SaaS Scaling Secrets
The SaaS Scaling Secrets podcast reveals the strategies and insights behind scaling B2B SaaS companies to new heights. Dan Balcauski, founder of Product Tranquility, leads conversations with successful SaaS CEOs, exploring their challenges, triumphs, and the secrets that propelled their businesses to the next level.
SaaS Scaling Secrets
Betting Big on Enterprise from the Beginning with Prabhu Ramachandran, CEO of Facilio
In this episode of SaaS Scaling Secrets, host Dan Balcauski talks with Prabhu Ramachandran, CEO and co-founder of Facilio, an IoT platform aimed at enhancing operational efficiency in buildings. Prabhu shares his extensive 18-year experience in the SaaS industry, beginning at Zoho and transitioning into founding Facilio. The conversation dives into strategies for scaling a global SaaS company, the challenges of introducing new technology in the traditional real estate sector, and critical lessons learned for successful expansion. Prabhu emphasizes the importance of a strong team, focused market strategies, and having a standout product. Additionally, he provides insights into navigating enterprise sales, the importance of charging for pilot projects, regional market strategies, and leveraging partnerships.
00:27 Meet Prabhu Ramachandran: CEO of Facilio
01:25 Prabhu's Early Career and Zoho Experience
02:55 Dreams of Global Impact
03:34 Founding Facilio: The Building Operations Revolution
07:29 Challenges in a Traditional Industry
09:00 Strategic Growth and Market Penetration
10:48 Enterprise Sales and Product Excellence
20:38 Navigating Different Markets
25:27 The Importance of Partnerships
27:22 Final Thoughts and Advice for Founders
32:33 Conclusion and Contact Information
Guest Links
www.facilio.com
https://www.linkedin.com/in/rprabhu78/
Hello, and welcome to SaaS Scaling Secrets. I'm your host, Dan Balcauski, founder of Product Tranquility. Today, I'm thrilled to be joined by Prabhu Ramachandran. Prabhu is the CEO and co founder of Facilio, a company that offers an IoT platform to make buildings operationally efficient. Prabhu's career spans over 18 years of product, business, and customer experience focused on enterprise scale software for IoT based connected services, sustaining building solutions, and telecom network management. Under Prabhu's leadership, Facilio has expanded globally, managing over 200 million square feet of built space across multiple continents. And he even managed to turn one of his early customers into an investor. Today, we'll dive into his experiences scaling a global SaaS company, the challenges of introducing cutting edge technology to a traditional industry, and the lessons he's learned. Let's dive in. Prabhu, welcome to the show. It's great to have you here.
Prabhu Ramachandran:Thanks, Dan. Thanks for inviting me for the show.
Dan Balcauski:Well, I'm very excited to dive into all of your journey with Facilio. But first, I want to learn a little bit about More about you. So could you briefly just introduce yourself? Obviously I gave the audience a little taste in my intro, but you know, tell us a little about your journey in the SaaS world.
Prabhu Ramachandran:Yeah. So my name is Prabhu Ramachandran. I'm a co founder and CEO of Facilio. I started my professional journey in 2000 with a company named Zoho Zoho is one of the most successful SaaS product story out of India. I spent around 17 years at Zoho all along, I have been working in one single product, which was the earliest product from Zoho, where we sold enterprise software to monitor telecom network infrastructure. So in that 17 years I got exposure into how to build from India, sell globally. How to build and scale enterprise SaaS products for global market, predominantly around remote monitoring, data analytics, and bringing in technologies like cloud, IoT, mobile apps together. So that has been my professional background. Yeah, from my early
Dan Balcauski:Well, that's fascinating yeah, Zoho's obviously made a global impact, very familiar with their business. So probably learned a lot of very key lessons there. I want to go back even earlier. I find that, founders are an interesting bunch. And so I'm curious if we went back to early Prabhu, like say years 12 to 18 say we were observing you, would we have noticed anything unusual that would portend this entrepreneurial future?
Prabhu Ramachandran:I used to dream a lot about like doing something global coming out of India, right? The Western world is always fascinating. And during the nineties, You would see a lot of people who graduate from India, they go to other countries, work there, build their career. So this whole global perspective and making it big was always very fascinating. I used to dream a lot think about it a lot. So I always had this itching thing at the background that we had to really make it a big global.
