How did a company that nobody'd ever heard of find hundreds of beta users, and even convince them to pay for access? Wade Foster tells the story behind user acquisition at Zapier.
Hello everybody, this is Courtland from indiehackers.com, and today I've got Wade Foster, the CEO of Zapier, on the podcast. How's it goin', Wade?
Pretty good, thanks for having me, Courtland.
Yeah, thanks for coming on the show. I'm gonna do my best to explain what Zapier is, and then I would love for you to go ahead and explain what Zapier is, in case I do an awful job. But Zapier allows you to connect practically any apps and products to each other so that you can automate your work. For example, if you get a new tweet, you can automatically have Zapier create a draft in your Gmail inbox. Or add a row to a Google spreadsheet. So personally I think Zapier is an invaluable tool for people who don't know how to code, and also for developers. I use it at Indie Hackers because it's way faster than learning 100 different APIs and coding it all myself. That's my interpretation of what Zapier is. Wade, how would you explain it?
That's pretty good, I generally talk about Zapier as like a workflow automation platform. Hooks into about, I think we've got 800 different apps now, so you know, tools like Salesforce, Slack, Google Apps, MailChimp, Stripe, you name it. Like if there's a SaaS app out there, it's probably on Zapier at this point in time. And then like you said, you can set up these little rules that automate pushing data between various apps. And it really does help you, you know, speed up time, automate kind of the mundane work you've got going on, and you can end up building some pretty cool stuff with it.
Yeah, I think it's one of those tools that, now that I'm like super familiar with it, and I use it all the time, I wonder how I got anything done without it. I guess I just did everything by hand and spent a lot of time hooking things up. And yet it's pretty new, you know? Like, for most of the internet's history, there was no tool like Zapier. And so I really wanna at some point in this interview ask you questions about like how you end up marketing a tool that, you know, doesn't really exist and trying to explain it to people who've never heard of it. 'Cause I'm sure in the earlier days like trying to figure out what messages resonated with people was very difficult. But we'll get to that later. Let's start off in the very beginning. Can you talk about like the earliest days of Zapier when you guys were maybe working on the prototype or just coming up with the idea?
Yeah, so Zapier started as a side project between me and my two co-founders in Columbia, Missouri in 2011. And so the way it originally came about was Brian and I, one of my co-founders, we'd been doing just various amounts of freelancing, you know, odd web jobs, basically. Anyone that would pay us to do anything on the internet was the type of work we would do, more or less. So you know, in Columbia, Missouri, so not like a super tech-centric town, there is some stuff going on, but you know, it doesn't compare to, say for example, like San Francisco. So like basic WordPress installs, you know, whatever, right, was the type of stuff we would do. And a couple times things came up that were like, you know, get this PayPal sales logged in QuickBooks. Or get this list of leads uploaded into Salesforce. Various things like that. And Brian had this insight, he was like, you know, they're paying us a lot of money to do this type of work. What if we built kind of a plug and play out of the box tool that allowed non-engineers to set this stuff up, using, you know, the various APIs that existed. And so that was kind of the original idea. And so we ended up taking kind of that nugget of a thought to a startup weekend and teaming up with Mike. Built out like the original prototype, and it seemed to go pretty well, so we were like okay, let's give this thing a go. And for like the next basically, I don't know, six to nine months, we worked like nights and weekends on Zapier, just trying to get like a prototype and a beta working. So kept our day jobs, Mike stayed in school, and it was really just trying to like, make something happen with what spare time we had.
So what is Startup Weekend, exactly? Is that a hackathon or something like that?
It's basically a hackathon, you know, 50-something hours or whatever, Friday night to Sunday night. You bring an idea and you build something, more or less.
How did you come up with the idea that, or how did you know that non-engineers wanted to hook stuff up like this? Because it's very possible that you could build it and nobody would care about it. I mean, were you guys certain at that point that it was a problem that lots of people had? Or were you kind of just thinking, this would be cool, let's see what happens?
We were fairly certain that it was a problem that some people had. I don't know that we knew that lots of people had it, but we knew that it was something some had. Because if you went to the various apps, they, a lot of times folks have forums where their customers talk about this stuff. So at the time I remember being on the Highrise forums and they were asking for a Google contacts integration. And there were like 400 comments on it where there was no Google contacts integration. And then it, you know, you do the same thing on like the Evernote forums, or the Dropbox forums, or the Salesforce forums. Where people would be asking for these variety of integrations, and just looking at the comment history, like a lot of the threads were like fairly dated, you know, and then there was just comments that kind of trickled in over, you know, months and sometimes even years, of people requesting this stuff. So to us, that was validation that, you know, if we could build a tool that allowed people to set up integrations between this stuff, certainly it would solve problems for folks.
Did you ever think in the beginning that this was something that people would pay money for? Or did you think it was, you know, a cool project that people would just use?
