Forbes India 15th Anniversary Special

"We will tap our India advantage for international expansion": Freshworks CEO

Dennis Woodside, who became CEO and president of Freshworks, is now the public face of the Nasdaq-listed Chennai-to-Silicon Valley SaaS company, while founder Girish Mathrubootham, as chairman, focuses on product strategy

Harichandan Arakali
Published: Jul 9, 2024 01:19:17 PM IST
Updated: Jul 9, 2024 01:23:33 PM IST

Dennis Woodside,  CEO and president, FreshworksDennis Woodside, CEO and president, Freshworks

As Freshworks pushes towards its first big target of hitting $1 billion in revenues by 2026, its India heritage will be an advantage, says Dennis Woodside, who took over as CEO and president, in a recent interview. The company is expanding its international customer base, and infusing more AI features across its three main product lines. Edited excerpts:

Q. Give us a peek into the conversations behind your transition to CEO.
I joined in September of 2022, and at the time I was talking to Freshworks and Mathrubootham, there was the possibility down the road that he would want to spend more time on product, engineering, and forward-looking strategy. So, when I came into the company, we had the team report both to me and to him, and we really were co-leading the business for well over a year.

That gave me a chance to learn the business. It gave Mathrubootham a chance to learn about me and make decisions as to whether he trusted this person coming in from the outside. And it gave the team some time to settle in as well with me.

One of the hardest things to do in business is create something out of nothing. All these offices employing close to 5,000 people, Mathrubootham has achieved a lot in the last 14 years. And he wanted to go back to his roots, in that he wanted to spend more time thinking about the future, thinking about AI, thinking about how Freshworks is going to evolve from a technology and product standpoint.

And he didn't want to necessarily have to spend his time on a lot of the duties of a public CEO. There's a side of work around working with investors and managing your relationship with investors. There's a lot of work around meeting with your current customers and partners.

Financially, we’ve articulated the aim of getting to a billion dollars in revenue by 2026, and we’re now cashflow positive and on our way to profitability. So, all things together, we decided we were ready for this.

Q. Give us a sense of the areas in which you’re making a big push.
Freshworks today has well over 60,000 customers worldwide, across three different product lines. The products that we sell are necessary for every business in the world to serve its customers and its employees. We provide automation for IT departments, enabling them to do their jobs better, provide technology to their employees.

We provide technology to the customer support team to automate how they interact with their customers. And that allows customers like Dunzo, for example, to serve millions of customers of their own. The markets we're in are huge, they're global. And the software we build, it's not optional. Every company needs what we produce now. Many companies are still early in their journey to digitising their operations, transforming the way they work, using technology, and we can play a big role there.

AI is the next set of capabilities that we're putting on the platform that we've already built. So, a customer that already has millions of consumers isn't going to be able to hire tens of thousands of customer support people. They can use technology to solve their customers’ problems. That's a role we can play.

Going forward, it's really all about scaling up.

Q. So, in this context, can you give us an update on your journey to becoming more of an enterprise customer business?
Today, larger accounts are driving substantial growth at Freshworks. Our focus on companies spending over $50,000 with us has been pivotal, attracting major players like PhonePe and Tata Consumer Products. These relationships have deepened as these companies scale up, relying on us to manage their critical business interactions seamlessly.

Our success stems from our commitment to user-friendly products that are easy to deploy and train agents on, setting us apart in the market. Looking ahead, AI will play an increasingly significant role in our offerings. For instance, Freddy Self-service empowers customers to resolve issues independently through AI-driven interactions, significantly reducing the need for human intervention. Freddy Copilot enhances agent efficiency by providing instant, accurate suggestions based on extensive product knowledge and customer interactions.

As we continue to integrate AI more deeply with our products, I foresee even greater advancements over the next few years. This strategic use of AI not only enhances our service capabilities but also empowers our customers to transform their operations effectively.