Dan Balcauski:So, so lots of dreaming in the early Very cool. Well, and so what led you to start a company in the building operation space with Facilio?
Prabhu Ramachandran:yeah. So touching upon the early days and I come from a agricultural background and from that there, there is always this passion towards doing something bigger. And during my Zoho days I mentioned that I was working in a product where we are selling software to telecom industry. If you see the telecom industry from early 2000s to, like 2010 15 time the industry was fast evolving from landline telephones to mobile to 2G, 3G, and then cloud came in. So constantly we have to evolve the product that we were building, like what products. What value it offers for customers because market was changing fast and that put me into drill off like constantly like how do you build? How do you keep up with the market? How do you predict where the market will go? So those things, I got exposed to those things. And then around 2010, when the internet of things picked up, I took the platform that we are selling at Zoho and then added IOT capabilities into it. Like IOT is all about how do we connect with machines, use the data to create value for businesses. So that got me exposed into multiple industries where IOT can go and create value. And one of the very, Fascinating industry I observed is real estate where real estate is very critical in general for humans, right? We spend 80, 90 percentage of our time under some building, either it is home or office or hospitals, or you go to watch a movie, go to hospital go to restaurants.
Dan Balcauski:Hopefully not in the same day. That's probably not, hopefully it's not your Saturdays. Watch a movie and then go to the hospital.
Prabhu Ramachandran:Yeah yes. But somewhere like 90 percent of the time you're under a roof, right? And but somehow this industry it's mission critical, where it plays an important role in human life. But the penetration of even simpler technologies like mobility, cloud, IOT is very, like, this industry is lagging behind in terms of tech. There is a decent level of tech in construction of buildings, but after the building gets constructed and they are really being used, in that phase the whole operations is very manual, very legacy way of doing things. The most of the tech is around physical technology like sensors and automation systems, but the penetration of software has been very less. And, if you've seen last one, one and a half decades, A lot of other traditional industries like banking transportation has evolved fast with software driven technology. So I saw that this is one very large market where we can really go and play, make it big, create tremendous value for customers doing what we have done in the past. Like how do you bring technology around data? IoT Mobility, Cloud, and all of that. So that, that is the starting point of like when we started to build our own startup we picked buildings as one area, within buildings, Operation side of building, not the construction side which is where we saw that there is tremendous potential to create a large company.
Dan Balcauski:Mmm. So it's getting some experience with the rapidly growing world of IOT. Kind of open your eyes to some possibilities and then you see this Stagnant or slow moving, maybe a laggard type industry where you're like, wait, this, these folks haven't changed in a while as a potentially disruptive opportunity, I could see how those would come together. I'm curious though, because, obviously those laggard type industries, it's. There's probably a lot of reasons why they're laggard for a reason and, very resistant. So I'm curious, were there, initial challenges that you faced kind of going into, an industry like that is maybe not, a early adopter of, the latest and greatest technologies? Like, were there ways that you learned that you had to navigate in order to, build sort of credibility and trust within a market like that?
