Nilesh Patel, CEO Leadsquared
In the last few interviews we covered some of the successful startups from India and their GTM strategies that helped them grow into a real SaaS business, to continue with this endeavor further, we have interviewed Mr. Nilesh Patel, Co-founder, and CEO for LeadSquared, one of the leading marketing automation and sales execution platforms from India.
Nilesh has decade long experience in sales and marketing around Software products. Previously, Nilesh was the founder of Proteans, a recognized leader in the software product development services space. He helped build the company from scratch to 350 people strong serving over 100 ISVs worldwide before it was acquired by Symphony Teleca Corporation in 2010. Post-acquisition, Nilesh served as Vice-President of inside sales at Symphony before he started Leadsquared.
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Please provide a brief overview of the company and its product offerings?
Nilesh: LeadSquared offers sales execution, marketing automation and field sales automation platform focused on driving sales efficiency. We are focused on businesses that sell to consumers or large numbers of SMBs. We serve sectors like Education, BFSI, Healthcare, Real Estate, Automotive and others globally.
Please tell us how your organization is structured? Specifically, how is your GTM function structured? and how it has evolved over a period of time?
Nilesh: Like most product businesses four key areas of our organization structure are GTM functions (sales, marketing, demand generation), Customer Service (professional services, customer success, customer support), Product (engineering, product management), and Shared Services (admin, IT, finance). GTM function has the following teams — marketing, inside sales, field sales, demand generation, and sales enablement. GTM of growing businesses evolve relative to their growth velocity and we created new teams as we saw the need to evolve for our business. For example — we had only one sales team earlier but now divided teams into two, inside sales to focus on closing businesses that are low ticket and straightforward business use cases and field teams to focus on large-ticket customers and more complex use cases.
What kind of talent/skill do you look for as you build your GTM function? Has the requirements changed over a period of time?
Nilesh: The GTM function for which an individual is being evaluated will determine what exact skills we need to evaluate an individual. Let me take an example — so in case of talent being evaluated for sales, we will evaluate the experience of the person in selling relatively complex software products, communication skills both written and oral, their ability to learn quickly and if the individual is hungry and self-driven.
Requirements change as the business as the performance demands from individuals and their role changes. More importantly, as a company, we have also learned and improved on describing roles more clearly and improved on what skills one needs to be successful in our organization.
There has been a lot of emphasis on making GTM strategy Data-Driven. what has been LeadSquared’s approach on this front? and what have been the key results from those?
Nilesh: There is too much emphasis on data-driven strategy, while it is important but what is lost in most cases is that people forget the end goals. Foremost is asking the right question on what is the goal of your GTM — getting the first few customers of your start-up or scaling from few customers you have to 10x in numbers, growing in existing customer accounts, capturing a certain percentage of the market, or replacing competition. The strategy comes before the data interpretation, rather you start collecting data in format to ensure it helps you in executing your strategy. If the business is not fully clear on who the customer is or what market they are after then hiring a data scientist will not address the problem. I have also observed that most data collected and discussed in meetings are focused on driving more “activity” and not necessarily aligned to the business outcomes or revenue goals. Asking the right question in the meetings will ensure the right data is collected and interpreted.
What are the key metrics that you track to measure the success of your GTM strategy at Lead squared?
Nilesh: The key data points we track are bucketed by function but then interpreted together with respect to what goes in the deal pipeline and converts into business. For our business, MRR (monthly recurring revenue) is the key indicator of revenue growth and all GTM metrics are aligned to it. For example, if we send an email campaign to share a case study on driving bancassurance sales then we will measure the number of people who were reactivated from the campaign, how many of them inquired or were interested in the solution, of that how many went to deal pipeline and finally the MRR it generated for LeadSquared sales platform.
Which are the key tools/applications that you use internally that makes your GTM Function efficient and scalable?
