“There is a culture of entrepreneurship at Freshworks”

[This is the second edition of our Founder Talk series wherein we share the learnings, motivations, and experiences of founders whose companies got acquired by Freshworks or who otherwise happened to join Freshworks at an interesting point in their journey.]

When Craig Soules founded Natero nearly a decade back, it was more of a “horizontal analytics” company. Within two years, he and the team realized that the space was quite crowded and a year later, they began to pivot the company toward making it a customer success platform. They relaunched it in 2016—and there was no looking back since then. Signing up the first 20 customers that year itself, Natero tripled its revenue in 2017 and nearly tripled it again in 2018. 

But the biggest change for Craig and Natero probably happened in 2019 when Freshworks welcomed it into its growing family of tools to help businesses delight their customers and employees.

Craig has been happy with the choice, too. In this interview, which happened over Zoom much before Freshworks went public on the Nasdaq, he shares his entrepreneurial journey, his evolving role at Freshworks, and the exciting opportunities ahead. Edited excerpts:

Can you please tell us about your entrepreneurial journey? What made you start a venture?

I started thinking about my startup when I was at Hewlett-Packard’s research division, HP Labs, around 2011. I spent a long time in research and had spent some time trying to transfer the work we had been doing in research out into the actual product teams. I was getting extremely frustrated with the whole process, finding it very challenging to get attention, to get focus, to get the company to actually engage in less proven technology…obviously, the larger a company is, the harder it is to do those kinds of things but when you do extensive research, the hope is that you could leverage that. Meanwhile, I was watching all sorts of startups doing new things and pushing the boundaries of technology and felt like I should do the same. 

The big problem that I saw, especially with big companies, was that businesses often don’t understand their customers that well. They have this wealth of data about customers, but the information that trickles out from that data, at least back then in 2011, wasn’t really there. As business leaders were trying to get answers to questions [about customers], they would reach out to their IT team, who would spend a bunch of time—often months—trying to figure out where that data was, how could they extract that data…they would have to put together a project, figure out how to set it all up…all these dashboards. And you know what? Six months down the line, when they got the answers to the questions, the business would have moved on—and the whole process would start all over again. It seemed like a very inefficient way to run a business, to understand customers. So we, my cofounder and I, thought about how businesses could better leverage the data about their customers and have quicker time to insight. 

So when we started the company, it was more of a horizontal analytics platform. We had built something that could take in arbitrary, semi-structured data as well as data from business applications, merge that together and use it, sort of on the fly, to build out transformation pipelines, and then chart some dashboards and things like that. 

We spent about two years on that and we kind of came to the recognition that the space was very crowded and we needed to focus on a particular vertical. 

Around the end of 2014, we came to the recognition that we needed to pivot from what we were doing. We looked at a few different areas and ultimately decided on customer success—a place where a lot of customer data and business decisions came together. Customer success kind of lives at the end of the customer journey: marketing, sales, and then, after the sale, you have to manage the entire customer lifecycle. And that’s a mixture of support (which was very reactive at that time) and customer success, which at that time was a very new concept—that is, managing customers proactively and leveraging data and engagement information about your customers to do that. And we had this very powerful platform for collecting, transforming, and turning customer data into insights, so we felt that we were very well positioned to help out in that space. 

So we pivoted into customer success and spent all of 2015 to build out the workflow capabilities for customer success managers on top of the analytics platform that we had. And we launched that product at the beginning of 2016.

It’s interesting that you know you’ve hit product-market fit because things tend to go a lot more smoothly. You start building a repeatable sales process, you understand what your customer profile looks like. We closed our first 20 customers in 2016. Then we tripled revenue in 2017, nearly tripled in 2018, and in the beginning of 2019 we got acquired by Freshworks. 

At the end of the day, you start a business because you want to have an impact. You are looking for a way to change the way people think about something, right?

How did Freshworks end up buying Natero?

