Zendesk: Deep Dive Interview with Former Executive

Zendesk (ZEN) has long been a company on my radar. They have become a leader in the customer service space, and help scale many internet-first operations globally. They have demonstrated their ability to grow revenue and generate cashflow consistently. I like their pace of development, as well as their bets on conversation communications and AI, which should help them solidify their position in a large addressable market (~$85B per company presentation)

Zendesk's main competitors are Salesforce (CRM), in the enterprise space, and Freshdesk (FRSH), in the SMB space. Much of Zendesk's future trajectory depends on how well they can execute against these competitors. As you can see below, Salesforce really remains a dominant force and Freshdesk is gaining grounds on Zendesk outside US.

Overall, I think Zendesk is in a great position to capitalize on the global trend of digital transformation, with SMBs and enterprises across sectors increasingly placing customer experience as a priority.

Below is an interview I conducted with a former Zendesk executive. I hope you like the insights he shared. Key takeaways include:

• Zendesk decidedly remains laser-focused on customer support solutions, which is their core bet.
• Players like Salesforce and Freshworks are gaining grounds.
• Zendesk can capitalize on the ample room for innovation and optimization existing in the customer support segment

ARPU: What makes Zendesk Support, the company's flagship product, unique among all the customer support software out there?

Early Insight

Former Zendesk Executive: When Mikkel and his two other co-founders started Zendesk, they had an insight that the existing customer support software then was merely an extension to accommodate the topdown implementation of overly complicated legacy business processes as opposed to approaching customer support from the perspective of customers; understanding how they interacted and how they wanted to be served. And that was the unique insight that served as the starting point for the company.

Design language

What you will find at the core of Zendesk is the design language, an absolutely insane focus on usability and user experience, both for the agent side, which they call the agent experience, as well as the customer side, which is the end-user experience. The user experience should feel natural and intuitive without any strong learning curve. All user interactions were designed to be as easy as possible without introducing any friction in the process. And combining this insane focus on user experience with their initial focus on the SMB segment, as it had been in the past decade, Zendesk was able to become the dominant software for customer support in the SMB space.

The product has evolved from there, but the design approach is what makes it different. Salesforce tried to copy that a few times, but you simply cannot replicate it unless you begin your product development with design and user experience at its core as the first and the ultimate goal. And that's why I feel Salesforce failed to compete, particularly with Desk.com, which was an acquisition that targeted SMBs to compete directly with Zendesk Support. And after two or three years of trying, Salesforce had to take it off the market.

What are the alternatives to Zendesk that customers consider?

To fully understand Zendesk, you have to know how the company became a billion-dollar company by 2020 and how they aspire to reach $4.6 billion in revenue by 2025.

Two of the key drivers of the company's growth are its focus on SMBs and velocity acquisition, offering a free trial period for users before converting them to subscription customers. Velocity acquisition is now a standard process, but it was an innovative approach in the early days of Zendesk. And what Zendesk did was to make the whole process fully automated with marketing campaigns driven by their deep understanding of how customers work that continue to feed into the conversion funnel. This robust acquisition engine required very few sales touchpoints, similar to Atlassian's approach to its DevOps environment with Jira. It's crucial to understand this aspect.

Another key driver of that growth was Zendesk's insane focus on customer experience, and viewing customer support as an integral part of value creation for customers were shared by many hugely successful companies. When the likes of Uber, Lyft, Pinterest and Airbnb were just starting out, let's say the founding team with a crazy idea, Zendesk was, without a doubt, the first choice for these small companies, and they are still Zendesk customers. These companies realized establishing a customer support environment that benefits the end-user and understanding their customers through customer interactions and support interactions were as relevant and as important as the core product. And Zendesk did the job perfectly.

Salesforce

Zendesk continues to be primarily focused on SMBs, and the company has made it clear to the market they want to be the best at what they do, which is a customer support solution for everyone.

