Why Freshworks’ founder transition reveals a SaaS leadership paradox

When Girish Mathrubootham posted on LinkedIn his farewell note on moving on from Freshworks—the SaaS venture born in Chennai that came of age with a listing on the Nasdaq—the sign-off was generous, celebratory, and filled with the right notes around togetherness: kudumba (community), dreams, and leadership. Yet, between the lines, emerges a paradox: India’s most successful SaaS company (worth $3.74 billion) is now firmly run from America, by Americans.

In December, as the 50-year-old founder steps down as executive chairman, the baton will not pass on to an Indian, nor even to an Indian-origin leader, but to Roxanne Austin, a seasoned U.S. executive as board chair. Dennis Woodside, an American with a pedigree boasting of McKinsey, Google, Dropbox, ServiceNow and Impossible Foods, is already CEO. Johanna Jackman is the chief people officer, while Mika Yamamoto is chief customer and marketing officer.

Strangely, it feels like the script has flipped.

The world’s largest technology companies, Google, Microsoft, IBM, Adobe, have Indian-origin leaders at the very top. Silicon Valley entrusts its crown jewels to Sundar Pichai, Satya Nadella, Arvind Krishna, Shantanu Narayen. In contrast, India’s own software product champions are increasingly warming up to foreign hires, largely American executives, in the top management.

If trillion-dollar firms are deemed safe in the hands of Indians, why are the much smaller Indian SaaS startups looking Westward for leadership?

One reason for that could be the pressure of go-to-market (GTM) and being close to the customer as the US remains the Mecca of demand for Indian SaaS.

According to SaaSBoomi-McKinsey report, the Indian SaaS industry is projected to generated $50-70 billion, capturing around 4-6% of the global market by 2030. Yet for now, the numbers underline how small the sector is. Over 1,000 funded Indian SaaS startups together clock only $2-3 billion in sales—that’s an average of just $2-3 million per company. And those with annual revenues under $5 million are growing at around 50%, far slower than global peers at 150-200%.

Further, winning enterprise contracts in North America can be a far more arduous process (given the clients are small and medium businesses) in an industry where in-bound and out-bound marketing are treated as gospel. But it’s here that many Indian SaaS founders unconsciously internalise a narrative: that GTM strength lies with Americans, while India’s are better at coding.

Woodside’s appointment fit that script: for Wall Street, he is a known face; for enterprise buyers, he is relatable, networked and credentialed. For the Freshworks board, he is proof that the company is growing up and doing the right things.

The reasoning is not completely wrong: scale in SaaS is as much about distribution muscle as about product brilliance.

But does it risk hard-coding a bias?

Ironically, America itself has already disproved that notion by elevating Indians to the very top of its own giants. Yet Indian SaaS founders seem hungrier for “Western validation.”

Not all follow this path, though.

Zoho, the bootstrapped vanguard who started the SaaS movement out of India, continues to be led by Sridhar Vembu, who has resisted the Valley playbook and, in fact, pivoted his HQ to stay rooted in India.

Druva, BrowserStack, Postman, Zenoti, Eka Software and the likes remain founder-driven. Possibly, Freshworks by virtue of being India’s first marquee SaaS IPO may have wanted to set a different precedent--one that amplified the optics of “Made in India, Managed in America.”

Girish’s farewell is not a retreat though. Through Together Fund and working with the next generation of AI startups, he is doubling down on the “Product Nation” dream and, in his own words, will remain Freshworks’ “proudest cheerleader.”

But will his departure crystallise the leadership dilemma in Indian SaaS? Will the next generation of product companies grow up believing they need an American face to scale? Or will they take inspiration from the likes of Zoho and other Indian SaaS founders to claim not just the product but also the boardroom as their own?

Besides engineering brilliance, Indian SaaS must build and back a leadership pipeline in sales, marketing and customer success that is global.

The growing pay disparity between foreign and Indian executives has already caused unease among employees in the SaaS world: a reminder that parachuting in Western leadership does not guarantee performance or harmony. Quite a few Indian SaaS firms have shown an obsession with hiring talent who have been through “hyper-growth” phases, in the hope that they can replicate the same playbook “in scaling talent and business.” Yet, Freshworks itself, post-listing, has struggled to create consistent shareholder value, proof enough that even “proven local talent” is no guarantee of market success.

Also, with AI upending every playbook in enterprise software, now agility matters more than pedigree or geography. According to SaasBoomi, the rise of digital go-to-market, that is enterprises comfortable with assessing products and making business decisions via Zoom, is increasing rapidly. This fundamentally alters the playing field for Indian companies in terms of access to customers and end markets.

Yet, as long as Indian SaaS founders remain tethered to investors and boards that instinctively look West for “credibility,” the paradox will persist. Mindset, more than talent, may well be the bottleneck Indian SaaS must overcome.