We were pretty sure that people would pay money for it. We didn't know like how much or anything like that. But at its premise it kinda makes sense, right, companies have a lot of money, that don't have a lot of time, so if you can automate something for them, you know, they're willing to pay some money for that. You know, if you can save an engineering resource, like engineers cost a lot of money, so, it made sense to us that it would be worth some amount of money for this to exist.
Yeah, and the reason I'm asking you all these questions about like how you came up with the idea is because a lot of people get stuck in this loop at that phase, where they're really excited to go work on something. And they're really motivated, and maybe they've learned to code, or maybe they already knew how to code. But they just don't know what idea to work on. And they kinda fall into two buckets. One is people who have a ton of ideas, and they're not sure which one's the best, or how to think about, okay, which one should I pursue? And some people think, you know, I don't have any ideas. I don't have any problems worth solving. Do you have any sort of philosophy about how to come up with ideas, and did you guys consider ideas besides Zapier?
Zapier was really the only one that we seriously considered, we had a few different things. We were kinda, we'd used a lot of SaaS apps, like in our day-to-day job, and honestly, like this observation just came from, like, hanging around in the forums. Like, the forums of these SaaS apps are just, it's just literally customer feature requests. Like nonstop, you know, each one is just like, I wish your app did this, or I wish your app did that. Or I wish this existed, or I wish that existed. So it literally is customers telling you, if you build these things, I will want to use them, right? So from an idea generation standpoint, like just, you know, hanging out in forums where other products exist is like a pretty good way to find ideas for stuff that, if you're looking for something to build, you might find something there.
Yeah, I've never heard anyone give that advice before, but it's really good advice, because like you said, people are constantly airing their problems. And they're usually doing in like a business environment, where they have some problem that their business needs to solve, which means it's likely that they'll pay for it. Because their business will make more money, or save more time as a result of it.
Well exactly, they're already paying for those tools, too, right? So it's like, they've already demonstrated, you know, I'm gonna pay for stuff, I just want these features to exist and I'll pay more.
Yeah, so if you're listening and you are trying to come up with an idea, spend some time in some customer support forums for some other software, ideally business software that people pay for. And see if you can find some insights and some problems there. And people are probably going to talk about their problems, right, they're not going to suggest a solution. There's nobody in the forum who said, I want, you know, you guys to build, I want MailChimp to build Zapier, alright, they just said, I want MailChimp to connect with X, and then you guys had to do the extra reach of figuring out, okay, here's what the ideal solution to that problem looks like for anybody.
Another cool thing about Zapier that is not necessarily the most common thing among the people that I talked to is that you people have three co-founders. It's you, and if I'm not wrong, you were, in the beginning, at least, kind of the marketing guy. And then your two co-founders are developers. How did you guys meet early on, and what was that dynamic like, working with your co-founders?
Brian and I met playing music. So he's a bass and guitar player and I was a saxophone player, so we played in like a blues and jazz quartet around town. And we both kind of worked on various things, you know, started doing work together basically as an evolution of being in that music quartet. So you know, he would do a lot more of the harder technical work and then I would, you know, help out on some of the technical side and do a lot of the marketing, client sales-type stuff, support-type stuff. And Brian had met Mike I think through like Hacker News, of all things. And there was like somebody did a Show HN that was, you know, put your zip code, and they were like the only two people in Columbia, Missouri. So they met that way, I think. And you know, Brian introduced Mike and I, and we all just kinda hit it off pretty well. Like Brian and I had known each other for a long time, and Brian had known Mike for a while, and so, you know, we kinda had similar backgrounds, similar values, similar approaches to work. So it was pretty easy for us to collaborate. And we all had complementary skills, which made it even better to actually start something together.
Did you say that you played the sax, or did Brian play the sax?
I play the sax, so Brian's bass guitar.
Oh, which one?
Mostly tenor, but I play all of 'em.
Cool, I grew up playing the alto sax.
I was pretty good as a kid, in fact I, I kinda wanted to get into jazz, but like not the good jazz, I idolized Kenny G. When I was like 10 years old. And at some point I was like, I either wanna be Bill Gates or be Kenny G, those were my role models. And fortunately, I chose the technical coding path. But that's funny to hear.
Yeah, it seems like there's a lot of, you know, jazz musicians in the tech world. I don't know why that it is, but you know, just seems to shake out that way.
Yeah, well maybe there's some sort of theory we could extract here about how playing jazz and improvising leads to people being creative thinkers and being independently motivated to start business, I don't know. It's kind of a stretch.
I don't know, narrative fits to me, so it must be true.
That must be true, if you're listening, take up jazz music, please. So the other cool thing is that you guys were working on this on the side of your full time jobs. Zapier wasn't like some huge success that immediately made you guys enough money to quite your full time jobs. And a lot of people in this position find it really difficult to find the time to, you know, come home after work and put in the hours needed to build a business up on the side. How did you manage this work life balance-type thing where you had to work a job and actually build and grow Zapier?