Prabhu Ramachandran:Yeah, very good question. See this, like in startup, like what you start is like, I see it as like parents. We can't choose our parents. Like that we got passionate about somehow about this whole buildings How do you apply technology in buildings? But as you said the market is In this whatever situation, because there is a reason, right? And it has been very slow moving, more physical technology driven market. We sensed that once we started working on it, we sensed that, but the potential to disrupt that market and create value is very huge. That was what was driving us. So what we did is if you have to build a large company, we knew that this is going to be a very long game. And we have to play very strategically in terms of what we build first, how we build, which market we pick up. How do we get initial success? And then how do we scale? So a few things we did right is we start, we decided to raise money and build a company because you need a lot of ammunition to go and crack this market. And we were very fortunate to go and raise money. Our seed funding on day zero, we raised the money and then started the company. That gave us the opportunity to strategize and execute. And then when we started, even when within 18 months, once we had early validation of what we are building from some really large real estate companies, we went and raised our Series A. All because A, this is a large market and it needs a very long term view on the market. It's not going to be like a typical SMB we do something two, three years, you get into a million and then do 3x, 3x. So we know that it's not going to happen. We have to execute differently. In terms of scaling we were very calculative. We sort of sense that it is going to take two, three years to build what we really want to build that can actually go and crack this market being very legacy and dominated by large companies. So that, so everything is very planned and very strategically planned, both what we are building, how we are building and when to raise all those things came in place. During our initial days,
Dan Balcauski:Interesting. Interesting. Well, and you outlined a bunch of breadcrumbs, which I think will, I don't even know if we'll have time to go pick all of them up. But, so one thing that you mentioned was, this wasn't your sort of high volume SMB play, kind of realize that off the bat. I would say like many early stage teams are hesitant to kind of quote unquote go enterprise because they don't believe their product is mature yet in the early stage to meet the needs of those demanding buyers. I guess was selling to enterprise your idea from day one, like how did you
Prabhu Ramachandran:yeah, so we are very clear that we want to go mid market and enterprise, not SMB mainly because the problem we were, we are solving today is more aggravated with larger customer. If somebody owning two buildings can always. Some more managed things compared to a company owning like 100 buildings. It's very, it becomes very complex with so many different locations, different team, different level of outsourcing. So the problem gets more aggravated as the customer size increases. So there is a lot more value in going to mid market and enterprise. So from day one, We wanted to go mid market and enterprise. And in a way, that is what we know. All the co founders, as I said earlier, we spent 17 years at Zoho and that was a, the product that I was managing was an enterprise. Product for telecom companies. So we got used to going to enterprises, selling, doing larger deals. We are comfortable with that. And even strategically we picked this enterprise market. Yes SMB in some ways it is easier. Enterprise has, even though it's there's a lot of difficulties, but there are also great things Like, for example, in our space, once we crack a customer, the churn is very less. Customers want to do business with you as long as possible, as long as the product is up to date and we are not making the customers very unhappy. They want to stick with it. Churn is very less. Expansion potential is very high. Those are great things about mid market and enterprise.
Dan Balcauski:Yeah, well, I, that totally makes sense. That the value scales with the complexity of the customer's situation. I guess going back to, those early days, I, if you're trying to sell to enterprise, early on, I guess, did you guys run into that issue with. Sort of lack of trust or credibility with those enterprise accounts, or I guess, lack of product maturity or like how did you sort of, address those, out the gate, because I think that's what a lot of people struggle with is like, okay, like, yeah, it makes sense to build that eventually, but we've, they've got a, an RFP checklist 200 items long and we don't have most of the stuff most of those capabilities yet. I'm just kind of curious how you guys thought about that and how you address that in your market.
Prabhu Ramachandran:yes. So obviously the sales cycles are very long, 18 plus months very process oriented and usually multiple stakeholders. All those are known problems in enterprise, but when we started because we knew this we planned for it. So what we did is initially we picked one market. We picked Dubai, as a market the reason being we're building out of India and we want to pick a market. which is easily accessible closer to the Western markets in terms of affordability on price and adoption of technology. Dubai is one great market, which is small, but very concentrated. Whole of Dubai is about like very big, fancy buildings. Okay. And the culture there is they want to try new shiny things. So, and Dubai is like three hours flight from a place where we are building out Chennai. Very easy to get visa. So we picked that market and then founders started like spending a lot more time in the market, and among the enterprise customers, what we did is we went after the largest companies in Dubai. We went after the companies that own, say, Burj Khalifa, that type of very fancy building, and then started pitching, showing them the dream land, the way real estate is now.
Dan Balcauski:Interesting. So that's a, so I heard a couple of really interesting points there where, so it's a very focused effort. Concentrated industry small enough community where you could also sort of leverage, the efforts you were making in terms of organic word of mouth within that smaller tar valuable but very targeted community engaging them with paid pilots, a lot of thought leadership and then Over time, as those were successful, leveraging those as credibility proof points as you started to attack other markets and eventually started selling. I'm curious, there's a point there, because this is a question that I get asked quite a bit. How did you make the decision around doing paid pilot versus not? Because often folks are like, well, we're still sort of at beta. These folks are doing us a favor. Like, should we charge them? Like, how did you guys think through that particular decision?
