very, very few or one of the first SaaS companies to call people back for five days office.

We did like three years, two and a half, three years back. And I’ve been propagating because we believe it is not going to work. Every leader opposed this or every director was opposing that nobody’s going to come back.

Nobody calls. Today, everybody’s calling back.

Vijay Rayapati 46:18

Yeah, absolutely.

Khadim Batti 46:19

We did that same thing in London office and San Jose office five days.

Vijay Rayapati 46:22

Yeah.

Khadim Batti 46:22

Right. Because sometimes you have to take those steps. One of the complaints I of course, as a even though we are doing fine, we still have a lot of attrition.

Like there are the people get tempted, people who get series A, series B, they poach. I’ll get some good director from Whatfix and make him the leader. One of the complaints what people have at Whatfix is too much of change.

So even though we have that good amount of leadership there, but we push so much of change and so much of velocity that they have to change the processes, they have to change the style of working every 6 to 12 months. And many of the people could not couldn’t adapt to that and they quit. Right.

And so, so then another thing which I just got, got inspired by Gokul Rajaram, right? We, we abolished designations.

Because what happened, everybody was asking, I have spent two years in my position, I want to get promoted. Now spending two years in your position doesn’t mean you need to get promoted. Promotion means you need to take more ownership.

So how do we change that ownership part? So we removed designations. We said, okay, it has to be role based, right?

Like how you take ownership. If somebody is a head of content, doesn’t matter now the person is director or senior VP or VP. Why should I change unless that person takes more ownership?

So I think we are seeing gradual change. In last one year, we brought this. Of course, there was a lot of pushback because everybody wants to be glorified some designations on LinkedIn.

Now people are asking, I’ve seen several folks coming back in last six months saying, what else I can do? I am head of XYZ or I am leading this particular mobile platform. Now, if I have to go to next level, what do you think I should do?

Now they’ve stopped asking, saying I’ve been spending two years doing the same thing. Of course, I’ve done well. Now you promote me.

Now it’s ownership first and the promotion or designation or role change would come later. So very bold such changes we have done, which generally I haven’t seen many US, even Indian companies or even US companies.

Vijay Rayapati 48:24

I think he said a beautiful thing, which is there’s a constant change. You know that’s why WhatFix is successful. I think most people cannot take change. Even early teams, founding teams cannot take change. I think one of the thing I often almost repeat myself, telling myself that repetition does not spoil the prayer, which is we not only have to build AI native product, we have to build a native company where human capital has such a high premium. Because if we don’t instill some of those things very early, then the problem with these designations is, I mean, it’s so funny, once somebody told me, I think you should take, you should hire like another 30 people in your group. I said, why? Because VP should have 300 people in their group.

I was like, OK, but, you know, people cannot be proxy, right? Because the moment we create these layers and hierarchies, people tend to hire more people. So they know that, you know, once I have 100 people, I can be a VP.

Once I have like 500 people, I can be SAP. You know, it typically the platoon culture, right, which is OK, you’re a squadron leader once you have a squadron. But I think that world is changing dramatically, right?

With AI, it’s, I believe, I think we will have like this individual managers who are doing IC work, managing a lot of this AI.

Siddhartha Ahluwalia 49:59

Managing agents.

Vijay Rayapati 50:00

Agents. And that’s a reality, actually, you know, I mean, we, one change we just recently did. I’m a big believer that engineering pods, product team pods are a very good structure. So we had this typical 8 to 10 people thing.

So recently, we broke that and said no pod can be more than 3 people. One really senior engineer, one senior engineer, one junior. That’s it.

Everybody else has to be in AI. There’s a lot of pushback and whatever. But I think now people are saying, thank God, we don’t need to spend one hour in status meeting every day.

It’s only like five minutes, right? And they will also have high agency, right? Because now the surface area is, hey, we can do a lot more, you know.

Otherwise, like even a 50 people team, I don’t know who is exactly working on this. So I mean, I have to give a feedback. I’ll give it to, you know, product manager, the product manager gives it to inch pod, inch pod gives it to the inch lead of the pod, gives it to the engineer.

Now I know who are the persons you directly ping, right? And if you cut through layers, I think layers kill company. You know, one of this Bain senior partners, he wrote about founders mentality.

It’s a beautiful video also, it’s there on YouTube. And one of the beautiful thing he says is, you start, growth comes, growth creates complexity because you hire people, set up processes, bring products, and complexity kills growth, right? That’s why companies die, right?

Yeah, basically, complexity actually kills the growth. So the first killing is it will slows down. Second killing is it will make people so complacent.