Q. From here on, are you working on adding depth or offering a more comprehensive suite of products, or both?
It’s both. At Freshworks, our approach to AI is twofold: Deepening and broadening our capabilities across our product suite. Since 2018, we've integrated AI with our offerings, enhancing customer interactions through 70 AI-powered features like summarisation, which helps create actionable insights from customer-agent interactions. This suite continues to expand with innovations like Freddy Self-service and Copilot.

Our AI initiatives are powered by a dedicated team of nearly 2,000 technical experts across Bengaluru, Hyderabad, and Chennai. We leverage leading language models such as Azure OpenAI, Anthropic and opensource LLMs to ensure robust AI functionalities. Looking ahead, our focus is on deepening these capabilities to foster more natural interactions between customers, employees, and virtual agents.

Simultaneously, we're broadening our product reach. For instance, in IT operations management, our tools integrate seamlessly with platforms like Slack, enabling efficient crisis management. Similarly, Freshworks for Business Teams extends service desk capabilities beyond IT, catering to departments like finance with solutions for queries and automated tasks.

This dual strategy of deepening AI functionalities and expanding product offerings underscores our commitment to driving growth and innovation across businesses worldwide.

Also read: Freshworks can go well beyond a billion dollars: Dennis Woodside

Q. In this context, how important are targeted acquisitions?
Recently, we announced the acquisition of Device42, a move that reflects our strategy to deepen our capabilities in IT asset management. While Freshworks excels in cloud-based asset detection, Device42 specialises in on-premises asset management, crucial for large enterprises like Tata and Mahindra with extensive IT infrastructures behind firewalls. Device42 scans and catalogues every IT asset, including servers and computers, which complements our existing cloud-centric capabilities in Freshservice.

Acquiring Device42 was strategic, as replicating their expertise would have taken us years. This acquisition not only provides us with immediate advanced capabilities but also aligns with our commitment to enhancing our product offerings. We're excited to integrate Device42's solutions with our portfolio, leveraging their expertise to serve our expansive customer base more comprehensively.

Looking forward, we anticipate more strategic acquisitions to bolster our talent pool and product lines, ensuring we continue to meet the evolving needs of our customers effectively.

Q. Give us a sense of the big changes in SaaS today.
Two significant trends are driving our business forward. First, there's what I call SaaS 2.0, a shift that's evolved from the early days of pioneers like ServiceNow and Salesforce. Initially, SaaS offerings were limited, but now there's a plethora of choices.

At Freshworks, we capitalise on this trend by offering user-friendly, swiftly deployable products with a unified code base for the most part, and which are mobile from day one, setting us apart with lower costs and mobile capabilities from the start.

The second major trend is AI integration across SaaS platforms. AI is transforming how businesses operate by enhancing customer and employee interactions. We're at the forefront with over 70 AI-powered features, crafted by specialised engineers. Most businesses lack the resources to develop such capabilities internally, relying on us to deliver cutting-edge AI tools that optimise their operations effectively.

These trends—SaaS 2.0's expanded choices and AI's transformative impact—are key drivers as we continue innovating and expanding our offerings to meet evolving market demands.

Q. While India is widely recognised for its software talent, where does it stand as a market for Freshworks?
India holds immense strategic importance for Freshworks across several fronts. Firstly, it serves as a hub for our product development, boasting a pool of top-tier engineering, product, marketing, and sales talent crucial to our operations. Our strong employer brand in India continues to attract the best talent, reinforcing our capabilities.

Now, with Device42, for the first time we have software developers outside of India. But until then, all of our software development has been in India. And as the company grows, we'll continue to look for talent wherever that talent may be.

India stands as a key market where Freshworks enjoys significant brand recognition and success, particularly with tech unicorns like PhonePe, for example. We've also established strong relationships with the large conglomerates such as Mahindra and Tata, expanding our footprint in established sectors.

We're investing in government sectors, anticipating substantial growth opportunities as governments increasingly adopt our solutions. The US is our biggest market and a substantial portion of our revenue also comes from Europe, underscoring our global reach.

Balancing our Indian advantage with expansion into major international markets remains a strategic focus, ensuring we leverage talent and market opportunities effectively worldwide.