“Be The Devil that Enterprises Know”
Interview with Tydy CEO and Cofounder Kiran Menon.
Selling to enterprise clients is one of the biggest challenges faced by B2B startups. It’s not necessarily any easier when deciding to sell to enterprise clients from the very beginning. That’s one of the lessons that Tydy co-founder Kiran Menon has learned. Tydy is a SaaS HR and operations platform that was built to target enterprise clients.
Kiran joined startup coach Roland Siebelink on the latest episode of the Midstage Startup Momentum Podcast. They discussed why Tydy decided from the start to target enterprise customers and all of the challenges and learnings that have occurred along the way.
- How being focused on enterprises helped to build the product.
- How a product can be more appealing to enterprise clients.
- The key to expanding accounts with enterprise clients.
- How quickly should you be able to show the value of your product?
- Why fundraising is different when enterprise clients are your target.
- The two biggest traits that any entrepreneur should have before starting their journey.
Roland Siebelink: Hello and welcome to the Midstage Startup Momentum Podcast. My name is Roland Siebelink and I’m here today with Kiran Menon, who is the CEO and co-founder of Tydy. Hello, Kiran.
Kiran Menon: Hi Roland. How are you?
Roland Siebelink: I’m very good. Thank you for joining, all the way from Bangalore, I believe.
Kiran Menon: Yes, that’s right. Thank you. Thank you so much for having me on the show. Hoping San Francisco is enjoying good days as well.
Roland Siebelink: Much better days than about a year ago. That’s for sure. I’m sure that’s the same for everyone in the world. We are far more connected to each other than we think.
But anyway, enough about pandemics. Let’s talk about Tydy, Kiran. What does your company do? Who do you serve? And what huge difference do you make for people in the world?
Kiran Menon: Sure. Tydy is a SaaS product, a low-code platform, which makes it easy for global HR, IT, and operations teams to collect data, integrate it across the enterprise IT ecosystem and automate the flow of work. To really drive business results across the employee life cycle. Large enterprises use a platform like Tydy to automate processes like candidate marketing, onboarding automation, benefits management, off-boarding, and also alumni engagement, which is starting to become really important for a lot of companies - the people who have left, keep them engaged. Hopefully, they’ll come back or they’ll provide referrals.
Tydy uses a lot of that data to personalize the entire experience from an employee perspective. And at the same time, companies like Unilever, AB InBev, Genpact, a lot of them save up to 40% of their HR tasks, which are reduced, which results in about 18,000 plus man hours saved per company. It’s also a great efficiency booster from a company perspective.
Roland Siebelink: Okay. Very, very interesting. Kiran. When you say it’s a low-code platform, I’m assuming this means it’s not just a standard out-of-the-box SaaS solution. It’s really focused on customizing workflows to the specific needs of that large enterprise.
Kiran Menon: Exactly. And low-code specifically because we all know large enterprises have a ton of different systems, fragmented systems that don’t talk to each other. A lot of legacy code, as well, within that ecosystem. There are bits and pieces that need to be customized when you get into an enterprise. Though 80-85% of our product is out of the box, there is still an amount of integration and customization work that needs to happen to really bring together the IT ecosystem within the organization.
But the advantage is once that happens, once Tydy is deployed, it starts becoming really easy for an organization to plug in and plug out processes, apps, systems, and Tydy becomes that data backbone for the organization.
Roland Siebelink: Very interesting. And you mentioned some very compelling customer names there. Unilever, AB InBev, a few of these others. Can you talk a little bit about the traction that you’ve had?
Kiran Menon: Yeah, sure. We started selling it about 2017, early 2017. We started with a couple of quick POC clients. I think one of the things that we were very sure of from the beginning was that we wanted to go after enterprise clients where there was fragmentation. A lot of these problems were very, very prevalent within the organization.
We were very focused on enterprise clients and it really helped us build the product for enterprise as well. Long story short, today, we’re in 30-plus countries. We do hundreds of thousands of onboarding and process automations across the globe. Over a million-plus events every quarter that run through our product. From a scale perspective, this continues to grow. I think the last 12 months have been significantly good for us. With the pandemic, a lot of companies are looking to transform these processes, virtualize, digitize their processes and automate a lot of their employee processes. We’ve obviously had a good run in the last 12 months as well, and really starting to see an uptick from a traction perspective.