At the high end, Zendesk is now, inevitably, running into Salesforce with its own cloud-based services. Salesforce, simply by the sheer nature of CRM and cloud-based marketing and commerce services, is totally dominating the enterprise segment. Salesforce owns the segment because they are so dominant with their CRM solution. But Zendesk has made some very successful inroads in taking customers away.

Freshworks: A more affordable Salesforce

At the lower end, you have a company called Freshworks, which has come on very strongly in just a few years with their initial solutions on Freshdesk, which essentially took the Zendesk playbook but made it much more affordable. They have a cost advantage for those bands where customers are highly cost-sensitive. That means mom and pop shops with four or five or maybe ten support agents but not nearly a global presence. For this segment, it's much more cost-effective to adopt Freshdesk.

Freshdesk initially focused on the whitespaces - geographic, industrial, or functional areas to which Zendesk was not paying close attention. And while Zendesk was growing to become a billion-dollar company, it left too many white spaces behind. Some were in Africa, some were in the Indian subcontinent, and some were even in Central Europe. Some were natural whitespaces, but you simply cannot afford not to pay attention. And Freshworks, or Freshdesk as it was known then, really seized the opportunity.

When Freshworks started, they could and decided to build on the most modern architecture and environment, which was AWS with all of its built-in tools, built-in data models, storage, security, and whatnot that Zendesk did not have when the company started in 2007/2008. Freshworks fully capitalized on this advantage to drive innovation at a lower cost, higher clip, and faster pace. This also explains the high velocity with which they could penetrate new markets, achieve growth, and go public.

The difference between Zendesk and Freshworks becomes more pronounced when we compare their respective long-term strategies.

Zendesk, even with its Momentive acquisition to build out its product portfolio, they're still focused on being one thing - to become the best all-around customer support solution in the market. Of course, the portfolio has artificial intelligence, chatbots, self-service panel components, automation, and more, but they're not really venturing much beyond their singular goal.

Whereas if you examine where Freshworks is heading after its IPO, they now have solutions that go way beyond customer support. They now have a marketing solution, an H.R./workforce management solution, and even a component for I.T. service management. Freshworks is much broader than just customer support. They are trying to be a Salesforce with a broad product offering but targeting SMBs with a lower price tag but a higher rate of innovation using a very agile development model. This is something that Salesforce cannot do simply due to its sheer size and commitment to the enterprise markets; Salesforce cannot compete effectively in the SMB market.

In contrast, Zendesk has made it clear that they want to be neither broad nor deep. They want to focus entirely on the segment they dominate today and will continue to lead, which is the customer support market.

I want to pick up on the divergence of the long term strategies between Freshworks and Zendesk. How much room do you think there is for innovation within the customer support space?

From a product person's product perspective, the dominant macro trends in our daily life influence how brands today relate to consumers and how consumers relate to brands.

Instant communication channels

What we can be sure of today is the landscape of commercial interactions has completely moved online. This shift applies not just to pureplay e-commerce but also citizens interacting with government or government agencies, patients interacting with the health care providers, families interacting with their schools or their daycare and so forth.

The move from traditional in-person or person to person interactions to online has enabled and introduced scale. Companies, agencies, and schools had to create an environment online where they could solve issues and provide self-service information that feels seamless and intuitive to the end-user. And that's where software comes in, and this is really where the biggest challenges still are.

For example, classic call centers with 800 numbers here in the U.S. still exist, but they have dramatically diminished in relevance, replaced by channels where consumers actually live. And consumers today live to a degree in email, but much more in the instant communication world - the worlds of WhatsApp, Instagram, or Twitter - right now. And commercial entities, as well as the other entities I mentioned, now need to position themselves up in that world to interact with customers to receive complaints and issues and provide solutions.

The most desirable group, the young generation from 18 to 34, do not live in the world of voicemail or even email. For them, it's all about texting and chatting; it is all about WhatsApp and Instagram. That's really where the first opportunity for innovation exists and comes into play, and this is exactly where companies like Zendesk, Freshworks and even Salesforce have to interact with customers. Chat solutions and messaging integration are probably the most important features they are working on today.

