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Amol Ghemud Published: February 23, 2026
Summary
Freshworks built a $1.5 billion CRM and customer support platform by targeting SMBs underserved by Salesforce and Zendesk. Their GTM strategy combined product-led growth with a light sales team, disrupted pricing that cost 70% less than competitors’, and a multi-product suite that deepened customer relationships. Founded in Chennai, they proved that best-in-class enterprise software could be built outside Silicon Valley.
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How an SMB-First, Product-Led GTM Strategy Turned a Chennai Startup into a $10B SaaS Company on NASDAQ
How Did Freshworks Start?
Freshworks was founded in 2010 by Girish Mathrubootham and Shan Krishnasamy in Chennai, India. The company started by building Freshdesk, a cloud-based customer support platform that solved a specific problem: small and medium businesses needed professional helpdesk software but couldn’t afford Zendesk or Salesforce. The founding team had worked at other SaaS companies and saw a massive gap in the market between expensive enterprise solutions and non-existent SMB options.
Unlike many startups that chase enterprise customers immediately, Freshworks made a deliberate choice to start at the SMB segment. This decision shaped their entire product development, pricing, and go-to-market strategy for the next decade. They chose to serve the underserved, not the oversaturated enterprise market.
What GTM Problem Did Freshworks Solve?
Before Freshworks, small businesses had two terrible choices: spend $50,000+ per year on Salesforce or Zendesk, or use nothing at all. The problem wasn’t lack of demand. It was that enterprise GTM made SMBs economically invisible. Freshdesk proved that SMBs would pay for professional software if the price was reasonable and the setup was fast.
The second problem was complexity. Salesforce and Zendesk required implementation consultants, training, and months of deployment. Freshworks solved this by building a cloud-first product that could be set up in minutes, without consultants or training. Small businesses could sign up, start using the software in their first hour, and upgrade features as they grew.
What Were Freshworks’ 5 Core GTM Moves?
1. SMB-First Positioning Against Enterprise Incumbents
Freshworks’ primary GTM decision was to position themselves directly against Zendesk and Salesforce, but with a specific angle: we are built for SMBs, not enterprises. This wasn’t a weakness positioning strategy. It was a strength positioning that said “for teams under 100 people, we are better.” Their messaging avoided trying to convince Fortune 500 companies and focused on fast-growing startups and small teams.
This meant their product roadmap, pricing, and marketing all aligned to SMBs. They didn’t build features for complex multi-company scenarios because their customers didn’t need them. They didn’t require annual contracts because SMBs wanted flexibility. Every GTM decision reinforced the SMB positioning.
2. Product-Led Growth with Light Sales Assist
Freshworks combined product-led growth with a small sales team, which was unusual at the time. Free trial users could experience the full product immediately without talking to a sales representative. This meant activation was measured in hours, not months. Users could see value before ever committing to a paid plan.
Their sales team was positioned to help customers upgrade from Starter to Growth to Scale plans, not to close enterprise deals. This allowed Freshworks to scale their SMB customer base without a massive sales organization. A 20-person sales team could support thousands of customers upgrading themselves because the product created the upgrade motivation.
3. Aggressive Pricing Disruption
Freshworks’ pricing was a direct attack on Zendesk. While Zendesk charged $49 to $99 per agent per month, Freshworks charged $29 to $59. This 40 to 50 percent price advantage made Freshworks economically irresistible for SMBs. Businesses could support larger teams for the same budget they allocated to one or two Zendesk agents.
Price became a GTM advantage because it made ROI calculations simple. A startup supporting 500 customers could switch from Zendesk and recapture 50 to 60 percent of their support software spend within 90 days. This price transparency removed objection handling from the sales process entirely.
4. Multi-Product Suite Strategy
After proving Freshdesk worked, Freshworks expanded with Freshsales (CRM), Freshdeskfor Sales (sales engagement), and Freshservice (IT service management). This multi-product strategy deepened customer relationships and created multiple revenue streams from each account. A startup using Freshdesk for support might add Freshsales for their sales team three months later.
The multi-product strategy also created competitive differentiation. Salesforce customers could get CRM, service management, and sales engagement only by subscribing to multiple products at enterprise pricing. Freshworks customers could get the same combination at SMB pricing. This bundled value proposition became extremely powerful in GTM conversations.