Third thing is, you know, you actually don’t grow, you are regressing, and eventually companies die, right? He says, in order for you to escape that loop, you need to figure out this founders mentality in the business, right? Founders mentality does not mean they need to be a founder, but people who have high agency, high hunger, can operate with high velocity.

He has a beautiful thing. And I’m a big, we are actually a big fan. I got introduced to that concept at Nutanix, saying, you know, we need to be, we need to have founders mentality, because founders can only be one person, three people at max 10.

But founders mentality or founders mindset could be there an entire company.

Khadim Batti 52:11

I think it’s not easy as well, like, of course, in spirit, you want everybody to have that mentality. But what happens when you start growing as a company, when you have 800, 900, 1000 people, I think a lot of people, when you go as a lower in the hierarchy, they start working for appraisals, right? They start working for the KPIs, what they define, right?

I’ll give an example, I think, recently, you would have seen last two years, a lot of middle management getting fired in large companies and all. Now, we also went through one exercise where we said we also want to reduce the hierarchy, because agility is not there. If you have too much of hierarchy, like I got frustrated in between, like when I wanted to get some decisions or some things to be executed.

The by the time it goes down and come back, like it’s like one and a half months to a month. Yeah. Because there’s so much of pushback, so much of debate, so much of discussions.

And I said, Okay, we need to, we’re going to flatten it, right? Now, how do we flatten it? So now, as an organization, you just like 100 people, you can say, okay, there’s five people are not required, or you change, you change them to different teams, or you restructure or something like that, then you start making rules, right?

You will start making rules saying, Okay, you need to have minimum three people or five people or eight people pod. Otherwise, you’ll not become manager, you if you don’t have three managers, or four managers span of control, then you won’t become director. If you don’t have four directors, you don’t become VP, just giving an example.

It works probably in a year or two, because now you don’t need too many directors, you need to justify that, okay, there has to be enough work in all because now that’s thought process intent here is that, okay, people will ask for more ownership, I will have more work, then my span will increase, and then I will get promoted or I’ll move on. At some point, it just happens that people create work. You unnecessarily as you’re saying platoon culture, right?

Like you start building your platoon or hierarchy, because you want to get promoted. So you create something which is not required. So the thing, so that structure, what is the intent, what you created, like, okay, you need to have span of control to grow, because at that particular point of time, you wanted to solve that problem.

But then people start working around over a period of time, you have to again change. So I think the change is constant, what worked today, probably will not work tomorrow. And you have to constantly relook at it again, and again, and again.

Something probably like we say, might not have worked for XYZ company, in that particular variable constraints in that particular time period in that particular velocity of the structure of the company, it may not have worked. But for you, the dynamics might be completely different. You might have to experiment that.

But again, as you go the journey, you have to keep thinking. So a lot of first principle thinking is required doesn’t matter you have people who’ve been there done that, or you have seen or you’ve heard a lot of founders, you will have to keep thinking because your variables will be different.

Siddhartha Ahluwalia 54:52

And Khadim, one thing is there that you built Whatfix over a period of 10 to 15 years, do you think founders today have luxury of that kind of a time? Because the ecosystem first is nobody first believed in digital adoption, right? So first, it was first five or eight years, what about surviving, and then it was about growth.

Khadim Batti 55:13

So it’s been 11 years for us now. I took four years to get a million dollars.

Vijay Rayapati 55:20

I think the longer you take to get a million dollars, the better company you’ll be.

Khadim Batti 55:24

No, but today, if you probably if you take million dollars, four years to get a million dollars, most of the VCs would write you off, right? So, see, a lot of variables have changed, right? If I start today, probably I will have 100 or 200 companies as a potential design partners, if I can get to and convince three or five of them, I can validate and get to PMF very quickly compared to what, at that point, when we started, nobody believed we can do enterprise sales in US.

Everybody used to ask the question, okay, which category this is, what’s the budget or time of that category? Who’s appraisal gets impacted with this particular category, right? The questions were asked with somebody who’s going to pay $100 for this.

Okay, so now, that conviction of building a category, conviction of selling large ticket size to US playbooks been established. So probably that that maturity of the ecosystem also helps you to cut down a couple of years, probably, right? Because you don’t have to relearn everything.

So because of that, also, the patience has gone down, right? Like even VCs, or even the founders, if they don’t get to let’s say, a million dollars in a couple of years, probably half the time, people feel something is wrong. But I would say, I think it doesn’t matter.

