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
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
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
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
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
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
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
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
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.