Rafael Sweary: How to Stand Out and Go Public

by | Nov 11, 2021 | SaaS Founders

Rafael Sweary is the president and co-founder of WalkMe, a digital adoption platform that enables businesses to simplify their online experience and eliminate user confusion. On his watch, the company has gone public and received a valuation of $2.56 billion. He clearly knows a thing or two about what it takes to raise a SaaS business to the next level. SaaS Mag spoke with Sweary to learn more about his journey and how to build a SaaS product suite that stands out in the crowd.

Small Beginnings

“Our original idea for WalkMe was very simple. It is really thanks to our employees and our customers and our business partners that it evolved to what it is today.”

The original idea stemmed from difficult conversations one of the co-founders was having with his mother when she tried to bank online. He would regularly walk her through the processes of logging in and checking balances, but as time went on, he continued to receive phone calls and requests for help. He started to wonder if there was an easier way of walking people through technology.

“This is what gave us our name, WalkMe. We built walkthroughs for people to help them navigate websites, and we felt we could conquer the world.” After some initial tweaks to their offering, which included predicting problem areas and providing walkthroughs before their customers felt the need to call support, the product took off. There were three clear benefits from the get-go. Those who used WalkMe found that there was an improvement in customer experience, a significant deflection in calls to customer support and (due to quick customer engagement) they were able to start driving further action.

“So, if someone, for example, wanted to check their bills online. We could suggest better plans for faster internet. Saying, Would you like to upgrade? These suggestions started to be very successful, and then our customers started asking us if we could help them with their internal systems. So, when their customer care team is using a help desk, or when their sales team is using a CRM, we could build guidance with our tool to help them through those internal systems.”

The next phase for WalkMe was to provide analytics functionality to their product. To help their clients to understand their guidance procedures and how people move through their systems, they collected usage data and displayed it in an internal Management Dashboard. This kind of integrated analytics for a walkthrough service was unique, and it started catching people’s attention.

“The next thing that customers asked us was whether, instead of just guiding their employees to do something, could our solution perform some of those tasks automatically instead. Of course, we said sure. And this brought us to automation.”

The Power of “Yes” in a Changing Software Landscape

The effect of AI on SaaS businesses is growing exponentially, and WalkMe offers a good case study for how quickly SaaS businesses can learn the benefits of automation and machine learning. Sweary came to understand the importance of customization in AI and how this can unlock the potential of so many different business applications. But he also understood the simple benefit of having this positive attitude towards all client requests.

“I think the one thing that helped us build a platform like this is how we always tried to say yes to all of our customers. Whenever they asked for something, we tried to understand why it was important to them, and we developed it by investing a lot in R&D.” This attitude also plays into the notion of being a “best in class” business. Sweary explained to us that the landscape of technology businesses is shifting, and customers are not buying products with a Microsoft, Oracle, or SAP brand loyalty. They are looking for the top products that benefit their field, and they can often find products that sit head and shoulders above the rest. This presents opportunities for others in the space, including those that are lesser-known.

“The second big difference is that the decision-maker is different today. Frequently the choice to subscribe to a product is made by the actual user. It’s not somebody from the management team deciding what everybody’s going to use. So, it’s really democratizing. You can focus on the people who use the solution. No CIO can come to a marketing team and tell them what lead nurturing system to use.” When crafting marketing efforts, it’s imperative to know who the decision-maker is, and in this case, it’s the user.

A third point Sweary raised was the rate of digitization of all business processes. He explains that 15-20 years ago, the only processes that were digitized in most companies were the business’s financials. Now, everything is becoming digitized, but the digitization process often fails to have the desired outcomes. He explained this with an example:

“It’s one thing to use a CRM. It’s another thing to use a CRM correctly. Often, I’ll talk to a CRO, and they will tell me, ‘we have no problem with usage with Salesforce.’ And I would say, ‘ask your account executive what he’s going to sell this month.’ If he goes to open the CRM, you have a digital transformation taking place within your organization. But suppose he’s opening an Excel file or his notebook rather than opening the CRM to find the answer to your question. In that case, he is just using the CRM to document what he’s doing, and he’s actually still working in a way that is not taking advantage of all that a CRM can offer. If this is your organization, you’re not enjoying the benefits of a CRM — giving the right insights at the right time, recommending where to prioritize, etc. That’s a simple test for digital transformation.”

Advice for Taking a SaaS Company Public

Sweary was clear in his advice for SaaS businesses looking to IPO:

“It is something that you need to prepare for years in advance. I was very impressed with the thorough process instituted by the US Securities and Exchange Commission because they really look deep into everything about the company.  The level of scrutiny each company undergoes is a lot of work, but in the end, it helped ensure ‘IPO readiness,’ and I really appreciated it.”

Sweary explained that it takes a tremendous amount of effort to execute an IPO, which entails additional workstreams, budget allocation, and headcount to name a few. And after preparing your back office, you also have to prepare your potential investors as early on as possible. It is easy to think that this is less important.

“I would recommend you start three or four years ahead of your IPO, to start talking about what it is that you are doing, starting to tell your story. This gives investors a lot of confidence when you finally come out at the roadshow because they have seen you in several places and are familiar with your company. They have confidence in your ability to execute. If they see you at one point when you’re going public, they don’t have this reference, which can be detrimental. We’ve seen that things have been much easier with investors we’ve been in touch with in the past. The questions were much crisper, so I recommend discussing plans to IPO very early on.”

He also recommended working with a bank that shares your company’s vision. “When selecting a bank, don’t only look at their experience, but look at how you align with them and how passionate they are about telling your story.” As the bank has to do much of the leg work, it’s important that they are also invested in the project’s success. It is also essential to be transparent with your company’s board. “Don’t be afraid of your board; share your challenges. Be open to criticism. Be open to being vulnerable. Don’t try to paint a better picture than what is. You have very smart people that can help you, so lean on them. If you try to hide the real issues from them, and you try to paint a prettier picture, your company could face negative repercussions.” Your company’s board is often a last bastion of support for CEOs and founders who need advice on complex issues. “If you’re spending two hours with your board, make sure you spend it on the things where you need their help, not on what’s going great… remember, successful entrepreneurs should be humble.”

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