Prabhu Ramachandran:it comes to pilot I, I strongly advocate against doing free pilot, particularly for enterprises. So even from earlier days we always charge something, even a small few thousand dollars with customers because that helps us to go through the enterprise bureaucracy in terms of approvals and all of that. And because somebody is committing even a small money, they want to see some output. From the pilots. So that was part of the strategy. Second is as an extension of it is when it comes to selling into enterprise We are very particular about the product being like multi x better than what customers are used to. Because For a startup, right? When you go in an enterprise, you are competing against very large companies. And why would a customer bet on you? And so one thing that is under your control is what you're building. So we make sure that the way we build the product and what we build and showcase to customer. is like truly multi X better than what they have been used to. We made it very mouth watering for customers to just try us. I would say like for any startup getting into enterprise, right? The product is the secret sauce and that is what is under your control. So building the product very different, and it's much easier to do in enterprise because most of the larger companies are slow moving. A product is usually like a decade old and they're not flexible. So that is the advantage for a startup to show something to customers that is. Truly futuristic, what they have been dreaming about.
Dan Balcauski:I love that. Well, it's funny because, everyone kind of hinting at the underlying assumption in my previous question is everyone's worried about going to the enterprise because of all these products not mature yet, doesn't have all these capabilities. But yet, once you sort of. Make that decision to go, towards that goal that you realize, yeah, you're, the other competition is not nearly as scary because they're not the, they're the incumbents have been around forever and haven't really faced that hungry Startup mentality. So, well, it's interesting, so it reminds me of something else I heard you talk about on another podcast where you said make your product mouthwatering. I heard you discuss how you know customers are willing to spend money on your technology today if they know, what they're buying and what value they will get. So I'm curious kind of what this experience. of, making that mouthwatering or like has taught you about, communicating, value in your marketing and sales process. Are there ways that you have, learned to do that better over time as the company has grown?
Prabhu Ramachandran:Yes. Again, marketing is a very key part of enterprise SaaS, right? Because longer sales cycle, committee driven, it's not one single person. You cannot impress one person. One person and get into an enterprise. As part of marketing strategically, we have been doing marketing based on the stage until we launched the product. As I mentioned earlier what we are doing is to show to the market, what is the dream land, like what they are doing now, what can be done. We didn't say we are already doing it, but we are just showcasing to customers. What if these are available for customer, what for them, right? And then customers started engaging with you. You make a LinkedIn post, there'll be a lot of comments and start customers started following you. And then you warm up the dream, say for an year or so in one market, say Dubai, and then you go and show the face. Once you had the product and the product matches what kind of dream you have been projecting, right? That's when. You really build a fan base. So you'll have customers, individuals. Within enterprises, we really want you to succeed. So that's how we built that initial set of dozen of customers where we are warming up with these guys, and we started with simple tech, and then pilots. And then when the product came, it met what we have been talking. So that, that's like a marketing plus product. Marketing Matching Product, Product Matching Marketing. That's how we have been executing.
Dan Balcauski:Well, and you hinted at this before cause you, you said, obviously you would have to do buy a very concentrated, specific kind of market. And then, took that success to other places. Have you noticed significant differences in how various markets have responded to the product? Has that affected your go to market
Prabhu Ramachandran:yes, every region behaves very differently, particularly when it comes to real estate, right? How real estate business is done is very different in different regions. For example, If you go to the Middle East, a lot of these companies that are into real estate would be like very big family businesses. They would be in multiple businesses. They will own a lot of car showrooms, they will own factories, they will own actually a couple of hotels, and then a few malls. And that's like one company. But when you go to, say, the US or UK, the market is much more structured. There'll be real estate companies who are focusing only on building office buildings and renting out or selling it. And those buildings, those companies won't own any hospital. So the market is very structured there, whereas in Middle East, the market is differently structured. It's all
Dan Balcauski:More conglomerate sort of model versus very focused.