Implementing Artificial Intelligence

Number two, they heavily invest in AI, which is what's really driving the chatbots that we are all familiar with. Let's say you visit a website as a customer. And you immediately get the opportunity to interact before you even buy anything. This is no longer the classic support scenario. Before you even buy something or interact with the contents online, you get the opportunity to engage with the chatbot, which is instrumented to understand a lot of your history, your background, and your past transactions.

And the chatbots can bring in surprisingly meaningful content and context that allows you, as a customer, to move forward with your decision. And this is all within the context of replacing a human agent, which is very expensive - human capital is super expensive around the world! You want to take that out of the equation and automate to the max, where a knowledge base, an intelligent chatbot, and a smart decision-making system can do the heavy lifting, offload the human from all the work and try to come to a conclusion based on the information the system has. This is where innovation really happens.

But at the same time, the system needs to be smart enough to detect the context of the date & time, detect emotions like frustration, and detect potential friction points where the risk of losing the customer for that particular issue is really high.

And then we have to consider the economic consequences. The system has to be smart enough to link in a human agent at the right time with all the information that was in the context of the conversation, with the context of what makes that exact consumer issue unique, and have that readily available on a single screen, so the human agent can drive the issue towards resolution.

The negative scenario is this: you first go through an AI-powered chatbot, and then you get passed on to a human agent who asks, "Well, tell me what's going on?" when you're already frustrated. You, as the customer, will go, "Oh, this is just bs", "I have no patience for your customer service", "I will probably go to your competitor who offers me a better level of service more in tune with my needs and my particular situation". And that's really what drives the competition right now.

This is why the Zendesk approach – again, I'm no longer an employee, and I'm not really vested in the company – focuses on making that process nearly optimal using a combination of AI, through chatbots, but also with really smart self-service components where they can say, our clients can actually set up a self-service environment where customers can help themselves without ever having to explain to an agent what the situation is or what needs to be resolved.

For standard cases like ordering the wrong size, shipping to a wrong address or delayed shipping, self-service makes a whole lot of sense. Now, if there are some very peculiar individual issues are involved, it makes sense to bring a human agent into the interaction to resolve that particular issue. But there are so many cases that can be standardized relating to order processing or order execution that can be done automatically through decision systems or even a smart intelligent bot. And that's where the investment goes.

And again, it has to be across the channels, as I mentioned earlier. Suppose a consumer prefers to interact and talk about the brand on WhatsApp. In that case, the brand needs to understand that serving that need is to be in tune with customers' needs and a way to understand how this consumer really, really behaves on WhatsApp - learning how they share that information with their friends in their network about how good or bad the brand's service is. We need to integrate social channels into our interaction scheme to which we react.

Understood that, very clear. That’s a great explanation of where Zendesk stands today. That also fits into their larger theme of being a customer intelligence platform, right?

Exactly. When you look at the websites of Salesforce and Freshworks, and see how they present their support options, customer intelligence sits at the very top. It's really at the top of their promise now. They say, “Here's what we invest in, and here's how we can help you improve your customer satisfaction score by being intelligent in the interaction before the consumer even gets a chance to feel frustrated.”

I want to move on to other products and features of Zendesk. The core functionality that Zendesk customers are looking for is actually Support, and then all the rest, like the Sunshine, Explore and all the analytic features, feel like the icing on the cake. Is there any metrics that you can use to evaluate how much additional value a customer can derive from all these additional features?

So allow me to break this question into two parts; where the company was in 2018 and 2019, and where it is today.

Pre-billion: Support first

So when I was there, we had five GMs who ran five distinct business units, which is what we call today a multi-product strategy. So you sell Support, which is the core product, as you need Support before you need anything else. The add-on products were Chat, which today is the messaging environment; Talk, the classic call centre environment; Guide, the self-service environment; and Explore, which was the underlying analytics to understand the operational performance of a support organization.