My personal, that’s my personal opinion. It doesn’t matter how fast you get to first million, because you’re figuring out the product market, right? You might have to do one pivot, two pivot, you need to find out the right segment, right pricing point, value delivery, product iterations, etc.

But once you get there, it’s all about GTMF. Have you figured out your go to market? Have you figured out the skill channels which can scale?

And the more dollars you throw, it has to scale fast. So from there, journey has to be more predictable.

Siddhartha Ahluwalia 57:04

And what about, you know, when the founders are fighting to build a category, let’s say you both are sitting at opposite end of a spectrum, you are building for the largest possible category, and you have created a new complete category. What about that?

Khadim Batti 57:20

So again, so even for the new category today, I think the fundamentals are still more or less similar, like even he would have started AtomicWorks, he still need first few design partners, because he still would have a differentiation compared to the existing players. So he needs some initial believers, even for new category is the same thing. So I feel getting those initial design partners have become much relatively much easier, or you have bigger pool actually available today.

So at least that PMF journey today can be faster. Doesn’t matter whether you’re existing category, new category.

Siddhartha Ahluwalia 57:49

And if you reflect back, what was the thing that you reached the first mill ARR in four years, let’s say by 2017 or 2018. But in the last seven years, you would have been among the top five fastest growing companies from India in enterprise space.

Khadim Batti 58:03

Yeah, probably, I don’t know much about the numbers. But yeah, that’s what been told, like we are still growing reasonably well. So that’s what I’m saying, like, once you figure out your product market fit, and you have figured out few channels, then you keep evolving, right?

Also, you keep actually the more dollars you put it in your engine, and if the engine is able to scale, you can continue to scale in terms of ARR. One thing which companies get stuck, like, for example, some companies get stuck at five. See, there was one good statistics, like among the companies which have venture-backed, minimum $3 million, only 1.6% companies reach 100 million ARR. Yeah, why is that many companies get stuck at 60s, 40s, 20s. See, I’ll talk about enterprise. Anyway, you guys also in enterprise, right?

When you start, probably you are okay to do 10k, 20k deals, right? We even do $1,000 deals. But when you are now getting to 100 mil, 200 mil, you need 8 million, 10 million quarters.

Now, you cannot get, let’s say 80, like, 100 customers or 1000 customers every year at 10k. You need to start getting 100k customers. At some point, you need to start getting 250k or a million dollar customers and multi-million dollar customers.

Now, when you change the orbits of your ACVs, your buying persona or the budget owners also change, your decision makers also change. For a million dollar, probably for 20k or 50k or 100k, you might won’t even to go to VPs or for 250k, a million dollars, 2 million, you might won’t even go to CIOs or CDOs or someone at CXO level. Now, I can go to a manager operations or someone and say, okay, I’m going to help you improve your Salesforce productivity or ERP productivity.

100k, 50k fine. If I go to say, okay, I’m going to charge you $2 million for the same problem statement in the check goes for signature to CIO, isn’t that a big problem enough? So, my product market fit now has to change because I am going now, my buyer is different, the budget owner is different.

Now, the problem statement also has to evolve. So, the problem statement, instead of solving that one application problem, which I was getting 50k, 100k, now I have to evolve my stack. So, initially, I was solving web, mobile.

So, I was solving full stack adoption problem, then added my analytics and all to measure. And my problem statement involves saying, I go to CXO and say, okay, I’m going to give you the ROI of a whole of your software stack investment, which spends to several hundreds to billions of dollars for a large enterprise CIO. So, okay, fair, if I’m spending $500 million, maybe three, four, $5 million, I can spend because I’m going to derive ROI on that.

So, but to answer that question of a CIO, my product or my suite has to evolve. So, I think as the founders want to change that orbit, they need to keep rethinking how my product market fit based on that persona also has to keep evolving. And if they do, probably the journey might have less hiccups.

Siddhartha Ahluwalia 1:00:52

Yeah. And as Vijay said, you are one of the most thoughtful people in the enterprise space that I have met. So, how much as a founder, you keep your time divided between, you know, this evolution of the company versus the execution phase?

Khadim Batti 1:01:07

You see, I follow a principle called management by exception. So most of my people know, right?

If I’m not asking questions, if I’m not poking nose, I think things are working fine. If things are not working fine, I deep dive a lot, right? So that’s why it’s very important to build that trusted leadership who can actually also keep evolving and keep running that function more smoothly, so that you are free to actually look at what you’re going to do as a company, going to evolve in the next two to five years.

So you can build your organization, you can get new leaders in place, you can experiment more stuff, you can actually go and talk and validate the bigger problem statements and all. So that’s what I do a lot. In December, when I went to the US, the trip specifically was, I didn’t even go to my office, actually in Bay.

