How Zenoti Scaled up its Business Globally

Scaling up is all about unlocking new opportunities, expanding your team & building upon its strengths, and exploring new markets. Now, this may sound simple but there are a lot of challenges involved. Failure to scale up at the right time and in the right manner may result in product failures, rework, and, eventually, financial losses. However, Zenoti, an Indian end-to-end cloud-based software solution-provider for spas, salons, hotels, and med-spas, managed to scale up their business successfully. Here’s a look at their journey.

How Zenoti Scaled up its Business Globally

The Zenoti platform can harness the power of enterprise-level technology for small & large businesses through reliability and scalability. Presently, the company provides SaaS-based solutions to over 12,000 spas & salons based in over 50 countries. It allows users to seamlessly manage various business aspects, including appointment bookings, employee management, inventory management, marketing, POS, CRM, and others, through a comprehensive mobile solution. It also helps clients to streamline their systems while reducing costs and enabling better customer retention & spending.

Sudheer Koneru, the CEO of Zenoti, had handled C-level positions at various prestigious organizations, including Microsoft, Intelliprep/Click2Learn, and SumTotal. On his 40th birthday, he announced to family and friends his desire to become an entrepreneur. After this announcement, Sudheer and his brother Dheeraj entered the wellness industry by starting a chain of spas and salons across Hyderabad.

The Problem

During that time, most spas and salons utilized various legacy software programs for their operations and switched between them as & when required. This made operations expensive, inconvenient, and error-prone. There were chances  of data duplication as there wasn’t a “single source of truth.” Sudheer and Dheeraj soon started facing the hassles of managing several outlets from a single location with no centralized software to control operations.

Sudheer started thinking about a possible solution to this problem. Through his background in technology & product building, he was quick to envision a one-stop cloud-based solution that would solve their problems. In 2010, Sudheer and Dheeraj co-founded an end-to-end enterprise cloud software solution capable of handling back & front-office operations of spas & salons having multiple outlets. Through this solution, they were determined to solve real-world problems in the wellness industry.

The Solution

The founding of Zenoti resulted from hundreds of problems that the founders had to conquer in the struggle to keep their spa & salon chain alive. They built an offshore software development team in India that spent almost a year on product development. However, while their team was building a product in India, the founders started exploring Southeast Asian & Middle-Eastern markets.

Targeting the U.S. Market

There was a higher possibility of finding the product/market fit in the U.S. owing to more robust & well-established wellness chains based there battling similar problems. However, Sudheer knew that taking their product to a larger market wouldn’t be a piece of cake, primarily owing to varying customer expectations and operational challenges that may arise. Thus, they spent almost 3 years finding a product/market fit first in India and later covering the continent of Asia.

How Zenoti had to adapt to the changing U.S. market

Although the founders had extensively researched how spas, salons, and fitness centers in the U.S. functioned, little did they know that by the time they decide to launch their solution there, operations would differ significantly. The U.S. market had transformed into single-service salons offering blow drys, lashes, massages, and others. Zenoti had to quickly learn & adapt to this changing market through ground research, telephonic surveys, and customer visits.

The company invested considerably into acquiring the first few customers and co-building the product to make it a great fit for the U.S. market. Initially, during the first 3 months, the company hired local sales representatives but soon realized that it was a grave mistake. Well-researched & personalized emails sent to spa & salon chain founders addressing their exact problems did the trick. Eventually, it was all about working dedicatedly, delivering the best, and letting the “word of mouth” spread.

Zenoti enters “the Unicorn Club”

In December 2020, Zenoti joined India’s SaaS unicorn club with $160 Mn in Series D funding. The company is now looking forward to scaling up its workforce and generating more revenue. The CEO, Sudheer Koneru, believes that the ongoing COVID-19 pandemic has further propelled the need for SaaS integration in spas & salons.

Final thoughts

Several small & large businesses prefer to build their offshore software development teams in India. Some prefer setting up their Offshore Development Centers (ODCs), while others avail offshore development services provided by IT companies in the country. While setting up their ODCs, organizations also benefit from services offered by reputed offshore staffing companies.

The growing popularity of offshoring is due to the plethora of advantages it offers, including access to a broader talent pool; the ability to enable round-the-clock operations & achieve a faster time-to-market; and enhanced cost-saving & high operational efficiency among others.

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.