In addition, we had Connect, an email system that the company sort of shut it down and then Sell, a CRM solution that deserves another conversation. But fundamentally, it was Support, Chat, Talk, Guide, and Explore. That's what made up the support solution. In the old days when the company grew from 200 million to a billion, it was the go-to-market motion of let's sell Support and then re-engage the customer to upsell and cross-sell these other capabilities because eventually, they would want to turn on messaging. Eventually, they would want to set up a call centre. Eventually, they would want to explore self-service. And of course, everybody needs analytics, right? So that was the thinking.

When the company reached a billion in revenue in 2020, the board came in really strong and said, "Hey, this was a really solid business strategy to get to a billion in revenue. Now, if we look out for the next five to ten years, how do we get to become a $5 billion company? And where is the growth coming from?"

Post-billion: shift to Enterprise

The company decided the old strategy of multi-product and cross-sell/upsell was no longer the right strategy to drive future growth. Future growth would still be driven by owning SMBs, but expanding and transitioning into the enterprise market. And the best we could do that was to sell everything as a platform rather than as individual products. So this is where the whole new strategy came to play with the five products I mentioned, and the underlying platform is Sunshine. Sunshine is the enabling platform that, for the first time, brought the company a common data model, common workflow, common security and an API.

Enterprise customers require a drive through play with an API layer. They do not want to have a closed box. They want to have an API layer that they can tap into, bring in data, bring in their own solutions, but also have the ability to expand and build custom solutions. Enterprises typically engage service providers who can promise, "Hey, you can customize the solution and build custom applications specific to your use case specific to your industry."

And that's what the transition was in 2020; selling the suite and establishing Zendesk as a platform rather than a multi-product company. So the individual GMs are no longer there. Strategically, Zendesk is in a better position to compete with Salesforce, who, from the get-go, had their focus on enterprise and said, "We're a platform. We're not messing around with cross or upselling small and innovative products. We sell you the entire solution fully integrated with all the bells and whistles and the right analytics underneath. And that's the solution upon which you want to build your long-term customer support environment." Does that make sense? It really was a fundamental business shift that Zendesk underwent in 2019/2020, and that's what you see today.

What do you think of the barriers to adoption amongst enterprise-level customers who may require integration with legacy software and systems?

Well, there are always going to be barriers to entry.

Salesforce remains the dominant player

One of which is Salesforce being so dominant and so aggressive in defending its position. That means for another vendor to have any meaningful relevance, it needs to integrate with Salesforce CRM, which is the global gold standard. If you don't integrate with Salesforce CRM, you cannot be a corporate solution, period. And Zendesk always had the CRM integration. Clearly, the CRM integration from Salesforce with its own suite of cloud, of course, is much deeper and much tighter and much more privileged than what they can offer to external vendors. However, competition laws are such that they have to open CRM to everyone. So Zendesk has invested in the integration with Salesforce CRM. With the go-to-market, we say, "Hey, we are much better at customer support than Salesforce because Salesforce is big and has a slow pace of innovation. They don't have a passionate user base as we do." So, that's one of the key entry points.

No Greenfield going up-market

The second is that there is no greenfield in a going up-market motion in the enterprise segment. Every enterprise has a customer support solution that may be good, may be bad, may be legacy, or maybe on premise. But it doesn't matter. It is a lengthy, costly, very competitive landscape.

The digital role for the Chief Customer Officer

Suppose a global enterprise decides today to rethink their customer support strategy in terms of where they want to be in 2030. You will find their considerations for how they want to provide customer support and how they want to be seen by customers as their top objectives. And this is where I think the fundamental shift from classic business organization to the modern organization comes into play. So in today's world, the Chief Customer Officer is the new digital role. The role is really built not around business processes but around the understanding the needs and values of their customers.

And the Chief Customer Officer sits on top of sales, marketing and support because it is just one value chain, and the customer exists in all three parts. So it's no longer the CMO who decides here's the marketing solution we will use, the sales executive who decides here's the sales solution we will use, and the support executive who decides here's the support solution we will use - it's the Chief Customer Officer's responsibility.