I was actually about to go and raise another round of funding; at that time, Freshworks was one of our earliest customers. So I reached out to Freshworks and wanted to know if Freshworks did institutional investing. We used to work closely with our earliest and biggest customers. After a while, Freshworks came back and said they were very interested in what we were doing. 

So I met with the person who was running customer success for Freshworks in the US and the CMO at the time, and they painted to me a picture of what Freshworks wanted to do, this concept of customer for life. And the idea that you could manage this customer journey from the moment they become a lead all the way through to becoming an advocate for your business. It was interesting to me because that was exactly the concept on which I was going to go on and pitch [to the investors]. I was going to say that all this rich data we have for customer success can be leveraged for other parts of the business. You can use it in marketing to identify [customer] advocates and case studies, you can use it in sales to increase cross-sell and upsell, you can use it in support to do better triaging…so they [Freshworks] were pitching to me the very concepts that I was going to take to the venture world! So I thought this made a lot of sense: the vision Freshworks had and where we wanted to head were extremely aligned. And when the conversation turned toward the possibility of an acquisition, we obviously became interested.

At the end of the day, you start a business because you want to have an impact. You are looking for a way to change the way people think about something, right? And in our case, we wanted to change the way people think about customer data. There are lots of ways to do that—you can do that by growing your own business and venture [fund] is a great way of doing that, but that’s not the only way. Seeing that Freshworks was already on that journey and we could join that was really exciting to us. And that alignment really led to the acquisition.

How has your role evolved at Freshworks?

When I came in, the plan was to obviously take the Natero product and continue it as a product line under the Freshworks brand. So I was tasked with heading that. A lot of my focus has been on two things. One is rebranding Natero and getting that launched into our existing customer base and promoting it to that base; and getting alignment with the product design and engineering and continuing to develop the product as we try and find ways to tie it deeply into the other products at Freshworks. The other thing is to get alignment on the operational aspects of the business. 

For example, we had a very heavy onboarding process, but the Freshworks onboarding team two years ago was just getting fully up and running. So I was making sure that we were engaged with that process. So a lot of that has been interesting, in making sure that we get operational alignment. 

From my perspective, there are two reasons why startup acquisitions fail. One is if there’s a lack of vision alignment which in this case we definitely didn’t have, as we were very aligned in our objectives. And the other is a lack of operational alignment. If you can’t make those two cogs fit together, it will keep breaking at some point or the other. So that has been a big part of the job as well. 

Does Freshworks provide a broad canvas to entrepreneurs like you to do their thing? 

They’ve acquired a lot of entrepreneurs into the business, so I think there’s a culture of entrepreneurship at the company. They have a thought process that goes like, “Let’s get it done; let’s figure out a way” as opposed to, “Okay, this is the process and we have to stick to it.” Obviously, as you grow, you’ve got to have more processes to stick to, but at the same time, when you are trying to get something off the ground, you need more flexibility. So there’s a tension there but I think the Freshworks mindset is more of an entrepreneurial one. As someone coming in, it is very refreshing.

As Freshworks grows into a large company, how can it keep its entrepreneurial DNA alive?

The thing that needs to happen—and I think we are getting there—is, you have to build robust processes. Because, otherwise, you can’t scale it at some point. But you also have to trust people to know when to not follow the rules. And Freshworks puts a lot of trust in its people: hire the right people and trust them to do their job.

What are your plans for the next couple of years?

The last few years have been spent getting Natero transformed into Freshdesk Customer Success, getting that part of the business solidified and entrenched within Freshworks. But I don’t think we have [fully] unlocked what a complete customer strategy can look like; how Freshdesk Customer Success can really enhance Freshsales CRM or Freshdesk and what we can do for teams operating in those environments. That’s where we are going to see a lot of interesting things coming up.

I think we have an opportunity to take our product lines and start to hook them together in different ways to unlock capabilities.

 

Watch the complete Founder Talk video by clicking below and get more insights into Craig’s entrepreneurial journey and his evolving role at Freshworks:


Cover design: Vignesh Rajan
Video editing: Arjun Pillai