Actually, I was just on the East Coast and just meeting all pharmaceutical companies, life science companies, because I wanted to build an industry playbook. Met so many CIOs there, and came back and just changed a lot of things because of that. So if I was actually putting too much of time on my operations and processes, maybe I would not have been able to do that.

So at some point, some things break broke as well. So I went so deep into rebuilding that particular department processes. And I went to a level where I started sending mails directly to ICs of that department, which was 200 people saying, Okay, I need to report from you every week.

Because now I feel that has to be fixed. So I feel the founder also has to be very agile, like they can zoom out and look at the large problems, investigate in the market, come back and change that strategy or something, as well as can actually zoom in so much actually that you can go to IC level and actually work with them very closely to solve their basic tactical problems.

Siddhartha Ahluwalia 1:02:47

And how do you deal with board? Let’s say you mentioned that offline conversation. The last three years, the macro has been very unstable.

So how do you fix your expectations with your board so that the pressure doesn’t come on your team for the growth?

Khadim Batti 1:03:00

Pressure is always going to be there. I think some of these pressures are also healthy, right? Like as we were all debating, right?

Like we also have to, we have to set the pace. So when you set the pace, actually, you push the leaders to run also as per the pace and keep evolving. Same way, actually healthy pressure from the board is also required to set the pace for the founders also and they also bring because they also talk to a lot of other companies, right?

If he’s doing something very different in my category, I think somebody brings in, I would be thinking, okay, maybe can I get disrupted? Like, can I have to think differently? So that way, it helps in terms of aligning and setting the pace from the board.

Also, you need to balance out. So as you grow, see, when I was actually, let’s say 1 million, 3 million, you set very ambitious targets. And we know that even if we don’t, if we miss it by 50%, it’s fine, because I want to go 3x, 2.5x, 2.2x, also, it’s fine, right? Like 3 to 9k, if I can do 3 to 7 or report 3 to 6 and a half, we’ll figure it out. It’s fine, right? But now, as when you start scaling, because the organization is much larger, and if you I set a goal saying, I need to have a $10 million quarter, I feel it’s very ambitious.

Practically, it has to be, let’s say, for example, six, and we end up at six, I’m happy, probably board is happy, because everybody knew that it’s going to be harder. But you know, shoulders are dropped across the whole sales department, because they believe we’ve missed, something is wrong with the company. So now, the equation changes.

Now you need to start narrowing down the what practically it’s possible versus the expectations, what you said at the board and as a leadership. So that margin actually has to keep narrowing down over a period of time. I’ve also learned the hard way.

Vijay Rayapati 1:04:46

Yeah. Even seed to scale, you know, somebody told me, your goal versus whatever realistic thing, you can have 100% margin at seed, you know, you can have like 75 at A, you know, 50 probably at B, by the time you get to C, it can’t be like, you know, even 20%. Because predictability is also important.

As I said, like people perceive differently. Founders think, yeah, I know that I have set a hyper realistic goal, you can’t go now tell the team that I have set a hyper realistic goal.

Khadim Batti 1:05:15

No one is going to aim for that.

Vijay Rayapati 1:05:17

But even if he knows, say it’s 6 million quarter, but you know, but he set a target of 10, the salespeople suddenly will think there is something wrong, because we have not gotten to 10 that we are supposed to get.

But, you know, I think the founders, as I said, product needs to evolve at every stage for the size of the deal, or size of the segment that you want to go to. I think even founders thought process, board management also has to evolve, right?

Khadim Batti 1:05:44

I think when you when you’re doing, let’s say, one to three, three to nine, that initial journey, I think, generally 99% of the times, I think your TAM is not a problem. Because I think you have enough headroom or enough room to grow, doesn’t matter how the industry is performing, how the macro is also relatively, won’t impact so much, because you don’t need that many deals. But when you are actually looking at 10, 20 million dollar quarters, actually, then other variables starts coming into picture, how is the macro doing actually, right?

How’s your category doing? That’s one of the questions you said initially, right? How is the category because those variables are impacting you as well.

So when you set the targets with the boardroom, I think now I’m not, we as a founder, you should not only go with saying that, okay, I’m going to be very ambitious and go from x to y, I think they need to actually take those other variables of the market, macro variables, your competition variable, your category variable, the segment which you are catering, how or the sector which you are like, is the sector specific headwind, like if I’m going only for federal and then doji, you can’t, right?

So those variables also should be taken into the planning and actually put in the perspective to the board and then actually set those expectation realistic. Of course, you can have 10, 20% buffer, but not like 75% at A level.