A transformation in focus for modern businesses

We are now in the middle of a fundamental digital transformation, and the pace is ramping up. The opportunity now is not about building a business environment built around business processes but about building a business environment built around customers' needs and their long-term engagement with a brand. And when you flip the focus from internal processes, which is the ticketing system, to really understanding where the consumer and the customer live before the sale, during the sale, after the sale and then in the support environment, you have a completely different focus and a completely different set of KPIs that really matter in terms of building a long-term relationship with the customer. It is much more expensive to acquire a new customer than to retain an existing customer and keep that person happy and come back multiple times from multiple purchases.

It is all about integrating sales, marketing, support into an environment where the customer is at the centre. And all the processes that link the customer to unlocking potential long-term revenue, repeat sales, and share of wallet for a brand are at this centre.

If you apply that thinking, then you begin to understand that companies like Salesforce, who have a CRM, a marketing cloud, a commerce cloud, and a service cloud, are really well-positioned to simply say, "Hey, we can actually serve the needs of our customer for long-term because we can offer the complete solution."

Now Freshworks. Interestingly, instead of trying to be the best in customer support by continuing their success with Freshdesk, they became Freshworks, and they are focusing on a much bigger scale. As I mentioned earlier, they're focusing on sales, marketing, HR and workforce management solutions, and even internal IT helpdesk.

So they're really going to market and saying, "Hey, we're trying to bring everything together, build around the customer, but with a market focus on SMBs and small organizations for whom Salesforce is simply too expensive, too big, too difficult to install, and too costly to maintain." So they're not exactly going after Zendesk in the long-term, but they are trying to establish themselves as a low cost, innovative, agile alternative to Salesforce, which is very, very clever, I think.

Now the question of will they succeed is a completely different question. Developing deep industry expertise in all these areas requires a lot of investment in Freshworks. They will also need to bring in industry actors who can build products that serve particular use cases for their customers.

But from what I can see, their IPO shows they certainly have the capital to continue down that thread and build out a much broader platform than Zendesk. Whereas Zendesk, by who they are, where they make investments, and even with the acquisition of Momentive - which again is also sort of an extension of their customer support platform - is trying to understand more about the customer intelligence. They really try to stay in the box and aim to become the dominant player by being the best vendor in customer support.

Great, this is super helpful. The next set of questions is more on the culture and the management side. How do people get resources for a new idea at Zendesk, and what is the process like?

So the process was not very different from most SaaS companies. In terms of adding new features or capabilities, my division usually did our annual planning around certain ideas, which had to be grounded in a revenue target. A revenue target would typically be achieved if we could unlock a certain customer segment, industry, or geography by building these types of things.

And then, we would do the modeling around a revenue target that we can tag on, that we can explore, that we can actually attack by building these components. And that could mean we needed five more agile software engineering teams. So you would need to calculate the cost from the ground up. We could then have really a good understanding of developing new features.

We could bring new features to the market typically within a year. That was relevant in many instances to unlock a certain revenue potential. In a SaaS environment, that's typically how the product planning process works. Now that covers probably 70 percent of what you can build.

There are other areas called tech debt, which means in the fundamental architecture, some older technologies have to be replaced for us to be competitive. So they have nothing to do with new features or revenue but had to be addressed at some point.

To give you an example of tech debt, moving from their own captive data centers, which they maintained in 2016 or until 2017 around the globe, to running everything in AWS was one. AWS has everything: storage, processing, you name it. And you don't need to have 200 engineers to maintain your own data centers. You can now basically secure everything from AWS and not worry about the backend.

Another example is the API layer. APIs were not really present in Zendesk, whereas it was extensive for Salesforce and Freshworks. As it was a newer product, Freshworks was built on a modern architecture that also had an API layer from the get-go. So they didn't have that kind of tech debt from legacy technology.

