AMA with Krish Subramanian, CEO of Chargebee11 min read

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When you look at Krish Subramanian’s LinkedIn profile, the first words he says about himself are, “I enjoy customer support. That just summarizes why I love SaaS.” He really means it. He was the latest guest on the SaaS Revolution Club Slack community AMA.

Chargebee is a subscription billing solution for online businesses, funded by Accel Partners and Tiger Global Management. Though recurring billing can get complicated with various use-cases, freak one-offs, and other challenges, Chargebee is committed to providing a seamless and flexible experience to its users, the first and vital step to making them successful.

At the AMA he answers questions about maintaining culture, pricing strategies, differentiating the company in the crowded space of billing, growing the marketing, and staying sane through out all this.

Krish will speak at SaaStock about “The New Normals of Customer Experience” Get your ticket now.

Tell us a bit about your product and how your team is set up?

Chargebee specializes in subscription management and recurring billing. We complement Stripe, Braintree, PayPal and other popular gateways by abstracting gateway complexity and help businesses manage subscription complexity, invoicing & automated payments. We are a 106 member team. Chennai is home where we started even though we are a C-Corp Delaware company. 102 are in Chennai and 3 in San Francisco and expanding. 60% is engineering+product+design. 12 member support/success team. Ten member marketing. About ten members inside sales.

How are you finding maintaining company culture within your expanding team in Chennai, and then with a new office in SF – is that a challenge?

Definitely a challenge. We hear a lot about culture and its definitions, but you are still figuring out what exactly are the actionables. The challenge is identifying those aspects that are authentic and make us who we are, rather than a wish list. Thankfully we are four founders, and 2 of us are focused on operations. We try to spend a lot of time doing one-on-ones and listen carefully to feedback to act on it.

We try to get everyone oriented into the organization by starting with customer support. That’s one aspect that’s important in the onboarding process and gives a unique vantage point to customers and helps every new joinee understand product and customers better.

What are the top 3 strategies that have helped you to build a global business from Chennai?

1. Inbound driven marketing. This combined with designing a product that is self-service as much as possible at the right price point for customers we go after is important (rabbit, deer);.

2. A product that has global appeal (obvious) with local availability and integration.

3. Investing heavily in support.

Your website has customers like AB InBev, and you also have freemium for early stage startups. What are some of the key milestones related to product and pricing to get to where you are?

We had started off with a $49 entry level plan, while enterprise was $249. Billing is a critical system and it requires building trust. And that comes with peer validation. It’s a chicken and egg problem. It’s important to build with the customers and build validation. On the other side, perception matters and that affects lead quality. Pricing is an important factor apart from design of the website to attract the right type of prospect we want to work with.

The objections that you hear from some of the prospects, gives a window into what fears/objections they have before choosing you. It helps if you respond blazingly fast as it will make them more likely to give you time on Skype to talk. I used to ask questions to understand and fix things one at a time.

So as an entrepreneur our job is to closely watch these objections, learn from them and design various touch points to take away the objections. Long story short, a $49 starting price doesn’t inspire too much confidence for at-scale companies to trust you with their data. There is no one formula to come up with the right price, but testing price elasticity and understanding lead quality, inquiries, and objections are key throughout.

Naively, at the start, we offered ten free invoices. What we hoped for freemium was that free customers would become paying customers. But it turned out we were attracting customers who only had ten invoices or so – mostly design and dev agencies. Orthogonal expectations. So working through these iterations in pricing to make the product and the pricing look premium was important to attract higher quality leads. It’s an interesting cycle.

What have been some of the biggest challenges facing your growth and how did you solve them?

Identifying channels through which we were getting high-quality customers (read prospects who eventually turn into leads more consistently and also grow with you) was tough. This takes time. For different products, different channels would work. For example: even if we spend money on AdWords, we don’t get higher ROI because of the nature of the product. But AdWords can supplement and assist greatly in lead conversions. We had to understand that based on the nature of our product, organic content works better. That translated in investing in content marketing and generating inbound interest. Those customers who hear about us via word of mouth / try the product after reading a blog are likely to convert into a paying customer. This was a challenge.

How have you differentiated yourself within a fairly competitive space? How did you approach customer experience and how have you been able to scale that as you’ve grown?

On differentiation and customer experience: our biggest competitor is the internal system you might choose to build on top of Stripe/Braintree. Not a like-for-like solution. When we look at it from that perspective, your evaluation criteria and what you look for in our solution becomes completely different. It’s a state of the market that is fast evolving where the customer knows more (Mobile & IOT monetization models and requirements are completely evolving and so is digital media).

We heavily focus on responsive customer support, so we can internalize that we may not have everything perfect, but we will find a solution, so we don’t get in the way of the business. An API first approach to these customers who need faster “solutions” so even if UI is hard, we facilitate ways to manage things via API first.

