Vargha Moayed Looks Back On UiPath’s Path to Unicorn Status
Chief Strategy Officer of UiPath, Vargha Moayed, has overseen some eye-popping growth while learning some lessons every product-driven founder should know.
From the early days when Vargha happened to meet UiPath’s co-founder Daniel in Bucharest to the moment UiPath officially became a unicorn in 2018, the company’s strategy has been to stay clear-eyed and realistic about what works.
Vargha sat down to answer questions from LAUNCHub Ventures’ team, portfolio, and community members. In particular, he shared insights into partner relationships, why he doesn’t even remember what their early Customer Acquisition Cost (CAC) was, and why senior leaders need to stay close to their customers. Below, you’ll find the highlights of that talk.
When it comes to customer success, start with your own team
The Q&A started with a question about whether it made more sense to build an internal customer success team or to rely more on consultants. Vargha was clear that for UiPath, building an internal team from the beginning was critical for three reasons:
- When you implement, you learn
With an internal team, you shorten the feedback loop between customers and engineers. This kind of real knowledge about how customers actually use the product is incredibly valuable.
2. Partner quality is never consistent
Relying entirely on external partners for a core aspect of your business such as the implementation of your technology is tricky as experience has shown that quality differs among providers.
3. Partner’s may not dedicate their best people to you when you’re starting off
When you’re a startup, you’re simply not going to be a top priority for established partners. However, you should engage with partners early on as they can help reassure clients and act like a marker of credibility for your business.
Why “following the downloads” was critical
Several attendees had questions about finding product market fit and knowing when to switch into growth mode. Vargha stressed it was important to stay as close as possible to your customers. For instance, try making your product freely available and see who downloads it. Then if you feel that your product is evolving and you need to move from a product led to enterprise sales model, then you have a real life market study you can base this decision off of.
UiPath’s competition had a very traditional approach to selling their product, using salespeople, minimum packages, etc. Instead, UiPath decided to create a free version and build a community around it. In doing so, the company could follow their own downloads and could build sales and offices to meet that proven demand.
Why UiPath didn’t focus on CAC
Many attendees were surprised to hear that Vargha literally could not remember what UiPath’s Customer Acquisition Costs (CAC) were early on. More surprisingly, he argued that there was no use worrying about CAC early on. Instead, he argued for the need to focus on growing at the right time.
This came from UiPath’s experience. He admitted that they did overwhelm their market and overinvest early on, by opening 30 offices in 18 months. They were driven by a winner-take-all mentality.
To explain this, he told the story of when he met with one of their first sales teams who proudly explained that they were winning 65% of competitive bids for new clients. They were surprised that Vargha was actually not content, arguing that if they had that kind of a win rate, they should also have 65% market share. That kind of win rate should have been used to raise money and rapidly expand.
The lesson there was that the teams were focusing too much on the wrong metrics and didn’t realize it was time to shift into growth mode.
Why you need to stay close to your client as well as your product
One of the keys to UiPath’s success was that most of their decisions came from intense observation of how clients used their product. Sometimes, top management is too removed from clients with the salespeople acting as middlemen.
The problem there is that salespeople won’t notice things that a founder will. Currently, Vargha spends 35% of his time talking to clients because this gives him valuable firsthand knowledge of how the product is being used.
Essentially, tech companies tend to operate on marketing time or product development time instead of client time. You need to let clients drive your decision making, not your marketers or developers, Vargha argues. Otherwise, you risk focusing on things your clients ultimately don’t care about.
How UiPath identified and cultivated key stakeholders years ahead of time
One key element to UiPath’s success was identifying and cultivating the people who looked set to become key stakeholders down the line. They worked to find people who would be in charge of writing analysis reports in 2 years time and began talking to them. This allowed UiPath to help shape their thinking and ensured that when they put together that key matrix a few years down the line, UiPath was already a top contender.
Ultimately, while this requires some work, it’s far easier than trying to change that analyst’s thinking years later once it’s already been shaped.
How UiPath effectively built and scaled a global culture
Finally, Vargha described the core values which UiPath was built on. They knew the company was going to be multinational from the start, so they needed to create values that could expand beyond any single location. They ultimately decided on four:
Being humble allows you to listen to your clients.
You can’t let being humble make others think you’re not hungry, so it was important to also value boldness.
Agility and the readiness to move on opportunities was key to many of the success stories Vargha shared.
When UiPath does something, they do it 100%. Instead of second-guessing, they commit to their decisions and if they fail, they try to fail fast.
These four cornerstones to UiPath’s culture were repeated at every all-hands meeting, used in recruiting, used in internal evaluations, generally put at the forefront of everything they did. The result was that all four became deeply embedded and scaled with the company.
There’s no denying that customer-focus came off as the key to success for UiPath. Instead of getting wrapped up in product development or marketing, UiPath always kept its focus on its end customers, learning from them and rapidly implementing those learnings to improve itself. The results really speak for themselves.
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