5. India-to-US Expansion Without Losing Engineering Leverage
Freshworks maintained engineering teams in both Chennai and the United States. This allowed them to scale product development globally without losing their cost efficiency advantage. They could build products at the quality level competitors required while maintaining pricing that undercut competitors by 40 to 50 percent.
This India-to-US expansion also provided a counter-narrative in their GTM story. Freshworks could say “we build enterprise-grade software from India, which is why we can price it 40 to 50 percent lower.” This explained their pricing power and created a compelling founder story that resonated with startups and SMBs.
Why Did This GTM Strategy Work So Well?
Freshworks’ GTM strategy worked because it solved a real pain point at massive scale. There were millions of SMBs globally that needed customer support and CRM software but couldn’t afford enterprise solutions. By positioning themselves as the product built specifically for this segment, Freshworks became the default choice for thousands of startups.
The combination of product-led growth and pricing disruption created a growth velocity that enterprise sales could never match. Free trials meant new customers could sign up and get to value in hours. Pricing 40 to 50 percent below competitors meant budget conversations became ROI conversations instead of objection handling.
The multi-product strategy worked because SMBs are pragmatic. They don’t want vendor relationships with 20 different companies. They want one trusted vendor that solves multiple problems at reasonable prices. Freshworks provided this, which created network effects as satisfied customers expanded usage across products.
What Can You Steal From Freshworks’ GTM?
Own a specific segment instead of trying to compete everywhere. Freshworks’ strength came from saying “we are the best for SMBs under 100 people.” This clarity allowed them to make consistent product and pricing decisions. Trying to serve SMBs and enterprises would have diluted their strategy.
Use pricing as a GTM weapon, not a financial lever. Freshworks didn’t lower prices to increase volume. They lowered prices to signal “we built this for you” and to create ROI that eliminated objection handling. Pricing strategy is marketing strategy when done right.
Combine product-led growth with light sales assist. Not all SaaS needs enterprise sales teams. For products with clear value propositions and simple pricing, product-led growth with a small sales team scales faster than traditional enterprise sales.
Build a multi-product suite that deepens relationships. Freshworks expanded their TAM by offering products across the customer business. Each new product opened a new reason to talk to customers and create expansion revenue that compounds over time.
Don’t underestimate international talent and cost efficiency. Freshworks built a billion-dollar company from India, which gave them structural cost advantages their Silicon Valley competitors couldn’t match. This translated to better pricing and higher margins.
Create network effects through ecosystem partnerships. Freshworks’ extensive marketplace of integrations became a moat that made switching costs higher for customers. Users built workflows that integrated Freshworks with dozens of other tools.
What Metrics Prove Freshworks’ GTM Success?
Freshworks grew to $200+ million ARR with over 500,000 customers by the time of their 2021 IPO. Their customer acquisition cost was around $500 to $800, with a lifetime value of $20,000 to $30,000 for SMB customers. This 25x to 60x LTV to CAC ratio is among the best in enterprise SaaS.
Key metrics included a 95 percent net dollar retention rate, which meant existing customers expanded spending annually by 5 percent through multi-product adoption and team growth. Their free trial conversion rate to paid was 10 to 15 percent, which is exceptional given the lack of sales team involvement.
Their NASDAQ IPO in October 2021 valued Freshworks at over $10 billion. By 2024, the company had expanded to over 750,000 customers and $300+ million ARR. These metrics prove that SMB-first, product-led GTM can scale to billion-dollar companies.
What Common GTM Mistakes Did Freshworks Avoid?
Mistake 1: Trying to compete with Salesforce and Zendesk at their game. Freshworks didn’t try to build a 500-person sales team or sell to Fortune 500 companies. They knew they couldn’t compete on those dimensions. Instead, they competed on speed, simplicity, and price for SMBs. This vertical focus allowed them to win when they could have lost by spreading themselves thin.
Mistake 2: Raising prices as they scaled. Many successful SaaS companies raise prices after product-market fit, assuming their competitive moat justifies premium pricing. Freshworks maintained aggressive pricing throughout their growth, which kept them as the default choice for SMBs and protected them from competition.
Mistake 3: Expanding internationally too early. Freshworks stayed focused on English-speaking SMBs in North America and Europe for years before expanding. This patience allowed them to build strong unit economics and product-market fit before taking on the complexity of international expansion.
Mistake 4: Building a massive sales team early. Many enterprise SaaS companies hire large sales teams in years two and three. Freshworks kept sales lightweight, allowing product-led growth to do most of the work. This meant a smaller payroll and higher margins as they scaled.