And then secondly, you have to think about strategic initiatives like entering the enterprise segment or moving up-market. There are certain things you simply have to do that may not be reflected directly in revenue but help you position yourself much better against Salesforce. And that's how the whole analytics platform came to be. Because Salesforce had Einstein, and they made a lot of noise about Einstein Analytics, Zendesk took over a very poorly implemented third party solution. So when I was there, we seemed to be able to take control of our destiny by building our own analytic solution and integrating it as a native component into what we were offering to our customers.

Underneath that, there was a deep planning process, which was not specific to Zendesk. Most SaaS companies operate that way. When you have annual planning processes, you'd probably get a budget for, let's say for 500 engineers, and you would have to compete for a share of these engineers against other initiatives. And then the executive team would weigh in and say, "Hey, we're going to be overweight on Platform, be underweight on particular features because these are the KPIs we want to achieve in the market."

Outside of the fundamental activities, you have to consider, "What should we acquire? What can we acquire?" Rather than building bigger solutions in-house, you need to look for good opportunities and potentially pursue an acquisition to bring a solution into our company that integrates easily and really helps us reach our long term goals much, much more quickly.

That makes a lot of sense. Can you comment a little bit on the culture and the dynamic at the company?

The culture has, again, had a fundamental shift from when it was below a billion to after a billion. Below a billion, it was really the founding team with Mikkel as the CEO who had his inner circle around him. And the company was driven from the IPO in 2014 to a billion in revenue in 2020 by this one singular goal of hitting a billion dollars in revenue through aggressive growth around the product portfolio that I explained earlier.

What changed then was the board. They had a huge influence in steering the company in a new direction. "Hey, let's rethink and let's really focus on everything because what made us successfully become a billion-dollar company will not likely be the right strategy." The first big decision was expanding from SMB into enterprise. The board had influence in the business decisions not to abandon SMB but to extend our reach into enterprise by building our product, the scale, the ecosystem, the professional services and hiring enterprise-capable executives into their organization.

At the C-level, they brought in new executives that had this level of "been there, done that" attitude. They were executives who had run multi-billion dollar businesses before. And that's how Zendesk ended up pretty much replacing the entire C-suite with executives from Salesforce, Amazon, Oracle and Microsoft.

They have the operational expertise and have been part of growing a business to a multi-billion. In fact, the only person who didn't have that expertise in the company was making himself the CEO. But he now surrounds himself with executives who've been there done that, which I think is a very smart move. The question is, how does Mikkel fit into that? And does he have the backing of the board that he can continue to do that?

Then in terms of culture, the company was always very numbers focused and growth-focused. And again, as I explained to you, the product planning process was very, very rigid and very, very analytical in terms of trying to determine how we can grow. But now, when you go into platform, grow to a multi-billion-dollar business on a larger scale and bring in bigger acquisitions, it gets more complicated. It gets more complicated fairly quickly.

So the company truly has not a good track record in terms of acquisitions and really not a good track record in executing and making these acquisitions work. This is certainly something that I think they were struggling with before and will continue to struggle with. We'll see how this acquisition of Momentive plays out. Some say, "Hey, it may not go through because the sentiment in market sentiment is so negative about this acquisition.", which is all speculative because no one really knows. But there's a very, very large segment in the market that says, "Hey, this is not a really good thing."

You then couple that with Mikkel and the culture to get back to your question. He has pluses and minuses. The pluses are he's very focused on the employees, on their well-being, on promotions from within and whatnot. He has a very, very high rating in terms of employee loyalty. He is very much loved in the company. But at the same time, he is whimsical. He sometimes decidedly tries to be the antidote to Marc Benioff. But Marc Benioff is very publicity focused and very smart in terms of how he presents his personality. He cannot fail because Salesforce has become a global leader, and Marc is sort of this super intelligent guy. Mikkel is more like, "I have an emotional side, I am softer, I don't want to seek all the publicity, other things are more important to me, including employee benefit." The outcome is that customers love him. Customers love Zendesk. Customers are passionate because the company is honest. They don't nickel and dime customers, and they really can trust where the company is going.

