Sramana Mitra: In selecting customers to go after, what is the positioning of your company? Are you going after large enterprises? Are you going after mid-market? Are you going after small businesses? Each of them has a slightly different go-to market strategy. The inside sales point that you raise is very interesting.
Freshdesk, now Freshworks, is a company that we watched grow from the very beginning. They were in the program for three years. That company actually didn’t go to the enterprise at all until much later in the game. Now they’re going after enterprise deals by doing very large deals and so forth. But when they started, they acquired customers including closing paying customers all on the phone and internet. It’s fully inside sales driven go-to market strategy and they did it all from India.
They acquired global customers from sitting in India. Actually when they raised their series A, which was a $1 million series A from Accel, they already had paying customers. That’s something that we decided collectively. We were going to validate all the way including pricing model, revenue model, customer acquisition strategy, and customer acquisition cost. That worked very well.
It only worked because their target customer base is for small businesses. This doesn’t work as well if your main target customer base is enterprises. These days, enterprises are also very keen on working with startups. You can open conversations and start filing with enterprises abroad. But there is a higher touch selling needs that you have to pay attention to. I’ll let you weigh in on this point.
Yash Hemaraj: Clear point on Freshworks. That’s one of the companies that we highlight when we talk about what is the potential for Indian founders and SaaS. The big advantage point for Indian founders is now you can start small. Deliver on the customer success. You can do that initial customer acquisition through completely inside sales model, but then really work with the customer to make it successful and that will lead to larger and larger opportunities over time.
As we designed Arka Venture Labs programs, one of our key approaches to this is one-on-one mentoring. What we saw with a lot of accelerators that have been set up is they tried to set up a program for three months and fit all the companies through that three-month model. What we saw, observed, and also discussed with a lot of entrepreneurs was that every company is different. A company that is targeting a factory floor is going to have a different sales cycle compared to a SaaS business focused on the sales and marketing vertical.
Sramana Mitra: An enterprise account in three months is going to go absolutely nowhere.
Yash Hemaraj: It’s not going to go anywhere. Sometimes you don’t even get your first meeting during that time or you don’t have a POC set up. That’s where our need was. Our program has to be curated – one-on-one. When we designed the program, our goal was not to start 15 or 30 companies in one cohort but rather have a continuous admission process, have a cohort of about 10 companies every year, and build a cohort of 30 companies for a period of three years at least.
That’s how we’re approaching the market that allows us to dedicate the amount of time that our entrepreneurs need in order to get that one-on-one mentorship, even when you’re connecting them with mentors. Just generic advice about how to build companies. But on top of it, positioning the company in a particular market is such a curated approach because every company is different.
The markets are different. The customer bases are different. Their customer segments are different. You’ve to dedicate enough time and bandwidth to these companies. That’s the goal of this platform – be able to provide this framework and one-on-one coaching.