In the competitive world of B2B SaaS, moving upmarket to serve enterprise clients can be a game-changer. Sendbird, a customer communications platform that has raised over $220 million in funding, successfully navigated this transition. CEO and co-founder John Kim recently shared insights on their journey from serving gaming startups to winning Fortune 500 clients.
Initial Focus: Gaming and Social Startups
Sendbird’s roots were firmly planted in the gaming and social networking space. Kim recalls, “Initially because were building social networks for moms and my first company was a gaming company, we’re like, oh, we should add chat for social and gaming. So that was our bread and butter.”
This focus shaped their initial target market. Kim explains, “I initially we’re targeting SMB startups who are making games, who just need a chat for their community features or for their social application. You want to add DM’s and stuff like that. So those are initial target.”
The Challenge of Startup Churn
However, Sendbird soon faced a common challenge in the startup ecosystem: client churn. Kim shares a poignant observation: “But over the years, which is kind of sad as entrepreneur, is that you start getting this email from the founders that you sold in the early days, like year later, they’re like, John, I’m sad to say this, but we’re shutting down our company. We ran out of money.”
This experience was a wake-up call. Kim reflects, “It’s like a really wake up call for a lot of startup founders like oh my God, startup is actually hard. A lot of companies do outgo out of business, we just never hear about it.”
The Shift to Enterprise
Recognizing the need for more stable, long-term clients, Sendbird began to shift its focus. Kim explains the natural evolution: “But over time, more and more customers in the mid market to enterprise categories start to survive over longer term period. We still have customers who were very early on, signed up very early on, are still our fantastic customer now in one of our larger customers.”
This shift wasn’t just about survival; it was about growth. Kim notes, “So we did have some of these mid market larger customers who continue to use us, but also expand and have a tighter relationship. So naturally our customer segmentation went more towards mid market enterprise.”
Adapting the Product for Enterprise Needs
Moving upmarket required Sendbird to adapt its product to meet enterprise requirements. Kim details some of the changes: “So from product feature, functionality perspective, we actually, it wasn’t like a discrete separate silo set of things. It was a fairly smooth evolution because people were asking for like read receipts, typing indicators or a few other features like emojis threads.”
However, the real challenge came in handling enterprise-scale traffic. Kim explains, “Now their traffic patterns start to look very different because if you think about ride hailing or food delivery, there’s a severe spike in certain times of the day or certain times of the year. Dating apps, there are certain peak times. So the traffic patterns and usage patterns start to look quite different.”
This challenge became Sendbird’s competitive advantage. Kim proudly states, “And this where are really the big secret sauces? Understanding how to work with varying customers of different scale, being able to handle globally in a massive level, that really became our secret sauce. That’s far better than any of our competitions out there is being able to handle those real time, different variety of traffic patterns.”
The Results: Scaling to Billions of Users
The move to enterprise has paid off significantly for Sendbird. Kim shares some impressive numbers: “We’re now handling, what, 320 million month active users, over six plus billion end users.”
Looking ahead, Kim has even more ambitious goals: “Right now, we only have 320 million monthly active users, which is roughly population United States. We got 5 billion people out there who are using mobile apps every single month. We want to get to them.”
Lessons for Startups Moving Upmarket
Sendbird’s journey offers valuable lessons for other startups looking to break into the enterprise market:
- Recognize the limitations of your initial market
- Adapt your product to meet enterprise-scale requirements
- Turn technical challenges into competitive advantages
- Maintain relationships with early customers who grow with you
- Set ambitious goals for scaling your user base
As Kim summarizes, the key to success is continuous evolution and growth: “We’re no longer just connecting people to people, we’re not connecting people to businesses.” This mindset has enabled Sendbird to successfully transition from serving gaming startups to becoming a vital communication tool for Fortune 500 companies.
For startups eyeing the enterprise market, Sendbird’s story serves as both inspiration and a roadmap. It demonstrates that with the right strategy, product evolution, and focus on solving enterprise-scale problems, it’s possible to successfully move upmarket and achieve significant growth.
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