Compare that to larger enterprise companies, which may try to nickel and dime customers and charge for everything, always late for new features. They are not necessarily as trustworthy as a smaller company.

I would say because Mikkel is a little hesitant, a little emotional. He's not exploring the PR angle of the company and is not always communicating the strategy in the best light. And that's why you have a situation where all of a sudden, the analysts and the market react negatively to an acquisition, even though it may be crystal clear in terms of how they have modeled this acquisition and how the numbers look internally. But they are not market savvy; they are not PR savvy.

Understood, and I want to follow up on that theme. Can you think of any example where the company took pain for its customer?

I cannot be very specific on the customer, but remember when I said we transitioned from SMB only to really starting to invest in enterprise? That is very, very tricky. And it's not done in months. It's really a two to three year process. And I think they have the momentum now because I think they now have over 100 customers in a multi-million annual contract type.

But taking the pain is simply building enough trust in saying, "Hey, our product strategy, our scale, our feature set will help you present your customers with a better support environment than Salesforce does." And in the beginning, you don't really have any reference customers, and you don't really have big success stories out there in the market. You really have to sort of take the pain and say, "Yeah, you have to trust us on this."

And number two, some of the things that the company had to build, particularly the API layer for enterprise customers, was simply not there. But you need to close these initial contracts in enterprise to build the momentum and to be able to go to other enterprise customers and say, "Look, this is customer A, this is customer B, this is customer C, they trusted us." These enterprises know that their current implementation of what they have from Salesforce or SAP or Oracle or whatever, it is not good enough, but Zendesk can really get them to reach their goals in three to five years. That's where Mikkel was directly involved with very big brands and where we also had to, on short notice, build some custom solutions until the core product caught up. We launched the key capabilities to a broader market, whereas initially, that solution may have been a custom solution or professional services that we delivered. So that was certainly taking pain.

I also have to mention, especially when you look at APAC, there are some incredibly fast-growing companies. For instance, when you go into markets like Indonesia or Vietnam, you never have a middle ground. They went from non-digital to fully digital in one swoop.

There are food delivery businesses or mobility businesses that came out of nowhere where Zendesk became the partner. But when these companies scaled from 0 to 60 million tickets in one year, Zendesk had never seen growth like that globally but worked closely with the customers and helped them. You have to understand what that means.

They have this kind of load on new customer service and then build a meaningful support organization, not just the software they use, but building an organization with rules, guidelines, and hierarchies. For example, how one should escalate certain cases so you're not destroying a business but really help you enhance the business long-term.

I think that's what the company itself took a lot of pain to be seen as a partner in this explosive growth rather than just a software vendor. And then that meant we had local people in Vietnam on the ground with all the expertise that went way beyond product but really helped them with organizational development. Because support organization has to be developed right through a particular business case, you cannot just hire random people off the street and think everything is fine.

That's great. My final question is, what do you think is the most misunderstood thing about Zendesk?

Misunderstood. Now you put me on thin ice. Probably what's most misunderstood, is how thorough and how analytical the internal business processes are.

There are no decisions made without a truly deep dive into the business case, its alternatives, its scenarios -- good and bad -- before it lands in a C-level environment where the board decides over the few steps to say, "We are going to make an investment." which could be an acquisition, a product extension, a geographic extension, or it could be the end of life in a certain product.

And again, this is something that probably because it is such an SMB-focused company and they had such hypergrowth, it is very programmatic. The analysis, thinking, and modeling, especially the financial modeling behind every decision, is very deep. And then a lot of people don't see that.

Understood. OK, that's great. I think that's it. Thank you so much for your time!

Thank you very much. Again, even if you thought you missed something and I should have gone deeper, we can always do this. But I really enjoyed your questions and enjoyed the focus that you brought to this conversation. So thank you so much.

(Note: Interview transcript has been edited to improve readability)

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