Key Takeaways From Freshworks’ GTM
Freshworks proves that you don’t need to be in Silicon Valley, compete with incumbents on their terms, or build a massive sales organization to build a billion-dollar company. By choosing a specific customer segment, building better products for that segment, and pricing aggressively, Freshworks achieved rapid growth with sustainable unit economics.
Their multi-product strategy demonstrates that expansion revenue compounds when customers trust your brand. The best GTM strategies create situations where your next sales conversation doesn’t happen with a stranger, but with a customer who already loves your product and is ready to buy more.
For your own GTM, the lessons are clear: choose a segment you can own, build better products for that segment than anyone else, price to win rather than maximize, and combine product-led growth with light sales assist. This combination creates growth that scales without requiring exponential team expansion.
Ready to create your own category and build premium positioning?
1. How does Freshworks compete with Salesforce and Zendesk?
Freshworks competes with pricing, simplicity, and speed. Salesforce and Zendesk focus on large enterprises with complex needs. Freshworks focuses on SMBs that want to get started in hours, not months, and pay 40 to 50 percent less. This vertical focus means Freshworks wins in their segment because they’re purpose-built for SMB needs.
2. What is Freshworks’ customer acquisition cost and how do they keep it low?
Freshworks’ CAC is $500 to $800 per customer because product-led growth means minimal sales involvement. Customers sign up for free trials, experience value in hours, and upgrade themselves without talking to sales. This creates CAC that’s 3x to 5x lower than competitors that require enterprise sales teams.
3. How does multi-product adoption work in Freshworks’ GTM?
A customer using Freshdesk for support is already in the Freshworks ecosystem. When they need CRM or IT service management, Freshworks is the obvious choice because of pricing, integration simplicity, and user familiarity. This creates expansion revenue that compounds over time and increases customer lifetime value significantly.
4. What was the role of India in Freshworks’ GTM advantage?
India provided Freshworks with engineering cost efficiency that allowed them to undercut competitors on pricing while maintaining higher margins. They could charge 40 to 50 percent less than competitors and still build a profitable, scalable business. This cost advantage became part of their GTM story and competitive moat.
5. How did Freshworks avoid competing directly with Salesforce?
Freshworks explicitly positioned themselves as SMB-first and Salesforce-alternative rather than Salesforce-replacement. They didn’t try to win enterprise deals or build a massive sales organization. They claimed the SMB segment where they could build products specifically for those customers’ needs without compromising on price.
6. What was Freshworks’ go-to-market strategy for their IPO?
Freshworks went public in October 2021 when they reached $100+ million ARR with strong margins and unit economics. Their public market story was about profitability and sustainable growth, not growth at all costs. This resonated with investors looking for disciplined SaaS companies that could scale without burning cash.
For Curious Minds
Freshworks built its entire GTM plan on a powerful counter-positioning insight: the SMB market was not a smaller version of the enterprise market, but a fundamentally different one. They chose to be the best solution for small teams, turning a perceived limitation into a significant competitive strength against incumbents like Zendesk. This deliberate focus on the underserved created a clear and defensible path to market leadership.
To execute this, you should understand their core principles:
Targeted Messaging: All marketing communication was aimed at fast-growing startups and small teams, explicitly stating they were built for teams under 100 people, not Fortune 500 companies.
Aligned Product Roadmap: They avoided building complex enterprise features, focusing instead on the tools SMBs needed for immediate value.
Flexible Commercials: Unlike the rigid annual contracts from Salesforce, they offered pricing that aligned with an SMB's need for agility.
This disciplined approach ensures your product and GTM are perfectly synchronized with your target customer's reality, preventing wasted resources. Discover how this focus translated into their pricing and sales model by reading the full analysis.
This model means the product itself is the primary driver of customer acquisition, activation, and conversion, with a sales team intervening only at key moments to help users upgrade. Freshworks perfected this by allowing users to experience the full product via a free trial without ever speaking to a sales representative. This self-service motion reduced customer acquisition cost and dramatically shortened the sales cycle.
A sales team of just 20 people could support thousands of customers because their role was strategic, not transactional. You can replicate this by:
Designing a product that delivers value within the first hour of use.
Using product usage data to identify customers who are ready to upgrade.
Positioning your sales team as consultants who help users unlock more value from paid plans, rather than as traditional closers.