Siddhartha Ahluwalia 1:06:53

And how much do you think in this AI world, the previous revenue is predictable? Like, is there many headwinds coming to the revenue that you have built?

Khadim Batti 1:07:02

When headwind comes, actually, everything becomes hard, like every dollar is questioned, right? I think if I were to give a simple example, 2020, 2021, because now, as I started growing, I think I have to start measuring other variables as I was mentioning, start measuring the public SaaS companies, how they are performing in the US, because we don’t have much comparables in India in the public market. So one simple metric, sales and marketing efficiency magic number.

I think 2020, 2021, 2022, I think if you guys have tracked was like 0.73, 0.75, even 0.8 range. That means every dollar you spend on sales and marketing, you get 0.7, 0.8 back net. Today, if you see the public SaaS company, it’s 0.5. And we are talking about the that’s benchmarks, we are talking about the CRM leaders, or HR lead, HRM, HCM leaders, or ITSM, all those guys are involved in the public benchmark. So what does it mean? It means that for every dollar you spend now, you’re only getting half back. It become like at least 35-40% harder.

Why? Because everybody is rationalizing, they are taking more time to take a decision. Same thing, it also happens in renewals, right?

Okay. I want to move fast, less question asked. I want 300 seats.

I bought 350 as a 50 buffer, because I’m going to grow. Everybody will come back saying, okay, I thought I will grow the 350. I’m not going to 350.

In fact, 300 has come down to 250. I need to cut down my spend. I need to rationalize my budget, because I’ve been asked to.

So it’s hard. I think advantage I think India here is, I think there’s like we are in the business of SaaS, right? Software as a service.

The second S gets forgotten. Everybody forgets that only software part they focus and the service part they forget. For us, actually, it was even more important because it’s a new category, even the buyers didn’t know what to do with this.

So we had to focus on second part, success and service a lot. Probably that helped us to stay and continue to grow.

Vijay Rayapati 1:09:00

Yeah, actually, I think even before salesperson, we had head of customer growth in US, right? So even before we had head of sales…

Khadim Batti 1:09:05

I didn’t do that, but I would advocate that.

Vijay Rayapati 1:09:06

Yeah. So before our head of sales, we hired head of customer growth, right? So Vandana actually joined, the moment we got like our first couple of six plus figure deals, I’m like, OK, we’re going to have that.

I think it makes a ton of difference. I think we forget that Ai will replace everything. I think buying will still be done by humans.

That engagement of renewal expansion will still be decided by humans. That human touch is very important, right? AI might automate all the things till the buying, right?

But even after they buy, it might help track better. It might help drive usage, et cetera. Actually, the funny story of our first customer, we had sold one deal in Seattle and I went and met the CIO after the deal.

And he said, he was like, it’s OK, we don’t need to meet, we can chat. I said, no, I’m in Seattle, so let’s meet for lunch. So I met him and he said, you should hire a sales guy.

I said, why do you say that? He said, I told your guys who are involved in the process, you are expensive. Even without telling the value, the guy immediately dropped the price.

I assumed he’s not a sales guy, right? But he also said another thing, good companies, most companies sell, then they stop meeting the customer. They only meet, good companies meet the customers even after the sale, but great companies engage with customers in a cycle of a cadence.

I think that is also very under talked. I mean, I would highly encourage from our own experience. She started driving expansion.

I was like, hey, we just deployed, it’s not even six months, why are you being aggressive? And she’s like, no, we need to because we’re delivering a lot more value, because we are having those conversations. And she actually started driving expansion.

And yeah, I mean, I would highly encourage, especially if you’re in enterprise, get the head of customer growth. They can handle success, support, engagement and all that initially. It makes a ton of difference.

Because after first 10 customers, it’s very hard for founders to talk to every customer every month. But you need that cadence. I think the real service part of software, which everybody is getting excited is not that service, but actually, how do you ensure that your customer is getting value?

Because if customer does not get value, they will churn. Your churn is actually a product adoption, usage, enablement problem. It is, you know, quite a bit of that.

Khadim Batti 1:11:54

Customer success also becomes a very good mechanism to actually feedback to the product. Product. Right.

If you don’t have that, that again, that loop closes, actually, you don’t have that loop, it becomes very, not only actually for fixing the current problems of your product, but also identify the adjacent problems which you can solve and scale up at some point of time. So over a period of time when you want to become a multi-product company, or you want to increase your product portfolio or size of your product value, I think that becomes a….