There really wasn't much balance, to be honest. But I was at a time of my life where that wasn't super necessary. So I had just gotten married, and my wife was a first year teacher. And if you know anything about, you know, first year teachers, they work crazy hours. So like, she would be up grading until like, you know, 10 or 11 PM every night, and then out the door in the morning before seven AM. So she was working a ton, too. I actually started working a lot because like, I needed something to do, you know. 'Cause she was doing stuff, so that's really where I started digging in, and like, just getting excited about working on side projects and doing stuff on the side. And so when we started Zapier it really wasn't a big deal to just work a ton after work. But it was working on stuff that I was maybe more excited about than, you know, what was happening on day job. So it wasn't like I had school or, you know, kids, or anything like that that required that sort of balance. It was at a time of my life that was a good period where I had that opportunity.
Would you say the same is true of your co-founders, too? Did they...
Yeah, definitely, they were both in a similar situation as well, where putting those types of hours and working on this stuff on the side just, you know, it was fun. It was like a hobby for us. And we didn't necessarily have other commitments that prevented us from doing that.
Okay, so the three of you guys are working. You're trying to build this product up from scratch. You've launched it from a hackathon and basically a couple days of work and a few more weeks of work after that. What is your job early on with the company as the marketing guy?
So I was doing a lot of, trying to drive up beta customers, more or less. And building a lot of landing pages out. So like our Zapbook was partially built by me. And then I basically, you know, I mentioned those forums earlier where folks were talking about integrations. I would actually start commenting in those forums. I would say things like, you know, that Highrise Google context thread, I'd say like, hey you could build something through the APIs. Here's the links to their API docs. But if you're wanting something a little more out of the box, I'm working on a project where I might be able to solve this. You know, go to this link and give me your contact information, I'll get in touch. And so I would just do that, like, a ton, honestly. Get kind of tired of trolling through forums, but that's what it took, and you know, I remember putting those links in, and any given comment would drive maybe like, I don't know, 10 visitors over the lifetime of the comment to Zapier. But of the 10 visitors, like 5 of them would be like, "I wanna be a beta customer right now." Which at the time, that's exactly what we needed. We didn't need, you know, millions of users. We really just needed like a couple folks to give us a shot, right? And so that worked out really really well in the early days.
It's cool that people reacted so well to you coming into these forums and promoting your product, because effectively it's, a lot of people will go onto Hacker News or into a Facebook group or on Reddit and promote their product, and then just get flamed out of the room, because it's like, hey, we've got our own culture here. You know, like you're violating, you're just self-promoting yourself, but on like company support forums, there really isn't much culture. It's just people who go there and they don't hang out there all day, they just go there to solve a specific problem. And so you came in and said hey, we've got this perfect solution to your problem, try this. And people reacted really well to it, it sounds like.
Yeah, and well I think part of it is to just understand. Like if you know that self-promotion is a thing, like, you should probably be tactful about how you, you know, approach those comments. So for me it was always, I always tried to promote the APIs first, and say like, hey look, if you are a developer, you can use the APIs, you can get this done. But if you are looking for something out of the box, I'm working on something, you know, check it out, right? Like, I wasn't trying to be like, overly salesly, or say like, the thing I had was the best solution, or even, you know, the preferred solution. It was just, I got a project I'm working on. If you wanna talk, let's talk, if not, that's cool, there's these APIs was the other way to do it. So it was very just like, casual, you know, comments, and not, you know, hard selling.
The other cool thing about you going onto these forums and finding your first customers, or your beta customers, is that it fits so perfectly into this narrative that I see time and time again of companies getting their start by doing things that don't scale. Which, as you know, Paul Graham is really big on. And he should be, because it's totally true. For Indie Hackers I had to send out a ton of emails to get my initial interviewees, and I don't do that anymore, but I had to do it to get it off the ground. And with you guys, like I'm sure you're not spending your day-to-day now, you know, on customer support forums, asking people to use your product. But like you said, it's kind of advantageous to be small. Because in those early days, you don't need to get a million users in the door, you just need to get five or 10 or 100 people, and you can get that number of people for any product that you build purely through brute forcing it and being willing to actually have these one-on-one conversations with individual customers on support forums, or on Twitter, or wherever you can find them.
Exactly, you just learn so much from going through that exercise, you learn, you get such a good qualitative feedback. 'Cause you understand the nuances every step of the way. And so you can figure out, like, what is the actual appropriate way to scale this up by doing this, you know, basically manual work the entire process?
Yeah, it's like you're validating your idea by talking to all these people, while also getting them onto your platform. Were there any conversations that you had with customers early on that led you guys to realize that you were making, you know, some sort of mistake, that, you know, helped you kind of course correct?
