How can a software company reach success in today's market without losing its core vision and principles? When is the right timing to take your business to an IPO? And what makes a successful IPO anyways? Many organizations change their business focus to make specific companies and customers happy. As a result, their products become irrelevant to the market. Some don't have the infrastructure and metrics to go public or act at the right moment.
To help businesses tackle this problem, we asked today's guest, Tyler Sloat, the Chief Financial Officer at Freshworks, to share his experience and expertise on how organizations can develop easy-to-use products for the masses and how to correctly measure the scale, growth, and efficiency required to go public.
In this episode, we discuss:
How Freshworks' products allow customers to engage with their customers and employees
How a company can determine the right timing to go IPO
Why going IPO became a historic event for Freshworks and the software industry
Why organizations going IPO must focus on operational readiness and execution readiness
Focusing on Customer Needs
Many companies come on the market with products that don't match their vision. Some organizations lose sight of the macro customer on the market. Businesses should ask themselves what all customers need as opposed to one or two. That way, they can design their products as easy-to-use for the masses to serve more people.
"If you don't have the product and technology and if you don't stay true to building products right away and really focus on the customer, it's going to catch up to you. That, I think, is probably my biggest learning of all the companies I've been with," Sloat said.
From Startup to IPO - What Makes a Successful IPO
Freshworks is an Information Technology and Services company that designs products for the end-user. Their main product is Freshdesk which has customer support software at its core, allowing customers to engage with their customers. Apart from Freshdesk, the company also has products like Freshsales, Freshserver, Freshmarketer, and others.
A significant event for Freshworks is that it recently went through an IPO. To become a public company, Tyler admits that businesses need operational and execution readiness. Operational readiness is when you can close your books on time and have systems that can help scale and help the company operate. And also compliance. With execution readiness, you need to do what you say you're going to do, and you have to forecast your business. But also, you need to be able to see around corners to operate as a public company.
"Freshworks has products that help our customers delight their customers," Sloat said.
Acting at the Right Moment
Coming out of India, Freshworks set an example for many other organizations. Tyler believes that India is probably being viewed more as a destination of outsourcing for businesses. But Freshworks is a product business, and it can build world-class software.
Deciding to go to an IPO requires acting at the right time. Tyler believes that this has to do with the operational readiness and the execution readiness that he mentioned. Freshworks has the rare combination of scale, with over 300 million dollars; growth, in the 40% range; and efficiency, where the company produced cash in the last twelve months. Tyler believes that they earned the right to go public based on these metrics.
The question is where they can operate as a public company. With the infrastructure and the metrics, the time was right for Freshworks to go public.
''You wake up every day and you try to make a little bit more progress on continuing to build the next great software company,'' Sloat said.
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