Nilesh: LeadSquared is a central tool that we use to drive the core GTM functions like pipeline tracking, customer communication, and tracking. Other tools we use are a variety of tools from Google like analytics, webmasters, LinkedIn for prospecting, Zoom for running meetings, various other tools for collecting prospect data.
Do you work with Channel Partners and resellers to acquire customers? What kind of engagement models have you evaluated to work with Channel partners? What has worked best in your context?
Nilesh: We are in the process of building and scaling our channel partner program. The partners are of two key types like referral partners — they send business our way and take a commission, reseller and implementation partners — they send business to us and also drive implementations and on-boarding.
Making channel work for your business was a learning for us, it took us some time. Aligning motivations and goals of the partner is critical to building partnerships. This requires finding right partners, what works for one profile of partner type may not be interesting to others.
What is your current revenue mix between direct customers vs. through channel partners? How has it evolved over a period?
Nilesh: Revenue contribution is high single-digit as a percentage of our revenue and the plan is to grow that to a higher double-digit in a few years.
Many B2B start-up founders believe that some industries (financial services, pharma, media) tend to be much quicker, more sophisticated and have greater buying power than others, do you have a similar thought and experience?
Nilesh: The speed with which someone will adapt your solution will be a function of the problem getting solved by the product. For example, products that increase revenue will be adapted faster versus products that save costs. Our initial success was in education, not a market most people go after but for we got early success and continued to work on it and we’re lucky to then participate in the ed-tech revolution by being a partner to top all the ed-tech firms in India.
Most of the start-up community that we work with are early-stage companies, wherein the majority of them are generating less than USD 1M ARR. LeadSquared is at different scale altogether. It would be good to hear your thoughts on how the GTM function has evolved for LeadSquared over a period of time and how it looks today?
Nilesh: The GTM for getting initial customers was a hustle for us probably similar to many others, somehow getting the first ten to twenty customers to try your product. Our customer retention was poor in the beginning, we could have done a lot better by listening to the feedback and implementing the changes needed to retain them. Another aspect I will redo is to think of GTM at the time of product development, if it is aligned then it will be a lot easier to get access to the initial audience.
Later as the business grew the GTM evolved basis the focus on market and type of customers in that market. Fundamentally the core aspect of GTM is to make it easy for the buyer to understand your offering in their language and if possible give them an opportunity to try the solution.
When deciding on your pricing model what has worked best for LeadSquared in the initial stages? freemium model or have customers started by purchasing your product up front? How has the pricing model evolved over a period?
Nilesh: From the beginning, we had a 14-day free trial and we still offer that today. As we moved forward in our evolution and sharpened our offering on sales, it was clear that the freemium strategy was not right for us as our audience was not ready to set up and use the product on their own. Our focus then shifted to build value in the sales cycle to ensure the value is understood before the customer made the purchase.
Our core pricing model has not changed much since the beginning. However, as the product evolved we created new features that are priced in addition to the core offering.
What recommendations can you give to early-stage startup companies as they try to establish their GTM function?
Nilesh: The GTM I believe will be a function of the market company is chasing. For consumer-centric or consumer-like centric solutions — adoption and usage is the key metric. For companies creating business software that is sold at a higher price getting the first one to five customers in the door is crucial, but what will be critical is to ensure you fine-tune your product from the feedback. Getting more customers at this point will be less valuable unless you have found product-market fit.
In India, how are you acquiring customers? Is the strategy different from the other countries?
Nilesh: In India, we use all methods — inside sales, field sales, partner channel to acquire customers. Outside India we do both direct along with partners in important markets like the US, for other markets we do only selective customer acquisition directly and for all remaining, we work with channel partners.
The final question, what impact has the pandemic created on your current GTM plans, and how do you plan to overcome those?
Nilesh: Like most companies, we doubled down our energy on customer acquisition. GTM method has not changed much, however we aligned ourselves to market areas where customers have the buying power or identified new market pockets where buying has substantially increased.