I remember, you know, my very first, so our very first customer happened to be Andrew Warner of Mixergy. It was from a cold email to him, just, I found him actually commenting on a forum, saying like, I want a PayPal High Rise integration or something like that. And so I emailed him and said, hey, by chance, did you find this? If not, you know, again, I'm working on a project, would you be interested in chatting? He was like, I didn't find it, I would be interested. So we built out what he needed like that night, and then sent him an email and said like, here you go, check it out. And, Andrew is like the nicest guy ever. And so he emails back, and he's like, hey Wade, you know, this looks cool, I'm really excited about using it. Do you mind if you jump on Skype real quick and show me how to use this? So, like, it was so bad. Like, he wanted it to work, but the app was, at that time, was just so bad that he couldn't even figure out like what he was doing. And I remember like, you know, watching him try and use it, and then me looking at the same time, being like, yeah, this is bad, like, you know. He, like, the fact that he's even going through this, like, process with me, just shows how much he really wants this. I remember like you had to, there was this spot, we were setting up a Wufoo AWeber integration. And to set that up, you have to pick, like, which Wufoo form do you want this to work with? And in the dropdown, it showed the IDs of the Wufoo form and not the names of the Wufoo form. So like he didn't even know which Wufoo form that he was picking. It's all like I had to show him like how to figure all this out and stuff, it was just like really silly. And so I think, you know, going through those calls with our, I did that for probably like our first, I don't even know how many it was, it was like several dozen customers, and every time, I would just like jot down the things that, you know, didn't work for them, basically. And then I would sit down and show the videos to Brian and Mike and say like, hey, here's the spots on the product that are confusing people. You know, we gotta find better UX for this stuff. And so, rinse, wash and repeat. Like we just kept doing that over and over again. Until eventually, less people said, hey, can you get on a call and show me how to use this? And instead it was like, looks great, we love it.
Nice. It's like one of the important lessons here, is that you're getting so much feedback through these back and forth interactions with customers from super early on. And I hear, one of the most common stories that I hear is people who spent the last six months or 12 months of their life working on some project in total isolation. Without talking to a single customer, trying to get anybody to use it. Because they're embarrassed, and they're like, it's not ready yet, it needs to get to its final form before I show it to anybody. And then when they do show it to people, it has all of these problems and nobody wants to use it, and they realize, you know, retroactively, like way too late, like hey, I probably should have been showing this to people from day one. So that they can like...
And if you're working on a problem that people really care to get solved, they won't care that it's bad. Like they don't care that it's crappy. They'll just tell you, they'll say like, hey I can't use this, do you think you could add like this feature, do you think you can make this more confusing? Like they'll work with you on it if it's that big of a problem for you. So you shouldn't feel embarrassed to share that stuff, because people want the problem solved, so they'll tell you, like, hey, I need this. And it's really helpful, 'cause then you can be like, oh, okay, I'll fix that.
Yeah, that's perfect, it's like a, someone was just asking me the other day, like, how do I know what features to build next? You know, I've got my minimum viable product out. What do I build next? And it's like, if you truly built a minimum viable product that's like the bare minimum that customers can get away with, then just talk to your customers and they'll tell you for sure what you need to build next for them to use it. And speaking of customers, you mentioned that you were signing up beta customers, not beta users. And I know from reading through your past interviews that you guys actually made people pay for your beta. Why did you do that?
Well, you asked me earlier, you know, did you know that people would pay for this stuff? And you know, I said, we thought they would, and you know, a paid beta was our way of proving they'll pay something, right? You know, you read some comments about this where it's like, you know, pulling a credit card out is like one of the toughest things. And so we didn't ask for a lot of money, we made, our beta was a one-time fee, it wasn't a subscription. So we just said, pay for our beta. You know, eventually this is gonna turn into a subscription at some point in time. But for now, you'll have access to it while we're in, kind of, you know, beta building, you know, more or less. And I think the very first folks we charged like 100 bucks to, and you know, it was like alright, that proved it. And then after that we just changed it to like, I forget, it was like five or 10 bucks. And, just as a way to get more folks in the door. But we wanted to be talking to people who were gonna be willing to pay, we wanted to weed out, like, the tire-kickers. We wanted the folks who, in that qualitative feedback, we knew were gonna pony up the cash, right? Those were the problems we wanted to listen to, not to, you know, tire-kickers who were just like curious because the tech is cool or the product is cool.
Yeah, and those people are gonna probably give you the worst advice because they're not actually serious about using your product. So ultimately if you optimize your product based on the advice of free users, you're going to build a product that's good for free users and that's bad for, you know, the paying customers who actually want to get into the door.
Exactly, they'll tell you to chase features that are not relevant to solving a business problem. They'll just be nice cool things that exist. Whereas, you know, your business customers, they'll tell you, like, this is the stuff that matters for my business.
Exactly. So okay, you're in this early stage, posting on these forums, you're getting your first beta users. What was the next step in the process? Like when did you guys move to the next level and say okay, we've really got a real business here and our beta's really taking off?