Roland Siebelink: That’s awesome. That’s really cool. And very impressive if you’ve only started selling in 2017. A lot of the startups and scale-ups that I talk to would love to be selling to enterprises, but yours is one of the few where the product has really been designed for enterprises from the ground up, as I think you’ve called it. What makes for a product that is very attractive to enterprises versus more of a box-standard SaaS product that in reality is really built for consumers, prosumers, or small businesses.
Kiran Menon: I think there are a couple of really big differences. One is the configurability of the end reports becomes a really big selling point within the enterprise. If you can give them the ability to pull up data, slice it and dice it the way they want with multiple filters - because you’re talking about an enterprise that has multiple locations. A company like Unilever, a company like Genpact or EXL, they’re spread across different continents. You need to give them the ability to slice and dice the data on the dashboard across all of these different regions. Multiple checklists that they need to complete. That’s a big I think game-changer from an enterprise perspective. You need to be really robust from a data infrastructure perspective.
The second big thing is security and the due diligence that you go through during procurement when you’re actually going into a new client environment. The security of your infrastructure. How GDPR compliant you are. How CCPA compliant you are. What kind of infrastructure fallbacks do you have? I think those start becoming really, really critical from an enterprise perspective.
The third one, which is a smaller nuance, is you would be very hard pressed to find a company that sold to a large enterprise and not having had to customize some part of their product or service offering. These are companies which have been around for years. Built processes over 100,000 employees, 50,000 employees, whatever it may be. There are nuances which are very specific to that company. And so, there is a need to build a configurability into your product which will help those companies mold the product to their process. I think that’s a nuance that I would talk about. Those are the top three.
Roland Siebelink: Jumping on that last point, a fight I often see in growing startups, B2B startups, is that the sales and marketing people would love to start attacking the large enterprises, but the product and engineering people hate that fear of customization. How has Tydy dealt with that?
Kiran Menon: It was interesting for us as well because it was a learning journey. The three co-founders, we each had about 17 years of working with large corporations before we started Tydy. We’d seen our fair share of all the problems that come when you work in large enterprises. We knew there was no way to go around the need for configurability because that was just a necessary evil. The way we dealt with it from a technology and infrastructure stack perspective was that we started building simple things. If you’re talking about some of the largest HR systems in the world, not all of them necessarily have APIs, for example. Many of the companies would be using legacy versions or different parts of the business would be using different versions. And so, we needed to start building generic connectors. We needed to start building generic ways to fetch data and make sense of it on the back end without having to do a lot of manual work.
A lot of the data infrastructure that we were building was very specific to actually capturing that data, making sense of it, and then being able to translate that into five different flows into five different systems.
Roland Siebelink: That makes a lot of sense. I also wonder what is the difference in the pricing approach? The expected close time or lead time for a contract as well? The many startups that we coach or that I facilitate, when they want to move into enterprise, what they’d really like is for an enterprise to buy many many more seats without having to go through all the negotiations. That’s not really reality, right?
Kiran Menon: I wish it were, but no it isn’t. We often find ourselves looking at enterprise-wide licensing, which comes up very often. We also start finding requests like white labeling because enterprises want to have everything on their brand. They don’t want to have a third party, for example. But one thing we’ve been really good at until now is sticking to our guns from the brand perspective. Anyone who uses the Tydy product - whether it is a new hire who’s getting onboarded, whether it’s an HR exec, IT exec - they’re logging into the Tydy infrastructure, so it’s a pure SaaS play. Once they log in, then things start getting customized to the business, to the branding, and all of those things. But if you were to download the app - it’s the Tydy app. If you were to log in, you go to Tydy.co and log in. That’s one thing that we’ve been very good at.
Roland Siebelink: A little bit like Slack, really?
Kiran Menon: Yeah, exactly. We’ve been good at that. But I think from a licensing perspective, what we’ve also realized is most companies don’t understand this when they’re selling to enterprise - and it’s often looked at as a bad thing from a Valley or a VC perspective - is there is a 20% - whatever the budget is for that software in an enterprise, let’s say it’s a hundred thousand dollars - 20% of that on top of that hundred thousand dollars is always saved as a services cost, an implementation budget, as a deployment budget. And as SaaS providers, what we often think about is that services revenue is bad revenue. It’s not the best revenue to show on your books. What’s even more stupid is to leave that $20,000 that a company has already budgeted for when they’re buying a hundred thousand dollar software piece.