Prabhu Ramachandran:Yes. Yes. Similar things you can see like in, in some parts of Europe, it's different. So our go to market, which customers to pick has to be different for different regions. For example, when we spent when we moved from Middle East to US, one thing we observed is what we did in Dubai cannot be replicated in. Us within a shorter period of time. Because of the size of the sheer size of the market. It's probably like thousand times Biggers or more than that, bigger than Dubai market when it comes to real estate. Plus it's very structured. So what we did is we picked one vertical, which is retail in us. Retail is you're talking about malls clothing, retail. Food retail and US is all about these change, right? Everything is chain of something.
Dan Balcauski:Unfortunately, you're correct.
Prabhu Ramachandran:Yeah. And so we thought the retail, we picked retail as one vertical and within that we picked like New York initially. And then we started working on it. So more we were able to showcase our product, our strengths to a smaller set of the whole real estate within the US, which is retail, wherein the word of mouth was happening. So that's how we did U. S. We started correcting U. S. But when we went to U. K. We saw more success with office real estate. I don't know the reason, but compared to U. S., we saw better success with office in U. K. and even in Australia. Most of our customers in these regions are immediate customers or office customers. So there is a regional variance, but the product, the way we built the product is, It applies to any set of commercial real estate, but regionally we were having a different strategy on which subcategory we need to pick, what messaging we need to tell in terms of value of the product.
Dan Balcauski:I love the focus. It's very refreshing cause they it's something that I think a lot of folks get spread way too thin trying to chase after everything. I, maybe maybe it sort of worked out that way in, in retrospect. Was this guess. Was the conversation, I guess, in the building and or with your board sort of always this focused or was there, were you all always as the leader sort of fighting pressure to be like, well, yeah, we've got, retail in New York, but why can't we like, let's also go and get the office space in New York and let's just continually try to crack that. Like, talk to us a little bit about, if that was going on.
Prabhu Ramachandran:Yeah, honestly, like we did, Some mistakes and wasted some time in like, when we moved to US we are also picking like few verticals. And that was a time when COVID came in, offices were all closed. And but what we, what happened fortunately is we learned quickly within Within like 8 to 10 months, we, what we observed from the market is, A, the U. S. market is very large. And the way it is structured is very different from, say, Middle East. There are specialist companies building hospitals, chain of hospital, chain of schools. So, it's better to go and pick One vertical, build around it, and then pick, maybe the second pick could be like three more verticals. But first, we need to initial set of customers. So that's when we analyzed and then found out retail is much more lucrative for what we are building in the U. S. market. So the answer is I think we spent, it took us a year to realize.
Dan Balcauski:Well, yeah, I mean, I, some of that is inevitable and I think anyone who tells you otherwise is selling you something. It's just part of the startup journey. If we knew in advance where everything was going to be successful it probably wouldn't be an opportunity. That's great. And, something we haven't talked about in GoToMarket was partnerships have, Have you guys found partnerships key to your go to market at Facilio? And if so, like, how does that come about and how have you cultivated those?
Prabhu Ramachandran:Partnerships have been very helpful, but if you see, we, I wouldn't rely on partnership alone as a go to market engine. It is a chicken and egg problem. So, real partners, like real partners who can bring you deals are like serious companies, doing serious business. And they always go after things. Right. They are very wary about touching a new vendor without a customer base. So it's always chicken and egg. We have been always building partnerships and constantly growing that, but from a core company's GTM point of view, We are very focused on building our own engine. That engine partnership is one piece of it, but how do you build inbound? How do you build outbound? How do we have sales AEs driven lead generation? So what percentage at what stage is better. So we started with the inbound heavy because that is easier. You do content, bring in traffic and all of that. And once we saw an outcome from that, and then we started building the outbound engine. So the answer here is partnership is key. We need to keep it warm, but I wouldn't rely on partnership as a revenue stream, particularly when you're early stage.
Dan Balcauski:mm,
Prabhu Ramachandran:Once we get, say, 30 40 million, then partners come to you. They get very serious. When you're early stage they just play around with you.