So I think, you know, by the end of, you know, after I had done like those dozen plus Skype calls or whatever, we got to a point where we had several hundred folks into the beta. We talked to like tons of folks, and we'd improved the UI and UX such that we didn't have to like manually onboard people anymore. People could self-serve, figure out like how to use the thing. And so that was a good signal to us that it's time to launch. And so about that same time was when we'd applied and gotten into YC. And I remember our very first office hours we were telling them this, and they were like, well why don't you just launch? Like, it sounds like you're ready. And so literally that week, we launched Zapier publicly. So you know, we opened it up, you know, we had an email list I think at that point in time of several thousand folks, I think it was about 10,000 folks. So we emailed all of them and said like hey, you can sign up now, check it out, right? And that was kind of our transition from like this private beta, you know, side project thing, to like, okay, this is gonna be like a real product, a real business, let's make this go.
How was the Y Combinator experience for you, by the way? For people listening, Wade and I both went through Y Combinator together. Well not together, I did it in winter 2011. I think you guys were 2012.
Yeah, we went through summer 2012. And for us, the thing that was most critical I think, you know, we were a side project, right? You know, granted, a very committed side project. But a side project nonetheless, so you know, I'd gone full time I think by the time we'd gone through the YC interview process. And Mike mostly had. And Brian I think was still employed as well. So for us though, YC was just like this ability, it gave this incredible ability to focus on Zapier as the only thing. So we moved away from Missouri, away form friends, family, and so for an entire summer it was like, the three of us just holed up in an apartment. 100% focused on Zapier. Like we didn't do much else other than work on Zapier. And so that amount of focus allowed us to make incredible strides in a three month period.
Yeah, I felt the exact same way going through it. I mean, you're surrounded by a whole bunch of other people who are also intensely focused and pretty much talk about nothing besides their companies and how they're gonna grow them. And then you're, especially if you move from out of town just to be there for Y Combinator, you don't have much else to do besides work on your business. And so you get an amazing amount of work done. And it's sometimes hard to sustain that after Y Combinator. You know, when you move out or you know, things kind of quiet down, I see a lot of business that go through YC and slow down tremendously after ending it. But on that note, I'm curious what your thoughts are on work life balance. Because, like you said, your wife is a first year teacher so you were working all the time. You go to YC, you do this three month stint of just hardcore work. Were you ever worried about burning out? And also, nowadays, you guys have a really big business, how does your work life balance get affected by being such a big company, and do you feel like you've created a lifestyle that you could sustain for years to come?
So yes, I think, I've definitely changed the work life balance bits of it. And it was something we had to improve on, like when we, you know, I think around, post-YC, for like a year or so, was kind of tough, because, from a work life balance standpoint, because we were growing a lot. We're adding a lot of customers. But we still didn't have, like, a very big team. You know, we were still less than 10 people. So the weight of the entire company was still more or less on our shoulders, and so that meant working a lot. Like, customer support tickets don't answer themselves. Code doesn't write itself. So you have to be doing that stuff, otherwise, you know, the business doesn't move forward. So that was kind of tough, right, like I had to figure out like ways to get things done where I could still have time off. And so I think the agreement at the time that I made with my wife was like okay, I'm not gonna work on Saturdays at all, right? But like, there's still gonna be some longer hours. But then over time, as we were able to staff up the team a little bit more, there was always this goal to like build a much better work life balance into the company. And so nowadays, like, you know, we have a good support team, we have a good marketing team, we have a good engineering team, good product team. And so the weight of the world isn't on any one individual to do this. And so all of us can put in a good 40 hours a week. We can go home at the end of the day, see our kids, see our families, have hobbies and things outside of work. Because at the end of the day, you know, the business is, it really is a marathon, not a sprint. And so if you don't pace yourself, you will find yourself burning out, basically. And so you gotta eventually find that balance, I think. Otherwise, something's gotta give.
Yeah, I'm like the, like textbook poster child of what you should not do. I just constantly burn myself out all the time, I'm like, ah, I gotta get there as fast as I possibly can, I gotta get there as fast as I can. And I just work crazy hours and never learn my lesson. And then I get burned out and have like two super unproductive weeks every time I get burned out. On that note, a cool thing about how you guys operate Zapier is that you're a totally remote company. Or at least at the beginning you guys were. Are you guys still completely remote?
We're 100% remote still to this day.
How did you decide to go that route? 'Cause I know like at the time, it wasn't nearly as common as it is now, and it's still really not all that common. People, most companies operate you know, in the same locale. What influenced you guys to become a remote company?