One of the key things that we keep focusing on is that, “Hey, we’ll sell you a hundred thousand dollar license, for example, but we’re also going to take that $20,000 services fee as a deployment fee or as an integration fee or as a go-live fee. I think that’s the other nuance that when I speak to a lot of other SaaS founders that most people are not aware of, which I think starts becoming a very big opportunity to keep increasing the foothold within the enterprise.
Roland Siebelink: At the moment, it sounds like your target pricing is around 100K, plus services, plus that upfront capital budget. What are you doing to get to this million-dollar client range?
Kiran Menon: There are a couple of things that we’ve seen enterprises really help with. One is expansion of accounts is a very, very real possibility within an enterprise. You might be selling into a business unit or you might be selling into a region, but the ability for you to really start doing this globally is a huge expansion bucket that I think you need to start exploring within the first six to nine months of deploying the product. Very often, within six to nine months, you are or you should be able to show value. And within those six to nine months, you need to start expanding geographically.
The second thing is once you have a product in an enterprise ecosystem, it’s very tough, especially when there are integrations. If you’re a standalone, it’s probably easier for them to pull you out. But if you have a lot of integration - which run the flow of work, which they’re used to, - it’s very tough for them to take you out. If you are continuing to add value, that’s base zero, and you start adding products on top, it becomes imperative for them to start buying those products from you because it becomes beta for them to start using multiple vendors. If you are already there, integrated in the flow of work, it becomes very tough for them to start capturing different products and adding it if you provide the same service. They would much rather go with the devil they know than the devil they don’t.
Roland Siebelink: And that explains the whole stack model of the likes of Salesforce and Oracle and IBM and all the others.
Kiran Menon: Exactly. It’s just super important for you to keep adding products, which will increase the wallet share within the enterprise. Those are the two primary ways. And I think it’s actually much easier than most people assume. They assume it’s going to be very tough to expand within an enterprise. But if you show value within six to nine months, it starts becoming really easy to get that ball rolling.
Roland Siebelink: I have a few candidates of opposed concepts for you that I’d like your quick opinion on. The first is one salesperson responsible for both landing and expanding or separate salespeople responsible for landing and for expanding?
Kiran Menon: Given my previous experience and also what we’re seeing with Tydy, it is two separate roles. Landing is a very different role. You’re a hunter approach that you need to go after from an enterprise perspective. Try and close it, be quick, and go through the process. But upselling and increasing the wallet share is very much a nurturing role within the enterprise. You need to create that relationship, build that relationship. The weird part is you shouldn’t look like you’re thirsty for money. You need to build that relationship once you’re within the organization and then start building it from there. I think it’s two very different roles, at least in my perspective.
Roland Siebelink: Okay, very good. And then you’ve talked a lot about customization and adaptation. Two schools of thought there as well. Two separate teams, so a core product-engineering team completely isolated from anything customized or should it be one team that does whatever is the priority?
Kiran Menon: Well, I guess if I knew that answer, I would be at a very different scale. Suffice to say that we’re experimenting with it as well internally. I think what we’re starting to see is there definitely needs to be a dedicated R&D/product team. And there needs to be a dedicated delivery team. Now what lies in the middle is something that we’re trying to figure out.
Roland Siebelink: What have been some key disappointments or things that you’ve been struggling with other than the setup of engineering that you already mentioned?
Kiran Menon: I think one of the key things that I would tell my fellow startup founders or anyone else is be very sure when you want to raise and how much you want to raise. Especially if you’re going down the enterprise spot, it is going to take time. It’s much easier to build a product for - I wouldn’t say it’s much easier, it’s just different when you need to build a product for SMBs and get it out there, get feedback, and then make quick iterative changes. And you continue down that path.
You will still go from 10 clients to 20 to 40 to 50. It’s not the case with enterprise. The moment you either get into the enterprise game or if you start from enterprise, it is going to take much longer to build a product that an enterprise truly needs. You need to be well-invested. You need to have good capital backing to be able to run that entire process because it will take longer to show results than it would from an SMB perspective. I think that’s a big learning for us as well, which definitely takes a much longer time than we would have expected.
