Scaling Borders Part 2: Harnessing Insights from HighRadius

A few weeks back we hosted ~200 founders from the Indian startup ecosystem for a fireside chat with Sashi Narahari , CEO of HighRadius, an autonomous finance platform for the office of the CFO. Sashi shares some advice on scaling HighRadius from its bootstrapped origins to the Centaur Club (businesses that reach $100M ARR). We summarize our top learnings from the session:

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1. Forge long term success by bootstrapping: For the first ten years of its existence, HighRadius remained bootstrapped. Sashi sheds light on the rationale behind this unconventional path, citing the precarious average lifespan of tech startups (6.5 years) and the daunting odds (1:10) faced by those embracing the traditional VC model. By creating a capital efficient business model, HighRadius paved its own path to success and longevity.
2. There’s often no prize for second place:?Sashi focuses on the path to becoming a category leader by being mindful of the “Law of Leadership”— the idea that the market leader typically takes 40% share, followed by the number 2 and 3 players that generally each have 20% and 10% share followed by a long tail. HighRadius also added a framework called PMF (Product, Modules and Features) to bring focus within the product team. Product teams are asked to clearly communicate in a 1-pager why the PMF can help HighRadius strengthen their category leadership in order to justify the investment.
3. Focus on a sales-centric approach from 0-$1M ARR:?During the initial stages of growth, Sashi underscores a sales-centric strategy, highlighting the significance of steering clear from an elaborate product development phase. He suggests crafting an initial product which is a 10-slide presentation with product snapshots. Central to this approach is the art of asking the right questions: "if I choose this target customer, will they genuinely choose us?" The guiding principle is to consistently sell and refine the product. Furthermore, he advises that at least one founding team member should act as a sales leader and focus on direct reporting relationships with the sales team. This strategic alignment ensures a focused and cohesive approach to propelling early-stage growth.
4. Value Creation for your Customers:??Sashi describes keeping a maniacal focus on Value creation for clients by your software that is measurable via KPIs as critical. "This will help you establish a highly differentiated product vs competitors and command the #1 spot. This will also create long term product stickiness?and drive higher net and gross retention with existing clients. Otherwise the tech industry?goes through?boom and bust periods and you see software?companies that are vaporware created in boom times and get wiped out during bust periods. Kind of happening now as we speak."
5. Time partnerships right:?There are typically three partnership models: OEM, co-sell model and referral. Sashi recommends early founders (<$30M in revenues) place limited focus on co-sell/partnerships because it can be hard for large intermediaries to feel comfortable partnering with smaller businesses. While it’s important to become a line item with someone who has a seat at the table with your prospect customer it’s hard until you reach a certain stage and market maturity.
6. Focus on unit economics: Sashi talks about how obsession with unit economics is ingrained in the High Radius culture. For instance, he has never approved a marketing budget unless it is tied to committed metrics around a target number of leads and the cost per lead. Being frugal, not cheap is also one of the core HighRadius principles.
7. Build a culture that scales: With a workforce of 4000 employees, a staggering 20x growth in just six years, Sashi opens up about the challenges of preserving culture. He emphasizes the unapologetic commitment to their cultural values, a 30-day onboarding for leaders, and an 'exit early' philosophy to maintain alignment.
8. Be open to M&A at the right time:?HighRadius’ growth so far has been organic and they’ve avoided the complexities that come with M&A. However, to continue their growth trajectory and mitigate risk they’re actively looking for potential targets in geographies and industries they currently don’t serve in.

Credits: Sashi Narahari , CEO HighRadius

Team Susquehanna: Aneesha Raghunathan Shree Vardhan Saraf