Exclusive | Companies that aren’t tech-centric will be wiped out, says chief of SoftBank-backed Mindtickle

Nishant Mungali, Krishna Depura and Deepak Diwakar, co-founders of Mindtickle

There are a lot of gaming companies and a lot of enterprise software companies. But there aren’t too many enterprise software companies whose origins lie in gaming. But that’s what Krishna Depura, Mohit Garg, Deepak Diwakar and Nishant Mungali wanted to do in 2011. They wanted to ‘tickle’ the minds of companies with fun activities- make a game out of boring tasks like employee onboarding.

A lot has changed in nearly a decade. Mindtickle has too. Today, it is a leading sales readiness tool, managing the sales process for billion-dollar companies from end to end. Last month, the Pune and San Francisco-based firm raised $100 million from investment giant SoftBank, doubling its valuation to $500 million in a year. It has a revenue run rate of $20-25 million, sources say. The deal also marked SoftBank’s first India-based software-as-a-service (SaaS) bet. In an interview with Moneycontrol over Zoom, CEO Krishna Depura delved into the company’s unusual origins, overseas expansion, the importance of company culture and why the Covid-19 pandemic may have been the best thing to happen to Mindtickle.

Edited excerpts:

Q. Let's start at the beginning. How and why did you start Mindtickle?
We were just four typical Indian engineers who came together to do something interesting. We wanted to experiment, do something fun, but also something meaningful. This was when social media and games like Zynga (owns Farmville) were just taking off. Even senior people were hooked on it. We thought online and social are very powerful but were not sure whether Farmville etc would last. We started these treasure hunts and wanted to make learning fun. Instead of physical, these were virtual treasure hunts for companies where you learn something. And everybody loved it. We wanted to be at the intersection of fun and learning, hence Mindtickle.

The edtech boom we are seeing today, this was an early version of that. 

Potential investors in fact said we should teach kids via this gamification, and that’s a big market. But then I wasn’t sure whether just gamifying education, rather than the education itself being solid, is enough.  So we thought maybe we can make some impact in the corporate space, and not schools. I also think the school space is pristine and you better know it well, because you’re playing with the future of kids.

Q. What then?
So we started seeing where we can use fun, learning and gamification in enterprises. And this was counterintuitive because remember, enterprises are typically very serious, sombre places.

We went to Yahoo, InMobi, which were experimentative, and they loved our idea. They started doing new employee onboarding using Mindtickle. So when people join a company, instead of sitting in a room and going through a boring presentation, they would get a login for a treasure hunt about the company. It worked out very well and we were able to get a lot of clients in India and abroad. Gamification became a buzzword in 2013 and we were globally recognised as a company using gamification very well. But I realised we still aren’t creating great impact. We were not able to go to the CEO or CRO and tell them we are a must-have. We weren’t too critical. 

Separately, we also saw that the world is shifting from a seller economy to a buyer economy.  If you want to buy a car, there’s not just a new model, there are new car brands coming up. There was a new phone brand every few months. Earlier selling was a transaction. Now buyers were having many more options. So every company’s challenge was how do they deliver better value to a customer, and stay competitive?

Therefore, how do you keep salespeople updated, keep them ready and aware? So we rebuilt the platform to focus it around how to make a great onboarding experience for sales reps. But at this point, India was all about B2C (business to consumer). No one really looked or spoke about B2B (business to business) or enterprises. So we went to the Valley, first to hire people, and get some clients. Then in 2015, we decided to become a US-centric company.

Q. The US is a huge market. Whom did you decide to target?
What we are doing should be important to the fastgrowing companies. So we targeted the fastest-growing companies then- AppDynamics, Nutanix, Cloudera- targeting the top 100. And within six months we were able to get 20 of these on our platform. 

We tasted blood there and knew we had found a product-market fit. Everyone on Sand Hill Road (where Silicon Valley’s most influential investors are based) was talking about us. 

Mainly two parts were broken. One, there was no single platform to serve all sales leaders. Because leaders need to onboard people, launch new products, do sales kickoff, ensure people are on messaging, coach salespeople- and all the solutions were manual or distributed. So we started building on this sales-readiness category

We started with mid-market tech companies, then enterprise companies, and then the Fortune 100.

Q. Give me some examples of how you would help a company?
Say you’re a security company, you’ve got a good product. So now you want to grow in all 48 states (in the US) and you talk to the risk officers at companies. So our onboarding, quick update and product training features will educate these potential clients about your features- what you do, why are you different, how does the product work. You can also track which people are engaged with this product, how much time are they spending on it.

Sales executives can do role-plays on our platform, how will they handle an objection on our platform, how will you answer this question- rather than directly going to a customer. And sitting in my house in Pune I can certify my sales reps on the knowledge and the skill to sell.

We are also collecting data across the board- how much time is spent on one topic, what is the feedback, what questions are asked routinely...and can decide sales capability based on that. If you launch a new product, salespeople can sell that only once they are certified.

Q. How has your customer base changed over the years?
So we started with mid-market firms - companies with 200-1,000 people, and now we sell even to companies with 100,000 people. So today the base is a lot more enterprise. For example, the top 5 pharma companies, the top 3 insurance companies, are all our clients. We are sector agnostic but we have a larger footprint in technology, pharma and insurance. 

Q. And country wise, what is your revenue breakup?
A majority is from the US - over 80 percent - followed by Europe. India is 5-10 percent of our revenue. We have seen a surge in India in the last 2-3 years because technology is becoming more common. Pharma companies have bought iPads, and Jio has provided the internet everywhere. A very positive trend for us is also that a lot of non-tech companies in India are also using Mindtickle. Automobiles for example. In India, once companies see something works and help them be efficient, they will jump to it. 