So there was a few companies doing it, you know. I think Basecamp, 37Signals was the most public about it. But also Automattic, GitHub, Reddit, like there was quite a few that were doing it. And since Zapier was a side project, we were used to working like just wherever we were and not being in the same room. YC was kind of a departure from the norm for us a little bit in that we were all in the same place. But then post-YC, Mike moved back to Missouri to be with his then-girlfriend, now wife, 'cause she was finishing up law school. And so we were like, you know, you're not gonna kick the guy out of the company just to, you know, be with the girl he loves. So we've just figured out, let's make a way to, remote to work. And so, and also when we went to go hire folks, we didn't know anyone in the Bay Area. We didn't have a network built up, we didn't know anything about hiring. The advice we'd heard from, around hiring your first folks was to just hire folks you've worked with in the past. And so, you know, I had an old college roommate that lived in Chicago who was running a Cubs forum. And I figured if he could deal with unruly Cubs fans, he could probably do customer service for us. I had an old co-worker who was an engineer that I worked alongside, we knew he was really solid. So he was in Columbia, Missouri, so you know, we were just like finding these people we knew who were talented, and it didn't matter to us where they were because, you know, we'd already set up kinda some systems and processes to make remote work. And that's kind of what set us down that path.
Now that you guys are a profitable business, you know, unlike most of the people that I talk to, you guys have raised money, you went through YC, you had, did you guys raise a seed round or an A round?
We did a seed round, yep.
Seed round, and you never raised after that, did you?
What are the dynamics of that kind of relationship with investors, where you almost immediately go for profitability, rather than, you know, continuing to raise additional rounds of funding? Because a lot of people listening are leaning towards the bootstrapper lifestyle, maybe they don't want to talk to investors, maybe they don't have time to do it. What are the advantages and disadvantages that you see of being a profitable company that's also raised money?
Good question, so you know, for us, we were, we pulled in a million dollars in our seed round, and this was post-YC, and the reason we did it, like you know, our mentality is mostly to, you know, build profitable businesses, that's always kind of been our, like, the thing that we value. But we realized, you know, we've got a lot of work on our hands, so a little bit of cash would really help us out a bit. You know, just to get things kick started. So having the money to pay for like, two or three employees, you know, someone on support, someone on engineering, to help us just kick start things just a little bit faster, and afford to like, live in Silicon Valley, that was basically all we felt we needed. And so, that's what we did. And then the way we approached hiring and spending money was we had this philosophy that at the time we used, which was, don't hire until it hurts. So unless we knew we needed somebody, we weren't gonna bring somebody else on. And that helped us kind of slowly add folks to the team as we grew, and forced us to really be intentional about the types of folks we brought on. With the side note that the primary way you spend money in a company is hiring people. I mean you might do marketing, but really salaries is what's the most expensive, for those of you who are listening. That's really what kinda kept our spending in check. You know, over time we did add like quite a few folks. You know, we went from three people to seven to 14 to 30 to 70, right? So it ended up being actually like a pretty good increase in headcount, but that rule of thumb always made sure that when we were hiring folks, it was when it hurt, and when there was money and revenue coming into the company. So we weren't spending VC money, we were spending our own revenues and profits.
It's funny that you mentioned being able to afford living in the Bay Area. 'Cause it's so ridiculously expensive here. I talk to a lot of people on Indie Hackers, and a lot of the bootstrappers just aren't in the Bay Area. They're in Boise, Idaho, they're in Pennsylvania, they're in New Hampshire. And I talked to Patrick McKenzie about it a few weeks ago and his theory is, it's pretty straightforward, if you're going to go the boostrapping lifestyle, you can't afford to live in a tech hub where programmers are making $200,000 a year, you know, and rent is crazy. And on that note, I also wanted to ask about, you know, the pressure that a lot of people theorize comes from investors, to drive your company out of profitability mindset and into like a pure growth mindset. Do you feel like your investors are pressuring you to do that in any way? And you know, are they happy with your decision to become just a profitable company? Do you pay them a dividend or something? Are they looking for like, you know, an IPO?
So another good question. So Zapier's investors are, the board for Zapier is still Brian, Mike, and I. So at the end of the day, we still control our destiny, can make the decisions that we think are best for the company. And you know, early on we did get times like, you know, are there ways that you feel like you can fuel more growth? Do you think you can grow faster? And the thing we always went back and asked ourselves, 'cause we wanna grow too, right, we wanna have a, make more money, and, you know, have more impact. Like just because you're, you know, VC or bootstrap doesn't mean, growth is part of both of those types of businesses, right, it's not exclusive to one type of business. And so we would go back and ask ourselves and say like, well what would we spend more money? And we always felt like the money we were spending was what we would, wanted to spend. We never felt like we wanted to spend more money. We felt if we spent more money, we couldn't control it. Like you know, if we hired more people, it would disrupt the culture in a way that we couldn't control. So we always were like very measured about when we spent money, to make sure that it was like at a cadence and a pace that the business could support. And not artificially doing it because that was what, you know, some VC thought was the smart thing to do. And so like that was our approach to it. And it worked out pretty well for us.
Yeah, it sounds like it's worked out excellently. And we haven't really talked about revenue numbers or anything and I'm not sure, you know, what you feel comfortable sharing, but just for some context, can you talk about how successful, I guess, Zapier is today?
Sure, so you know, we announced a few months ago, Zapier's passed 20 million in annual recurring revenue. You know, that's taken us almost six years to get there.
Congratulations man, that's huge.
And how big is your team?