Vijay Rayapati 1:12:19

I think without customer success, you get a very shallow feedback. With customer success, you get a very deep feedback about adjacency opportunities, co-existence, the ecosystem, customer thought process. And I was amazed, you know, customers showed a roadmap for the year, as we entered this year.

And they had like a whole bunch of slides of like all the things that are happening in their business. And our PMs could not have gotten that visibility if we didn’t had, you know, our head of customer growth and, you know, this forward deployed engineers, because they went and they said, okay, customer actually has a big plan for the year. So we are playing one piece.

In that piece, you know, these three things are very key. If we do these two things, our value to customer goes up. If we do the third thing, we will also expand with customer.

Khadim Batti 1:13:05

In fact, I think when we were talking about the pod, right, like, even in engineering, we have engineering pod with the design and product managers also. Three to four years back, what we decided every pod, engineering pod should have anchor customers, right? Because whatever they do, there should be an impact.

At that point, I had an apprehension like, is it going to be easy for every engineering pod to even get exposed to customers and will customers reciprocate? But having that customer success in between and building such a solid relationship, I think it was just like such smoothing when the customers were happy to talk and say, okay, I would like to see that impact what you guys are building actually. And they were very, very open.

In fact, in second, third, fourth product what we have built, we got design partners. And like within 30 days, three design partners, which we have, because we will not roll out a product unless we have three design partners. And you can say at least 60 to 70% of the design partners were fortune 500 companies.

Vijay Rayapati 1:14:00

Customers love to co-create in enterprise. In enterprise, they love to co-create. I was positively surprised.

Siddhartha Ahluwalia 1:14:06

One thing that I want to discuss is, how do you make sure this AI world, what is noise and what is value? Because the noise is companies reaching 100 million are within 18 months.

Vijay Rayapati 1:14:18

Yeah, I mean, like, see, we had this noise even last decade, you know, okay, Slack got to whatever 100 million, Zoom got to 100 million, DocuSign got, things like that. I think we will always have that noise. But you also know, look, what is the first principle?

It is easy to acquire revenue. It is much easier to churn that revenue. The harder it is to acquire that revenue, the longer you will keep.

The insertion matters. And depth in the workflow matters. For example, I mean, like, you also know the churn of a lot of those AI guys and people, have no loyalty because it’s mostly individuals or presumers buying this.

I think you need to know, are you building for the individual? Go aggressive, you know, go hyper with scaling, raise ton of money. Are you building for the team as a software?

Are you building for the enterprise, right? So we are very clear we’re building for the enterprise. So we’ll probably be the slowest one to 100, but our chances of that 100 to billion is much, much better than, you know, any of these individual, you know, guys.

So I think founders need to know whom they are building for, what they’re building for. And you will always have outliers, always, and always we had outliers, right? When 20 years back ago, you had an outlier.

There will be some company which has gotten fastest to a billion, right? But those things don’t matter, right? Slack eventually it’s a beautiful software, great product, amazing love from end users, but you still cannot survive without email, without calendar, you know, those capabilities, right?

Eventually you have to exit, right? So if you build for a team, there is advantage, but eventually you have to build for the enterprise because business uses the software. If the same business gets a chat from an email provider like Microsoft Teams or Google, you cannot survive, right?

So I think knowing why you are building, what you are building, I think gives you confidence. So you will not get too much worried about the noise. I think what we need to learn from this AI is not only the way to build products is changing, how to build is getting commoditized, right?

But what to build is becoming increasingly harder. Then once you build, what to build requires you to know why you want to build what you want to build. That basically requires a lot deeper understanding of problem space, your customer, as we were discussing, being very close to customers is super important if you are building for enterprise, right?

If you look at enterprise software companies, how many of them have gotten to 10 billion plus? There are like four or five, that’s it. How many of them have even ever gotten to a billion plus?

There are less than 60. How many of them, you know, as Khadim was saying earlier, even 200 million plus, there are less than, I think if I’m not wrong, 4,000 companies ever got in the history of enterprise software in the last 40 years or 50 years to 100 million plus, right? Yeah, I think, see founders should have some conviction, right?

And continue to validate that conviction with customers, with competition, with the current changes that are happening in the macro, micro industry, vertical, and you know, whatnot. But don’t worry is my thing, right? Because if you’re worried, the worst thing you can do is, I think leaders respond, they don’t react.

If you get hooked into this meme games and Twitter games and LinkedIn games, you’ll always have, right? Just like, you know, in your neighborhood, there will be somebody richer than you. There will be one company which will do extremely well.

