Inside India’s booming startup ecosystem with Freshworks CEO Girish Mathrubootham

Companies around the world are focused on succeeding in India. But the local tech industry is growing fast, too.

Girish Mathrubootham headshot

Girish Mathrubootham made it big with a company in India. He wants to help others do the same.

Photo: Freshworks

Girish Mathrubootham is in pay-it-forward mode. After starting Freshworks in Chennai, India, and growing the customer communication startup into a multibillion-dollar company, Mathrubootham wants to take the lessons he learned along the way and help a new generation of Indian entrepreneurs do even more, even faster.

India is one of the fastest-growing markets for the tech industry, with hundreds of millions of people coming online and a much more open, global stance than countries like China have adopted toward tech. That's why Google, Amazon and practically every other tech giant is scrambling to establish a foothold in the country. Mathrubootham said that's a good thing, but he's focused on investing in and helping the founders already in India build companies that can rival those giants both in the country and around the world.

Mathrubootham joined the Source Code podcast to talk about his experiences as a CEO and an investor, the state of the Indian startup market (particularly for SaaS companies), what his new Together Fund is looking for in Indian companies and what it means to build "a Silicon Valley" in a city like Chennai.

You can hear our full conversation on the latest episode of the Source Code podcast, or by clicking on the player above. Below are excerpts from our conversation, edited for length and clarity.

A few years ago, India started coming up as the more open version of China. China was increasingly going to become its own place, run by its own companies, and inaccessible to Western companies. If you were a big company in Silicon Valley, the market you really should be looking into is India, because there's a billion people, everybody's coming online very fast, India was going to be the next big thing. Fast forward a few years to now, where are we in that process?

So I think there are two parallel opportunities that are happening right now. On the consumer internet side, the Facebooks and the Googles and the Amazons of the world are going to India because that's where a billion people are. And everybody's coming onto the internet. And I think that journey is on.

The global SaaS opportunity from India is something where startups can actually go global from day one.

What's more interesting and fascinating, for me personally, is the global SaaS opportunity for Indian founders. So that is actually not about the India market opportunity. It's about how entrepreneurs can actually disrupt global markets. From India, these companies are directly going global from day one, so there's no parallel in China here. Like China, where you want to grow in China and then hopefully try to get outside and never do? Forget that. Even in the U.S., companies first win in the U.S. before going to Europe, and then going to APAC, or companies that start in Europe and Australia want to win locally. The global SaaS opportunity from India is something where startups can actually go global from day one, and sell to customers anywhere in the world. And then later on also have customers in India or parallely have customers in India. That's a very new trend.

How do you explain why that has been the focus, as opposed to so many other places?

I think there are a few key macro changes that are enabling this. One, online acquisition of customers thanks to Google AdWords, and SEO/SEM, that's one of the macro trends that is enabling businesses to find customers without actually having to hire expensive enterprise salespeople.

The second macro is SMBs wanting to digitally transform themselves. Every business today wants to adopt technology, to be able to take care of their customers and take care of their back office and employees and so on. And the revolution of product-led growth and SaaS as business models, where you can buy software on your credit card with $100 a month or $50 a month, as opposed to, say, 15 years ago when you had to have $50,000 or $100,000 budget to even be able to start at the lowest price for enterprise software.

Broadly, I would say, these three macro changes — online acquisition via Google, evolution of SaaS and monthly credit card billing and SMB digital transformation — are converging. And if you look at AWS, allowing anybody from anywhere to start a company, and we see money is being available everywhere.

For decades, the story has been, you have to be on Sand Hill Road, you have to be within a drive of your investors, or you're not going anywhere. And so there's always been this geographic pull to Silicon Valley. But now you have companies like Zoho and Freshworks, and investors like you, is that less important? Have India and Sand Hill Road gotten closer together?

Definitely. The first VC who called me when I was raising money for Freshworks — it was called Freshdesk at the time in 2011 — was from Sand Hill Road. And even though they liked the story, immediately after 30 minutes, they said, "Girish, we didn't realize you are in Chennai, India. We don't invest in companies that are not close to us. We thought you were in the Bay Area." And then hung up.

I think a lot of people had that phone call over the years!

Yeah. So I think that has changed. Today, you have VCs fighting for early-stage deals. And there are deals in the U.S. where VCs from India are pitching. So I think the world has really become flat, and probably in a Zoom world it's even more relevant. Nobody's actually meeting in person. So if you look at the last 18 months, no deal has happened with in-person meetings, right? So you're just meeting people on a Zoom call and writing checks.

You've talked a bunch over the years about wanting to build "a Silicon Valley in India." I was going to ask you what that looks like, and how that might be sort of similar and different. But what you're saying makes me think having "Silicon Valleys" in lots of different places is an old, out-of-date construct. That Silicon Valley exists in India already, it exists in Brazil, and it exists in lots of places. That maybe this thing left Sand Hill Road a long time ago.

I think you have to understand what people mean by saying "the Silicon Valley of India," right? What it refers to is having a closely knit ecosystem of people who understand what a startup needs to succeed, and who are willing to come together and help each other.

In 2010 to 2011, when we first launched a product, nobody would be even willing to try our product in the ecosystem, because you don't trust a startup. Whereas you look at Silicon Valley, everybody in a batch in Y Combinator will be using the other startups' tools, right? So I think that is the culture that we need.

When we say we want to create a Silicon Valley, we want to create a culture of believing in founders where you want to help, you want to share, you want to give feedback and make connections, make introductions, help them get funded, get them advice on tax, accounting, whatever they need, and help them hire and go forward. And in that sense, I think it will be hard to create one global network. So if we can have pockets of Silicon Valley in, say, 10 places in the world, I think it's a good thing.