Roland Siebelink: And thank you for being honest that fundraising is not always the easiest way because I think there’s a lot of marketing out there that makes it feel like it’s great. But many founders privately tell me otherwise. And then in public will still say: “Actually it was a breeze for us. It was so easy. Our product is just amazing.”
Kiran Menon: I would love to be one of those guys, for sure.
Roland Siebelink: Well, let’s just say that even the ones who say so in public may have a very different experience when you talk to them in private. But I think that’s part of a little bit of the game that’s being played.
As a founder, Kiran, what lessons personally have you learned about yourself as a founder, as a startup guy, and as a leader that you want other founders to also think about?
Kiran Menon: Oh, it’s tough. It’s so tough. As I said, 16, 17 years in the corporate world seemed like a breeze. Sometimes I do think about “Why did I even think about getting into entrepreneurship?” It’s got a challenge for you every single day. Just like you mentioned, Roland, from a marketing perspective, it just seems so amazing. Start a company, raise dollars, go out, sell it, and then live on your yacht and start your second startup, third startup, whatever it may be.
Reality is just so different. For me, that was the biggest learning about myself as well, is that it requires a huge amount of patience and a huge amount of perseverance. I think if you’re not willing to persevere through the journey, it’s going to be very, very tough. You need to be able to do this for eight, 10 years, 15 years. It’s not a three, four year journey. When I started, I thought it was going to be a five, six-year journey. But it’s going to be a 10, 15 year journey to make it a success.
Roland Siebelink: But one that’s exciting every day. That’s not something you could say about your corporate job, right?
Kiran Menon: Absolutely. As I said, sometimes I think, “Why did I quit?” But most of the time I’m saying: “I can never go back to a corporate job.” Totally spoiled.
Roland Siebelink: Yeah. That’s definitely a noted feeling. Absolutely.
Kiran, listeners that have made it this far must be very excited about Tydy. Where can they find out more about Tydy? What should they download, if anything? And what are you looking for most in terms of where people can help?
Kiran Menon: Tydy.co is the website that they can catch us on. On Twitter and Instagram as well. We’re Tydyco as a handle.
Roland Siebelink: And you spell that T-Y-D-Y, I believe, right?
Kiran Menon: Yeah. Yes. That is T-Y-D-Y. And I think one of the key things that we’re looking at at this point at our stage and growth perspective, we’re looking at definitely building a team that can come in and create this world-class company and continue to service global clientele. It’s a very different experience from a startup perspective because like you said we started working with enterprise clients and our product is built for enterprise clients. The entire thought process, the entire client interaction and communication is also at a level where we’re talking to CHROs and CIOs on a daily basis and their senior VPs. I think we’re looking at people who could join us and that’s my number one priority nowadays is to look at people who could join us in building this company together.
Roland Siebelink: You have to have the enterprise bug, it sounds like. You are passionate about working with big corporations.
Kiran Menon: Exactly. And really making that change. It’s so interesting because we’re actually affecting every single individual who’s joining one of these companies. We actually get a ton of testimonials, not just from the HR teams or the CHRO or the CIO. We’re actually getting it from freshers who are joining the company, saying: “This has made my life much easier.” And from people who are joining the companies and working with these companies.
Roland Siebelink: That is awesome. Getting good testimonials causes a huge network effect too. People talk to their friends. That’s awesome. What kind of jobs, in particular, are you looking to fill most.
Kiran Menon: I think like most of the world, engineering. It’s definitely up there on the list. But we’re also expanding our sales and marketing team a lot, especially with a US focus. Those are two big opportunities.
Roland Siebelink: And in engineering, any stack, in particular, people should know?
Kiran Menon: We’re primarily angular and node. Fundamentally we’re also building up our data science team at this point. We’re capturing a ton of data about every single employee. And so, we need to be able to churn that from an analytics and insights perspective. That’s definitely another big area.
Roland Siebelink: Very cool. Okay, Kiran. I’ll repeat that people can go to T Y D Y dot C O to figure out everything. Kiran Menon, thank you so much for joining the Midstage Startup Momentum Podcast. It was such an honor having you, and thank you everyone listening.
Kiran Menon: Thank you. Thank you, Roland. Thank you so much for the opportunity and this has been great.
Roland Siebelink talks all things tech startup and bring you interviews with tech cofounders across the world.