We're about 90 people today.
Whoa, that's awesome.
I had no idea you guys were so big.
Yeah, it's definitely grown up a little bit since those three people in an apartment during YC.
Yeah, for sure. So you guys have raised a seed round. Let's go back in time a little bit. You've raised your seed round. You're now spending your money hiring people rather than spending it on just like marketing and ads. How did you grow at that point? Was it just all word of mouth, magical growth? Or were you guys implementing specific growth strategies, marketing strategies, to get the word out about Zapier?
The biggest thing we focused on was getting more apps onto Zapier. Because that was kind of the factor in terms of who could use our product. The product is used by people who are using other apps. So if we had an integration for an app, that opened up a new potential market for us. So every new app we added to Zapier meant we could do co-marketing, and, you know, trade email campaigns, and you know, spin up landing pages, and do all these sorts of things to promote to a new set of folks. So we invested heavily in our developer platform to try and onboard as many apps as we possibly could. Because every new app meant more potential customers for us.
That's awesome, so just by building your product and making it better by adding these integrations, you guys have a side effect of every new integration was an opportunity to promote Zapier and promote the integration and work with the partner in doing that.
Exactly, and it really played to our strengths early on, because we were a technical heavy founding team. So you know, building those integrations was a lot more natural to us than doing, you know, sales outreach or something.
Yeah, I was gonna say, a lot of people listening are developers, and I know that when I was working on my old app, Taskforce, like my dream was that I would just be able to sit down and code and that, you know, the primary driving of my actual user acquisition and marketing would be writing code. And for so many businesses, like, with Indie Hackers, it's literally the exact opposite, every day I write code, is a day that I'm not getting the word out about Indie Hackers. And for a lot businesses that's the case. There's a lot in there about how you work with partners and how you promote, a lot of specifics that I think would be really cool to go into. You mentioned that you were doing co-promotion with the partners, you mentioned that you were setting up landing pages, which I assume give you some SEO benefits. Can you talk about how exactly you promoted Zapier with these new partners you were bringing onto the platform, and also how that strategy evolved over time? 'Cause I assume you guys got better at it as you...
Absolutely, like we have a whole playbook on it now, where every new partner, like we give 'em this checklist that's like a menu of things to work through. Like we know which ones work best, which ones like are fine, but you know, honestly won't do much. So it's really gotten pretty good. Early on, it was literally just like trying the things that we'd seen others do. So it was like, hey, can you put us in your app directory? Because most apps had an app directory. And then from there it was like, well hey, you know, can you send an email out that announces the integration, right? Because if you send an email out that Zapier is now on, you know, X app, that was, you know, an announcement that this existed. So those were some of the early things we did. Over time, we've gotten more sophisticated about it. Like we started saying like hey, why don't you talk about integrations as part of your onboarding email flow, and Zapier can be a part of that? Why don't we include, you know, how to, tutorials on how to do this as part of your help docs? You know, and just really try and, you know, expand the surface area of, you know, Zapier inside of these partner apps so that it made it a lot more easier to get awareness of Zapier if you were using those products.
So it sounds like earlier on, you guys were just trying everything. Throwing spaghetti at the wall, which makes a lot of sense, 'cause you don't know exactly what's gonna work early on. You haven't tried it. When you did kind of solidify your playbook and improve it, was it based on things that you tried early on that were just, that worked the best and you just dropped the things that didn't work? Or was it..
Yes, so like we knew that, the way to think about it is try to get your name in the principle path that a user is going to be following, right? So if you think about how people use web apps, well they sign up for it, they get a sequence of emails, and then they interact inside the app most of the day. So it's like, well, can we get Zapier as part of the onboarding flow somewhere? 'Cause that's gonna be somewhere that every single user sees. That was like, for us, like the best place to be, versus, you know, it's great to have a blog post about us. That's great, but blog posts get buried, they roll off the feed and disappear over time. So you know, it was, those types of learnings were things we had to figure out as we went along.
Was there any particular marketing channel or promotion type that worked way better than the rest?
I mean email is great, honestly. What's better than being in like the inbox, saying like, here's the thing that exists, you directly get outreach to somebody. So email is great, search is great. Yeah, really just those, and then word of mouth. Having a great product that people wanna talk about. Once you kinda get to a certain critical mass of folks, like that word of mouth should really start kicking in. From people talking about ya.
Yeah, email is consistently underrated as a marketing channel by a lot of new developers and entrepreneurs and founders.
Oh yeah, I mean email is just like, like there's, everyone talks about, you know, social media, Twitter, Facebook, you know, Reddit, Hacker News, things like that, they're great, but those are all spiky, right? You know, it's like if something cool happens, you might get a lot of traffic, but then it disappears over time. If you're collecting emails, like that's a chance for you to like get in front of people again and again and again.
So what's your email strategy like at Zapier? You mentioned having your partners, kind of encouraging them to promote Zapier to their email lists. Do you guys also sign people up for your own email lists? And if so, what kinds of emails do you send to people?