Dan Balcauski:I love that. So, so the, yeah, it becomes successful. The partners will show up and tread carefully before then. Prabhu, like there's been so many topics, which I wanted to talk to you about, but we're getting short on time. So I want to get into our final sort of speed round wrap up questions. And maybe need to have you come back for round two at some point. Cause I feel like we only scratched the surface. I want to get a little bit of your Kind of broader perspectives. Look, CEOs founders can get pulled in so many directions. What are kind of personal habits you've cultivated to help you stay on top of your game? And that could be in the realm of intellectual, emotional, physical. What what do you do day to day or month to keep you at the top of your game?
Prabhu Ramachandran:Frankly, like I'm more focused on building Fesslio. So that's the main thing. I get very, I'm very motivated by people around me. I'm more of a people person and even for every founders, my strong recommendation is, particularly when you're early stage, right? It's all about like what kind of team you're building. They have to be, it has to be like I always used to say this sports team analogy, either, uh, any sports team, right? So the team has to work like that. You need very trusted, motivated. Set of people coming together and day in and day out firstly has been like seven years of journey. When I'm, when I become slow, what motivates me is like people around me. Like there are so many people who trusted came in. So that's the excitement that keeps me going.
Dan Balcauski:Awesome. Well, when you think about all the spectacular people you've had a chance to work with, is there anyone that pops to mind that's had a disproportionately positive effect on your journey in the business world?
Prabhu Ramachandran:So yeah, so a couple of folks. One is when we started there is a company named Freshworks, one of the most success story out of India, Chennai Freshworks CEO is my ex colleague and Zoho and friend. And he has been an inspiration and constant support for us as we build. So he's already a scaled company now, public company. So whenever we need help and inspiration, so Girish has been one such person. And as part of a board, we have from Axel's side, we have our investor Shekhar Kirani, where beyond an investor, He has been a coach, mentor for the truly a coach. I'm not just saying this for the sake of it. So he has been like making, keeping us very focused on our toes in a more coach kind of rather than investor kind of engagement. So these two are folks I can share that.
Dan Balcauski:Well, and maybe pick one of them just for time, but I mean, is there one, one of them stands out, has given you a particularly memorable piece of business advice over your relationship?
Prabhu Ramachandran:So one of the fundamentals I mentioned earlier, right? For a startup product is the key. That is your secret sauce. That is something like Girish keeps repeating whenever we go, every two years we go and get do a reflection meeting with him. And he says, you're, what you have is a product. Just keep focusing on building great product and other things will fall in place. Thanks. So that has been like one very simple thing for us, early stage startup founder your secret sauce or what is in your control is the product. And then you build everything around that, either the funding or attracting better people, attracting customers, all of that becomes easier when the product is
Dan Balcauski:Mmm. Well, now I'll give your turn. So, if I gave you a billboard and you could put anything on it for other scale up B to B SaaS CEOs who are trying to scale their businesses, what would you put on that billboard?
Prabhu Ramachandran:The first thing is people before product, right? Fortunately, I call it as like your professional equity that you're building. At my 17 years at Zoho, what I was able to build as a professional equity is people who can trust and come with me. For example, until when we are 35 member team, Facilio, 30 of them were my ex colleagues, people who work with me in Zoho in my team. So, and they're very passionate, very committed towards, they understood the mission and because startups go through difficult, different, difficult phases, right? Whether you are funded or not. So during that the team is very important, like how is the team willing to go through a journey through you is very important. So I would advise. When you start, think about what kind of team, what kind of team is a good fit for the market you're going, whether you're going to sell in India or abroad, mid market, SMB, long because ours is, we know it is going to be like a seven to eight year journey to really crack and get into 10 plus million. And then the growth is going to be faster. So for that, you need people who can. Stay with you, trust you for a longer period of time. So that is very important.
Dan Balcauski:People. Make sure you get your people right. Love it. If our listeners want to connect with you, learn more about Facilio, how can they do that?
Prabhu Ramachandran:Yeah, so we our website is Facilio. com and They can reach out to me in LinkedIn Our Twitter ID is Facilio Inc. So these are their avenues
Dan Balcauski:Well, I will put those links in the show notes for listeners. Everyone that wraps up this episode of SaaS Scaling Secrets. Thank you to Prabhu for sharing his journey insights and valuable tips for our listeners. If you found this conversation as enlightening as I did, remember to subscribe so you don't miss out on future episodes.