When we say we want to create a Silicon Valley, we want to create a culture of believing in founders.

And how is that going in India? I was reading in preparation for this that there's been heated debate over the years about which city in India should be the one that is focused on for the tech industry. What is the state of that space in India right now?

I think all those fights are all just interesting media stories.

If you look at SaaS, one of the things that we have done in Chennai is to create Chennai as the SaaSBoomi — Boomi means Earth in both Tamil and Sanskrit. So there are a lot of SaaS companies in Chennai. If you look at Bangalore and Delhi, predominantly there have been more consumer focused: You look at Flipkart and Zomato and Swiggy and Paytm. Even the earlier ones, like MakeMyTrip and Naukri. So I think most of the consumer internet companies have been in Delhi and Bangalore. SaaS has been predominantly in Chennai, but Bangalore now has SaaS companies also, and BrowserStack is from Mumbai. So I think we have other pockets, but with Zoho and Freshworks and Chargebee and Kissflow and a bunch of other companies, we see Chennai as a hotbed for SaaS.

You just named a series of pretty big companies with real, global footprints. And I would think that that means you have the anchor tenants of the tech industry at this point. And then you get the people who leave those companies to go start other companies, which is like the very early days of Silicon Valley being played out again. Is that happening? Are people leaving Freshworks, and there's, like, the Freshworks Mafia out there like there's the PayPal Mafia in Silicon Valley?

Yeah. There was somebody who reached out to me two days ago with a sample website that they are putting on Notion. It's called the Freshworks Mafia: 16 companies on their list who are ex-Freshworks who have started up. I think that is happening. And it's a good thing.

Do you feel like you've built a playbook for how to create an ecosystem like this? I think everybody wants that kind of founder-believing, interconnected ecosystem. But it's a hard thing to build from scratch, and it doesn't just come because you say you want it. The mayor of Miami is out here saying, "We want to be a tech industry!" But it turns out it's more complicated than that. Do you feel like you've built a repeatable playbook?

I don't know if it is repeatable, but I definitely think we have a playbook. Now that you say it, I'm thinking we should probably try to open-source that playbook.

It's entirely volunteer-driven. And that's what makes it successful. A lot of times others have tried it — like you said, the Miami mayor, but similar attempts have been done by state governments in India — but it's not money that makes the ecosystem happen, right? It's not infrastructure or fancy buildings. It's really, truly a set of volunteers and operators, founders who want to pay it forward and share their successes. I think that's what is needed in order to make it successful. And I think in that sense, we probably have a playbook that we can open source.

Is there a reason that SaaS has become such a hub in Chennai? Is that your doing? You just forced everybody to start SaaS companies and they took off?

We're not forcing anybody to start SaaS companies! One of the things you have to understand is, if you are starting a company in the Valley, we used to have a very enterprise-y approach to scaling. You have the Workdays, and the ServiceNows and the Salesforces of the world, where you go up-market and you hire a lot of salespeople. But this new phenomenon of product-led growth — when you think about a Zoom or a Stripe or Asana or a, Atlassian, Freshworks — you now have a go-to market machine where if you build products that customers can come online and try, and if they like it they will use a credit card and buy, that is really the opportunity for anybody anywhere in the world.

India having an English-speaking, tech-savvy talent pool makes it a very natural choice for this to flourish. You certainly can be anywhere in the world, but if your product is world-class, you can win.

And I would think being globally focused winds up being a huge advantage in that space.

Yeah. Every business everywhere around the world is digitally transforming themselves.

I think the other advantage that India has is, we have a whole industry in Business Process Outsourcing and call centers, right? So you have people who are used to working night shifts, who service U.S. customers and European customers, they have been trained on language skills, accent and even selling to U.S. clients and European clients. So that also probably is a differentiator for India, where you can hire people who can work in the time zones in the U.S. and Europe and actually close deals, which may not be possible sitting here in the U.S.

So you have all these Western companies trying to figure out India, because it's a big market full of lots of people. And then you have companies in India that are thinking more globally. Are those two destined to run into each other in some way? Is there going to be a fight over who wins India at some point, or is that all being overhyped?

I think these are two parallel things. One is India as a market, the other is India as a startup ecosystem. I don't see an overlap in these two forces.

If you look at India as a market, one of the things India has been is an open market. Unlike China, which was heavily regulated, India has really let the best player win. So whether it's ecommerce or transport or delivery, I think everybody was given a field to play. And if Amazon did well, Amazon won. Flipkart did well, Flipkart won. And both of them can exist. And they both exist, right? That's been India's stance: It wasn't heavily regulated in favor of Indian companies. So from a B2B standpoint, I think it's clearly a non-overlapping opportunity for Indian founders to go global.

You've said that for a long time, being an entrepreneur wasn't cool in India. What do you account for that change over the last several years?

You have to understand, the social mindset for Indian parents used to be: Study well, go and get a job and be safe. Job security was more of a concern than wealth creation. And the majority of the population was middle class, and they never wanted to take any risk.

And also, a lack of opportunity: India did not have VC money till very recently — especially this early-stage seed funding was unheard of. Very little funding had happened before 2007, I would say. So I also remember a story where the Ola CEO said, when he was starting a cab company, his father said, "After all this education, you're starting a taxi company?"

So I think what changed is clearly parents seeing the success, when you see companies like Flipkart, and all the others that came after. Flipkart inspired a whole set of ecommerce companies, and I would like to say Freshworks actually started the B2B startup, so when people saw companies like ChargeBee, and they got funded, and it worked out, they're now employing hundreds of people. And founders also have transformed, professionally and financially. So I think it's changed the whole outlook.


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