Your thing is, how do I build something that’s really valuable for my customers? In that process, how do I create value for my team, my investors, and everybody involved? And I think those things will not change.

What will change is, previously, if we had to go attack the problem that we were attacking, we would probably need 100 plus engineers at least. Now we are doing that with 25, 30 engineers, right? So the build has gotten easier.

But what to build and why you want to build what you want to build has only gotten harder, right? So as long as you’re clear about those things, I think you’ll have a comfort, you know?

Khadim Batti 1:19:04

I think whenever there’s a fundamental shift, whether it’s on-premise to cloud, or mobile, or AI, right? It just creates the tailwind. And because everybody wants to know what’s happening in this shift, and I don’t want to be left behind, right?

So people want to experiment, they want to look at budgets to that. And for the startups, actually, it creates an opportunity now to actually acquire or land those customers, which otherwise would have been hard, right? A new category is also one such opportunity where you can actually go and get those logos.

But the fundamental still remains the same, as he was mentioning, you still need to prove value, it’s an opportunity to grab those logos or grab those customers, get into it, get those dollars, but then you still have to build those other fundamentals, where you will actually show them the value with success with other stuff and all. And then be sticky and identify the problems and create that larger solutions and all. So because of the shift, many companies get 100, 200, 300, 400 million, depending on that size and all, but the companies which capitalize on that, they become legacy, right?

They become 10s of billions of because they start solving a lot of other problems, and they actually really go deep. In fact, I’m just putting a plug here for Whatfix. In last six months, we have seen several of our customers coming back, we have bought some AI solutions, we are facing adoption issue.

Vijay Rayapati 1:20:29

Can you drive adoption? Probably all the biggest AI solutions from the biggest vendors in the world are facing adoption issues.

Khadim Batti 1:20:36

If you open up Whatfix page in the solution, there is an AI adoption, like we used to have software adoptions and all, where we help them in improving AI adoption, actually. So yeah, it’s helping us.

Vijay Rayapati 1:20:48

The more software gets created, the more bigger Whatfix will become.

Khadim Batti 1:20:53

So we will do agent adoptions.

Siddhartha Ahluwalia 1:20:56

And you previously wrote playbooks for Indian founders that how to do 500k setting from India, how to do million setting from India. What are the new playbooks that are getting created in the AI world for GTM?

Khadim Batti 1:21:05

Like, not yet AI first company. But see, I think most important is, there is a FOMO. Nobody wants to be left behind.

Vijay Rayapati 1:21:18

A lot of FOMO.

Khadim Batti 1:21:20

Of course, a lot of FOMO everywhere. Everybody wants to be. So there are a lot of companies just putting AI for the sake of it.

There are some genuine companies actually. So because everybody is open to listen what solutions you have in this AI, I think at least knocking the doors and reaching to those customers, I think it’s possible. Doesn’t matter where you are.

So I think the fundamental playbook remains the same. Like if I was talking yesterday to one of the other investors, who was saying actually for deeptech companies or sectoral companies, like in energy or defense, I think people are not listening. People are actually saying, okay, you can’t build this.

You can’t build that. Similarly, somebody has told about the AI first and many other stuff. Well, the jargons have changed.

Like if I replicate some of those things the same, like okay, enterprise SaaS, you can’t do it from India. You can’t sell 100k or 500k or million dollars from India. I think if you still think fundamentally, who is your buyer persona?

And what problem you’re going to solve for that person? And how your product is going to solve? Other things are similar.

One thing which Vijay mentioned very clearly is like, probably many of those steps in GTM, whether how you’re reaching out to them, how you’re doing the research for those persona, how you’re articulating those values, how you are going to actually respond to those emails, many of those things can be automated. And you can actually, if manually, if you were able to reach 100, now you can reach 1000, right? So many, so GTM playbook will become more scalable, probably.

But the fundamental will not change so much. And you can evolve or you can grow even much faster than what you used to do before. And one thing which is very important here is, at some point, everybody will do it.

So the first mode advantage is always there. If you can adapt to that, you can move faster and you can take advantage of those. Probably you would have distribution mode build on top of it.

Siddhartha Ahluwalia 1:23:13

And you both are selling to the CIOs, right? What is the top of mind worry for the CIOs?

Khadim Batti 1:23:21

See, I’ll tell you from the AI perspective. General worry, I think CIOs many things. Like, I think one of the problems CIO would definitely have with every boardroom discussion is, okay, what are you going to do in AI?

Right? So they also want to say, okay, how my software stack, how my things, AI can help in my all processes and all. One shift which I feel which everybody, I think, has aligned is AI, like earlier, we had all workflows.