This capital-efficient model allows you to scale revenue without scaling sales headcount linearly. The full article details how this structure supported their disruptive pricing.
The contrast was a core part of Freshworks' value proposition, making the choice for an SMB clear and simple. While Salesforce and Zendesk required implementation consultants and months of deployment, Freshworks offered activation in minutes. This shift from a long, expensive sales process to immediate, product-led value was their key differentiator.
For an SMB, the comparison was stark:
Time to Value: Freshworks delivered value in the first hour, whereas enterprise solutions often took a full quarter to deploy and train users on.
Total Cost of Ownership: Freshworks eliminated the need for expensive consultants and training, reducing the total cost well beyond the 40 to 50 percent price advantage on the software itself.
Autonomy: Small businesses could sign up, configure, and start using the software entirely on their own, giving them control over the process.
By solving for speed and simplicity, you remove the primary barriers that make enterprise software inaccessible to smaller companies. See how this approach was paired with aggressive pricing to create an irresistible offer.
Price was not just a feature for Freshworks; it was a weapon for market disruption that made their value proposition undeniable for SMBs. By offering plans from $29 to $59 per agent compared to Zendesk's $49 to $99, they made the financial benefit of switching immediately obvious. This price transparency removed objection handling from the sales process and made ROI calculations simple.
You can use price as a GTM advantage by ensuring it is:
Clear and Simple: Avoid complex tiers and hidden fees that create uncertainty for buyers.
Directly Comparable: Position your pricing directly against a market leader to highlight the savings.
Value-Driven: Connect the lower price to a faster, simpler product experience, reinforcing the idea that you are not just cheaper, but better for their specific needs.
A startup that could recapture over half of its support software spend within 90 days had little reason not to switch. Explore the complete story to learn how this pricing was sustained by a capital-efficient business model.
The multi-product suite strategy was a natural extension of Freshworks' core GTM philosophy of serving the SMB. After proving the model with Freshdesk, they methodically built or acquired new products to solve adjacent problems for the same customer base. This approach transformed them from a point solution into an essential business software platform for small companies.
This strategy created a powerful growth loop:
It lowered the cost of customer acquisition for new products, as they could cross-sell to their existing base.
It increased switching costs, making it harder for customers to leave the Freshworks ecosystem once they adopted multiple tools.
It expanded their market from customer support to sales, marketing, and IT, dramatically increasing their growth ceiling.
By solving more problems for the same customer, you can build a more defensible business and increase revenue per account. The full article explains how this strategy was critical to their journey to a $10B valuation.
To replicate Freshworks' success, you must begin with disciplined focus on the underserved SMB segment, not by trying to be a cheaper version of an enterprise tool. The entire strategy hinges on being authentically better for a specific, overlooked audience. Your product, pricing, and messaging must all align with the unique needs of a small business.
Here is a stepwise plan to get started:
Identify an Inaccessible Incumbent: Find a market leader like Salesforce or Zendesk whose product is too expensive and complex for teams under 100.
Build for Simplicity: Develop a cloud-first product that solves a core problem and can be set up in minutes, not months, without consultants.
Implement a Self-Service Funnel: Create a free trial or freemium model that allows users to experience product value immediately.
Price for Disruption: Set your price points 40 to 50 percent below the incumbent to make the switching decision economically irresistible.
This GTM motion requires deep empathy for the SMB buyer. Understand how Freshworks' Chennai roots gave them a unique advantage in executing this plan by reading the complete story.
Enterprise software made SMBs economically and operationally invisible by creating two significant problems that Freshworks directly solved. The first was prohibitive cost, with solutions from Salesforce often exceeding $50,000 per year. The second was overwhelming complexity, requiring consultants and months of deployment. Freshworks proved SMBs would happily pay for professional software if it was affordable and simple.
Their model offered a clear solution to each problem:
Economic Invisibility: Freshworks' disruptive pricing made professional-grade software accessible, turning a massive, underserved market into a viable customer base.
Operational Complexity: By creating a product that could be used in the first hour without any training, they eliminated the need for costly implementation partners.
Lack of Flexibility: Their monthly plans and easy upgrades matched the agile nature of SMBs, contrasting with the rigid annual contracts of enterprise vendors.
Your GTM strategy should focus on removing the exact friction points that prevent a target market from adopting existing solutions. Discover the five core GTM moves Freshworks made to address these issues in the full article.