Keeping customer experience (and in our case developer experience, as they are the primary buy sildenafil usa integrators before they hand it over to business users to manage billing) is a continuous challenge. We look into things like hours in which we get tickets, type of tickets, phone/email/chat tickets and then we plan our team skills for hiring/availability. We even have a MIS for support tickets which has been super helpful for days/hours in which ticket inflow is higher vs. moderate.

What process did you go through to define your own pricing? Your pricing table is split into what looks like five different personas. What type of research did you undertake?

This is the 4th iteration of pricing. In a category that isn’t fully defined (meaning we still compete with internally build systems compared to comparatively mature categories like CRM), we tried to map out the evaluator, buyer, decision maker, influencer and sometimes detractors. This could vary by stage of the company that evaluates us. The developers value features very differently compared to marketeers.

But developers are the first touch point in the implementation of the billing system. However, a VP of Sales may be struggling with revenue leakage with ad hoc pricing and would want controls in discounting process. We tried to map this based on the stage of buyer and price sensitivity. It’s not perfect. But hopefully, we are getting there.

Have you made any disruptive moves to compete against bigger incumbents like Zuora?

We don’t have to kill Zuora to win in this market. We need to provide a compelling product that consistently creates a case against what you would want to do internally. Reality is, even the biggest competitor is catching up in the market, so for us it’s important to be the most nimble product team and listen carefully. I think that’s most important. As a product we win more consistently against Zuora based on some fundamental product differentiation. We are very closely aligned with Stripe and we even amplify the Stripe features. Case in point is, you can use Stripe Radar, Stripe.js, their card updater etc., with Chargebee and by aligning with a solution that’s one of the best we automatically present a better offering.

In a market that’s changing so quickly with players like Stripe, how are you planning to “future proof” your business?  It seems like a DIY solution is getting easier all the time.  Building a barrier around your business must be essential for ChargeBee.

The fast evolution of market itself is the opportunity as well in our perspective.  For Stripe/Braintree, their user is a developer. For Chargebee it is the everyday business user who needs to deal with their customers to delight them. With this lens, it fundamentally changes how we approach the problem internally for us, and we look at Stripe and Braintree and other disruptors in the space as partners with more assuredness. I will be lying if I say we knew this from the beginning. But it got clearer by spending more time with the customers and trying to understand why they rely on us. We work very closely with Stripe to solve some of our customer’s challenges together. So we think the evolution of market is the opportunity. How do I create a compelling case such that you shouldn’t be building all the components on top of the payment gateway yourself? That’s the crux of our problem in my perspective.

And then there is global taxation which has gotten more complex. There are more stringent privacy laws emerging. These are on the compliance side of things for growing businesses. The growing businesses need more support which we can provide on operations support while Stripe and other gateways focus on building the highway for payments.

In the SaaS Revolution podcast, you spoke about how you got your first 100-200 customers through helpful blog posts. You also mentioned here that inbound marketing was a key tool in helping build a global business. How have you structured your marketing team to get to 5,000+?

We used to always ask this question internally. “Who are we writing for and for what purpose.” We could write for branding, PR, lead gen, etc., but we had to discover for ourselves why we do that. It has gone through its iterations. But right now we look at content as a primary lead generation channel – creating awareness for the very top of the funnel and building trust. But focusing on friends of prospects. (not the direct buyer most times).

We have organized the team in 4 pillars. We do have a couple of missing pillars we haven’t invested in. Demand gen focuses on metrics, SEO, and works closely with the content team. Enterprise marketing + inorganic as a channel aligns with demand gen. Many new experiments to create new channels are also driven by this team. Marketing team looks phenomenally better with a great design team. It’s important to create that bandwidth. Customer marketing team plays an important role in bridging product, developers, and customers.

On a more personal note, how do you stay sane as a founder on that crazy journey?

There are times when I get frustrated and can’t’ think of one item to focus on. Those times I chuck everything and just do customer support for a couple of days. I don’t do anything else mostly except reading emails and responding to customers. It’s a beautiful thing that just helps me reset my perspective and reconnects me with why I am doing what I am doing. This is what I enjoy the most – to solve customer problems. Also, the nature of that function is very transactional. You don’t have time to think about tactics etc.; You have a question, you answer that. No tactical decision making necessary. That’s why I love customer support. Then I get back to my happy space again. Playing with my two rowdy boys helps. They don’t care about the problems I deal with.

What is one thing you are most looking forward to at SaaStock?

I am looking forward to hanging out with fellow founders with whom we have built good relationships. Some of us have even planned to have our booths next to each other, so we are going to swap and pitch for each other.

We hold regular AMA sessions and you can be part of the conversation next time. Join the SaaS Revolution Club Slack Community today.

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