"We Want To Double Click On Innovation, Investing In New And Current Products," Shares Whatfix's Vara Kumar

Vara Kumar, Co-founder of Whatfix, recounts the entrepreneurial journey that began in 2010 with Khadim Batti with a focus on small and medium-sised businesses (SMBs) in the marketing space. "Our entrepreneurial journey began with a focus on small and medium-sised businesses, but we quickly learned the importance of pivoting to address customer retention challenges." Initial challenges in retaining customers led to a pivot in 2013 towards Whatfix, which emerged from recognising the need for more effective user guidance through complex software. "Whatfix emerged from the realisation that users needed more effective guidance through complex software, moving beyond traditional video tutorials to deliver in-app experiences."

As the DAP (Digital Adoption Platform) sector has evolved, Kumar notes that new categories typically start with a few innovators before gaining broader acceptance. "Creating a new category in the tech landscape requires not just innovation but also educating both users and analysts, which can be both challenging and rewarding." He explains that before the emergence of DAPs, companies relied on in-person training or video instructions to manage software changes, which was often inefficient. Whatfix's approach revolutionised this by integrating guidance directly into users' workflows, thus enhancing adoption rates.

Leveraging AI and Product Innovation

Kumar shares how Whatfix is adapting to technological advancements, particularly the integration of AI. "As technology evolves, each shift—like the transition to AI—demands increased user support, and Whatfix is committed to integrating guidance directly into users’ workflows." Whatfix currently offers three key product lines: a digital adoption platform for technology adaptation, product analytics for understanding user behavior, and application simulation for practice before live usage. These innovations are designed to prepare users for transitions in technology.

Kumar explains that as Whatfix grows, the company is focusing on becoming a multi-product business. This strategy aims to solve larger problems for enterprise clients by either enhancing existing products or developing new, complementary ones. The goal is to create more value for customers while driving faster growth as they tap into broader markets.

International Expansion and Market Dynamics 

Addressing the international expansion of Whatfix, Kumar clarifies that the company has always had a global focus, with a significant portion of its revenue originating outside India. "From our early days, we recognised the value of targeting international markets, with 30 per cent of our first ten customers coming from outside India. Today, nearly 98 per cent of our revenue is international." 

Although there are varying degrees of technological adoption across regions, Kumar refutes the notion that India is lagging in the DAP sector. He cites advancements in fintech as an example where India excels. However, he acknowledges that different market conditions influence technology adoption rates, particularly regarding labour costs and operational efficiency.

Company Strategy and Growth 

The discussion transitions to Whatfix's strategic positioning within the technology landscape. He stresses the importance of selecting the right geography and industry to target, arguing that entrepreneurs should have a clear understanding of their market focus to optimise success. "Understanding the right geography and industry focus is crucial for entrepreneurs; our strategy has always involved a global perspective." 

The conversation then shifts to Whatfix’s financial performance, noting a significant reduction in losses as the company strikes a balance between profitability and growth. He highlights that Whatfix's revenue has increased substantially, with a reported annual recurring revenue (ARR) growth of 4.5 times since the last funding round and a recent revenue increase of over 40 per cent to 45 per cent in the past year, despite a tighter economic environment.

Scaling Challenges and Strategies

As Whatfix plans for further scaling, he shares insights into the challenges faced during this growth phase. One major hurdle is the complexity that arises with team expansion, where managing a small team differs greatly from overseeing a larger workforce. "As we scale, maintaining a strong organisational culture and efficient processes becomes essential, especially when transitioning from a small team to a larger workforce." 

The importance of organisational culture and the need to establish efficient processes becomes paramount as the company scales. He also mentions that growth must stem from diverse revenue streams, including new product offerings and geographic expansions, often starting with experimentation before fully committing resources. This approach allows Whatfix to learn and adapt strategies that work before scaling operations.

Funding Utilisation and Market Trends

Following a successful funding round of $125 million, Whatfix plans to enhance product innovation, particularly in artificial intelligence. The focus will be on developing AI agents capable of understanding human-like interfaces, alongside enhancing existing products. 

The company also aims to strengthen its go-to-market strategies in key regions such as North America, India, and the Middle East, and will prioritise building partnerships to facilitate scaling efforts. He notes a broader trend of accelerating digital transformation across industries, driven by technological advancements and the necessity for operational efficiency, suggesting that this trend will continue to shape the market landscape in India.

Competitive Edge and Unique Selling Proposition

In discussing Whatfix's competitive advantages, he highlights the company's unwavering customer focus as a key differentiator. "Our competitive edge lies in unwavering customer focus; we prioritise their satisfaction and feedback to continually enhance our offerings and ensure effortless user experiences." Customer satisfaction and feedback are central to Whatfix’s operations, with the company consistently recognised for its value-added services. 

He outlines the importance of supporting customers throughout their application journey, from initial planning to post-implementation support. Emphasis is also placed on providing effortless user experiences, which requires ongoing investment in technology innovation and R&D. "Our aim is to reinforce Whatfix’s position as a leader in its field, focusing on simplicity and effectiveness in our offerings."