Q. And isn’t it interesting that Indian companies and even startups are willing to pay new companies for these solutions- a somewhat new trend?
Oh absolutely. Initially, we thought India is a country of software professionals, so people would automatically understand. But even for a large company, the moment we would say the budget for this has to be more than Rs 20-30 lakh, the CEO would say “I will get a developer and do this in-house.”  But now people are realising this is specialised software, and that their job is not to build software, it is FMCG (fastmoving consumer goods) or to build stores. 

They have also seen that if you’re not tech-centric you will be wiped out. E-commerce enabled firms have flourished. There is a strong awareness that you have to embrace technology, and therefore you have to pay for that technology. Because the tech pays back over a long period of time. 

Q. When you onboard a client in a sector you haven’t worked on before, how do you approach it?
It is about getting domain expertise. For example, we’re working with a large auto company now. You have to understand the nuances- what are the business use cases, what are their challenges. The platform- the Lego blocks remain the same- learning, training, coaching. But what kind of programs and outcomes are needed will change. In pharma, for example, market share is more important than absolute numbers. You want to have a voice in the industry and always be in front of doctors. 

We bring in cross-functional learnings. Some of these pharma and FMCG companies have cracked their sales process 20 years back, and it is quite rigorous. They’ve always had large distribution chains. But now they need to be codified, digitised. There is a lot of learning for us in the process they have built. 

Q. What has the pandemic been like? What were you looking like in March and how has it been since?
Oh yes, a black swan event like we have never seen. Our India offices, we have been a bit office-centric, so that had to change. But in the US we have been quite distributed so that was a blessing in disguise. The first thing we wondered was will we all have the same morale working from home, and how do we maintain company culture. We are very strong in culture. We have been rated as the second-best company to work for. Thankfully it has worked out well.

Secondly, a lot of people said the market will crash, you will have no sales, you will have to lay off people, preserve every single dollar. So everyone was extremely conservative. But our thought process was that these times come and go, and we put a good plan in place. We gave salary raises, bonuses, and not a single person was laid off. These are the times you really have to be with the team. 

Q. In April-May did you see clients renegotiate contracts, sales cycles get extended?
Interestingly, we saw our usage pick up. Because now people couldn’t do their sales kickoff anymore in person. You cannot onboard people by flying them into your headquarters. Remote communication was more important than ever. So traditional non-tech sectors actually became much more favourable to us. We have got multi-year renewals from some of these companies because they have realised that the pandemic will come and go but technology is part of our lives. 

Q. But didn’t you have clients- whose revenue has come to zero- say we can't pay you right now, or we have more pressing expenses?
Well, most of our clients are in tech, and tech gained big-time from the pandemic. As did pharma. The sectors that were really hit- travel or luxury, we didn’t have much exposure to those sectors anyway. Impact-wise insurance and finance were also okay. In the second quarter (April-June), deals did take longer to close. People were holding on to their purse strings and everyone was a bit frozen and just reacting to what was happening around them.

But in the last few months, with good news about the vaccine coming in, and things normalising a bit, companies are opening up budgets again. Overall, SaaS has benefitted from this, because people don’t want to put in capex (capital expenditure) anymore, we are op-ex (operating expenses). We are also happy that our culture sustained, and that we invested in the mental health of our people. We still celebrated everything- Founder’s Day, Diwali, Thanksgiving…

Q. How did you invest in mental health?
We had a lot of virtual events- half-hour jamming sessions, we got some counsellors to talk about mental health, especially during the pandemic, we created interest groups, had virtual game zones, and basically tried to still build a community. We did a virtual play where everyone recorded their own parts and then stitched it together.

Q. Why did you raise money right now, and from SoftBank?We saw a lot of good traction, and in new sectors, as I said earlier. We are seeing a domino effect. There is enough product-market fit and validation. So we have to scale. Readiness is a much bigger category today. For example, we’re working on conversational intelligence- something that was not looked at earlier. We have to invest a lot in R&D (research and development). 

In the venture industry, there is always the right time. Valuation multiples are healthy for founders right now, and I think SaaS companies are on the right part. We are playing in a $40 billion Target Addressable Market (TAM), so if you execute well, there’s a very good chance of building a multibillion-dollar company. SoftBank was also looking to invest in SaaS so it is a good time. SoftBank is great for us because they are willing to take risks. If there is an opportunity to double down, they will not shy away. 

While we are very US-centric today, now we can expand more aggressively in Europe, Southeast Asia, and with SoftBank’s help, even Japan.

Q. Did you consider getting a more experienced SaaS investor on board, given SoftBank India is new to the space?
You want a combination of experience and scale on your board. Our investors like Accel, Norwest bring in enough SaaS experience. But SoftBank is willing to do a billion-dollar investment if there is an opportunity. Given the opportunity we have in front of us, we wanted scale. We don't want any challenges because of lack of capital. They make you think big. 

Q. Do you see the US pie reducing in your overall pie in the next 2-3 years?
Yes, because Europe is a big market, so the US will come down from 80 percent, where it is today. Southeast Asia is an emerging but promising market.

Q. Do you see your space as competitive? There are a Brainshark and Saleshood vying for the same type of customers- and sales enablement is a big industry today?You’re right, sales enablement is huge, but while it looks like one massive industry from outside, companies are doing many different things individually, and not all of it goes into one another’s territory. Some people are doing sales content, some are doing conversational intelligence; deal intelligence and forecasting. We have competitors but none of them is very big. There is an opportunity to grab a large market share. Right now there are enough areas to go into, without someone else eating into your share. Eventually, I think there will be a couple of billion-dollar companies, who will then merge. Consolidation will eventually happen.