Freshworks' success has created a powerful and repeatable playbook for building a global SaaS leader from anywhere in the world by focusing on underserved markets. Their journey demonstrated that you do not need to start in Silicon Valley or target the Fortune 500 to achieve a massive outcome. They proved that an SMB-first, product-led GTM model can be both highly scalable and capital-efficient.
The key implications for today's founders are:
Geographic Advantage: Building a company in a location like Chennai can be a structural advantage for capital efficiency.
The Power of Focus: Targeting SMBs is not a compromise but a winning strategy when executed with a product and GTM model tailored to their needs.
PLG as a Global Scaler: A product-led growth motion allows companies to acquire customers globally from day one without a large international sales footprint.
Their story continues to inspire founders to look for opportunities in markets ignored by incumbents like Zendesk. Explore the full breakdown to understand how these strategic choices led to their historic IPO.
This decision was the strategic anchor for the entire company, ensuring perfect alignment between who they sold to and what they built. Instead of chasing enterprise features, Freshworks focused its resources on what SMBs valued most: speed, simplicity, and affordability. This focus prevented the product from becoming bloated and complex like those of its competitors.
This SMB-first philosophy shaped key areas:
Product Roadmap: They prioritized features that solved immediate problems for small teams, ignoring complex multi-company scenarios requested by large enterprises.
User Experience: The entire product was designed for self-service setup and intuitive use, eliminating the need for paid training.
Contracting: They avoided the enterprise standard of requiring annual contracts, offering the monthly flexibility that SMBs need to manage cash flow.
By committing fully to one segment, you create a product and GTM that is vastly superior for that audience. Learn how this disciplined approach created a competitive moat in the complete analysis.
This structure was a masterclass in capital-efficient scaling and a core component of their product-led GTM. The sales team at Freshworks was not a traditional acquisition engine; it was a value-realization engine for customers already using the product. Their goal was to facilitate upgrades from Starter to Growth plans, a motion driven by the product's own success.
This 'sales-assist' model worked because:
The Product Qualified the Leads: The product itself identified users who were hitting usage limits or needed advanced features, creating warm opportunities for the sales team.
Sales as Consultation: The team's conversations were about helping customers solve new problems with premium features, not about convincing them of the basic value proposition.
Efficiency at Scale: A small team could manage a huge customer base because most of the 'selling' was automated through the product experience.
This approach lets you scale revenue efficiently without the high costs of an enterprise sales force. Dive deeper into how this model complemented their disruptive pricing in the full article.
Many startups fail by treating the SMB market as 'enterprise-lite,' applying a GTM motion that is too slow, expensive, and complex for small businesses. The most common mistake is building a heavy, top-down sales process to sell a product that SMBs expect to try and buy on their own. Freshworks avoided this by aligning their GTM with the fundamental behaviors of an SMB buyer.
They sidestepped critical errors by:
Rejecting a Heavy Sales Model: They opted for a product-led approach instead of hiring expensive account executives to chase small deals, which would have destroyed their unit economics.
Avoiding Product Bloat: They resisted the temptation to add enterprise features, which would have increased complexity and alienated their core SMB users.
Offering Flexible Pricing: They did not force SMBs into rigid annual contracts, a common enterprise practice that clashes with the cash flow needs of small companies.
A successful SMB strategy requires a purpose-built GTM from day one. Uncover the five core moves Freshworks made to ensure their strategy was perfectly matched to their market.
This immediate time-to-value was a profound competitive advantage that completely reshaped the buying experience for helpdesk software. A typical enterprise cycle with a company like Salesforce involves demos, negotiations, and a multi-month implementation before any value is realized. Freshworks collapsed this entire process into a single hour. This transformed the purchase from a high-risk committee decision into a low-risk individual choice.
This experiential difference gave them a distinct edge:
It created viral, word-of-mouth growth as happy users could recommend a product they were already using successfully.
It shortened the sales cycle from months to minutes, dramatically improving sales velocity and capital efficiency.
It put the user in control, building trust and demonstrating the product's simplicity and power before asking for a credit card.
When your product itself is your best salesperson, you create a GTM motion that is incredibly difficult for legacy competitors to replicate. The full article explores how this PLG foundation enabled their entire disruptive strategy.
Amol has helped catalyse business growth with his strategic & data-driven methodologies. With a decade of experience in the field of marketing, he has donned multiple hats, from channel optimization, data analytics and creative brand positioning to growth engineering and sales.
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