Now everybody believes that AI will help outcomes. So CIO probably, at least in non-tech industries, can actually now start influencing a lot more outcomes rather than just building the processes and flows for them, workflows for them, right? That’s one.

18 to 24 months back when I used to speak to a lot of CIOs, one thing people which came out which very common was, there were, of course, there’ll be a few exceptions here and there, was, okay, I want to know what you guys are doing in AI.

Siddhartha Ahluwalia 1:24:14

Yeah.

Khadim Batti 1:24:14

Okay. But do not roll out. If you roll out, I’m switching off your software today.

Because they believe I want to know, but I’m not prepared. Because my IS team, my IT team and IS teams are evolving how to evaluate even their data privacy and data going out or learning and all, because nobody knew how it was going to happen. So they wanted to be on top of innovation, but they were not ready to deploy.

Last 8 to 10 months, I have seen many companies, information security and IT departments, they evolved to evaluate. Fast forward, last 3 to 6 months, I have seen many companies have built AI task force. Saying, what are the low hanging fruits?

What are the use case we can actually deploy AI? So the enterprise have moved from just listening what you have to now, identifying what are the use case where I can automate or where I can deploy AI. So that transition I’ve seen in like 24 months.

And yeah, I think even… And when I talk, sorry, when I talk, I’m talking about large enterprises. Yeah.

Vijay Rayapati 1:25:16

So we basically operate in a global 10,000 segment, right? Khadim is mostly in global 2,000 segment. As I said, I think CIOs earlier mostly used to deal with process.

The process mostly created bureaucracy. Now they are more interested in delivering productivity so that they can show outcomes. Security is top of the mind.

In 2023, they were probably thinking about AI. In 2024, they were trying some AI. Now 2025, they want to deploy and prove the potential of it.

Not just the promise and the potential of it, show the value of it. But CIOs have the same problems, right? How do I support growth?

How do I make the org move faster?

Khadim Batti 1:26:08

Digital transformation.

Vijay Rayapati 1:26:08

And how do I make IT smarter?

So we literally listened to a lot of those words and came up with our own tagline, smarter IT, faster business. Which is you’re continuously, right? You’re transformed for cloud.

You’re transformed for web. You’re transformed for mobile. You’re transformed for big data.

Now you’re transforming for AI. But fundamentally, everybody, all of us agree that we could only do task level, workflow level automation. Automation existed for so long in software.

Now you can actually take that task and process level automation to a job role or a job function level automation. I think that’s a big opportunity for everybody, existing vendor, new vendor, upstart, you know, to scale up. Is how can you basically drive more automation at a job role and a job function level?

You know, if you can do that, I think then we can truly move organizations faster and help more companies become big companies, right? One of my fundamental belief with AI is why there are only 10,000 companies in the world whom we call as G10K who can spend tens to, you know, multiple tens of millions of dollars on software. Why don’t we have, why we don’t have 100,000 companies spending that much money?

Because we did not had an opportunity to create very big companies because capacity and capabilities are very hard, right? Of course, capital is the hardest. Once you have capital, what do you do as a founder?

You organize capacity, you organize some capabilities, service capability, product capability, manufacturing capability, service capability, whatever it is, right? I think AI will, you know, unlock a lot of capacity and capabilities. So more smaller companies which got struck at 50, 100, few hundred people today can actually grow, become few hundred to few thousand people.

I think they will create a lot of jobs while big companies might become leaner and smaller, you know, because a lot of bureaucracy, the human bureaucracy, right? I generally tell AI will not take away jobs, but AI will take away bureaucracy. Anywhere there is a process, you’re waiting for a human update, status update, middleman.

I think AI will, you know, reduce those layers, but it will also create a lot of growth opportunities. I feel we will have a lot more businesses. So the opportunity will only get bigger.

Khadim Batti 1:28:30

In two decades, everybody has transformed. Everybody has data, right? So I think the next big change, I think what I’m saying is now, can I push productivity, right?

Of course, decisions I will take, but at micro level, as he was mentioning, a job function, a job role. How can I push 30 percent? How I can push 50 percent?

So I think that major change is happening. And with AI is accelerated.

Siddhartha Ahluwalia 1:28:52

Thank you so much, Khadim. Thank you, Vijay. This has been an amazing conversation.

Vijay Rayapati 1:28:57

I mean, I learned so much. So thank you, Khadim.

Khadim Batti 1:29:00

A pleasure, yeah.

Always learning from everyone, actually. And thanks for inviting.

Vijay Rayapati 1:29:01

Thank you for having us.