Well for us, our email is really a chance to make Zapier kind of a thing you daily interact with. So Zapier, our product, is somewhat invisible, right? You set up these apps and they work, and you may never have to go to zapier.com again. So the way we treat Zapier, our email list, is our blog, our learn resources, writing about work, helping people do better work, and try and get people interacting with Zapier on a daily or weekly basis through our content initiatives so that when you do think about, hey I need to automate some stuff, like, Zapier can be top of mind.
Another area where you guys I think did a really great job was with kind of search engine optimization. You would put up these landing pages for every single integration that you did. And I'm sure that was painstaking work at least in the beginning, like maybe you guys have automated that whole process now. But can you talk about how your search engine optimization worked exactly, and what kinds of things you were thinking about?
Yeah, I mean it's fairly simple, right? You know, have a landing page for every integration you support. On a single individual integration, there's not much traffic to it because there's just not that many looking for it. But again, as we added more and more apps, that just meant, you know, N plus one more opportunities for landing pages. And that search volume adds up over time. So it's just a really tail play of getting as many apps on Zapier so that we can have more landing pages targeting more types of use cases. And so we would just spin 'em up as we went along. And it's fairly automated nowadays. And all those are opportunities again to get new customers.
Yeah, for sure. I think, like, it's cool listening to your story because you have so many different natural advantages with Zapier that you like really took advantage of and hit really hard to help grow the application, besides just building Zapier itself, right? You've got the integrations, which seem to be the backbone of everything that you do. And then you've got things that are a little bit less, you know, naturally arising out of your product. Like your blog, which, I'm aware your blog gets a ridiculous amount of traffic, more than Indie Hackers does by far, I think. How did you set up your blog, and what strategies do you use?
To promote it?
Well, our blog was not great in the early days. You can actually, you know, scroll to the very end of it, and you can see it's me like writing about basically like our founding journey. I think a lot of blogs start out like that. It's like you writing meta commentary about your company. Which is fine, but eventually you probably are gonna need to start having more of a strategy about how your blog aligns with what your customers care about. And oftentimes what your customers care about isn't necessarily your company journey. They care about something unique to them, right? And so, I think at some point in time I'd heard that, you know, Twilio had this strategy, which was like, make your customers your heroes. And you know, their content strategy was basically just like case study after case study of like cool things that people were building. And oh, by the way, Twilio was part of what they built, right? And so that's kind of where we started to move towards. And eventually we stumbled on like this intersection of productivity and app-specific content, where, you know, there's a lot of generic productivity advice, like wake up early in the morning, or whatever, right? But we didn't feel like people want more of that type of content. Like that content exists in spades. What people really wanted was like, deep, tactical-level stuff, like here's how to use Trello and Gmail to like craft an amazing hiring process. And like, here's exactly how to set up your Trello board, and like the filters you need in Gmail, and everything, right? Like that kind of stuff is gold, because now you can literally just be like, okay, I'm gonna follow these steps one to 10 and I have a great hiring process set up, right? So that was the type of content we wanted to push for was, how can we talk about this intersection of productivity and apps and get people excited about stuff? So that's the angle we took, so you'll see, when you go visit our blog, like there is very little fluff, just, you know, puff pieces. Almost everything has like very specific types of things a person can do to improve what they do at work.
Yeah, that's really smart. I mean you're actually producing good quality content. High quality content that people can't find elsewhere, and so if they wanna read it they have to come to your blog. And then they're gonna like it because it's not just fluff. But on top of that, there's kinda like two aspects of it, right? You have to write good content and you have to figure out a way to get it into the hands of people who are going to read it. And that can involve things like search engine optimization, sending it out to your list on email, promoting it on social media. What have you found to be the most successful ways to promote the content on your blog, and how did you kinda get that ball rolling in the early days?
Email, email is like again where it's at. So like once you get that list up, you know, just work on getting people who read your article the first time and say like hey, if you want more of this, stuff like this, like, we'll let you know when a new article's coming out, right? Get their email address, and then every time we send that email, those people would, or we'd post a new post, we'd email 'em, they'd come back and read it. And then a lot of times that audience of people that were reading it, those would be the folks that helped push it out even further, right? So those would be the folks that would submit the articles they liked to Hacker News, or they would set up, they would tweet about it or share it on Facebook, or share it on LinkedIn, or wherever. So you would, really the email strategy was a way to get our own users to try and make the content go a little further. And some, stuff viral, right? Eventually you do get a few that will exceed where the baseline is. So for us it was always just, get out more emails to increase the baseline of what content is, and then over time, we'll just get more hits out of it, too.
Yeah, I'm looking at your blog right now. And it's like, you've got this very non-obnoxious little popup in the very bottom right corner of the screen, it's like, join 50,000 plus subscribers and get app tips, et cetera, and put in your email address. And I think it's really cool to have, give us your email and get more content like as kind of your primary call to action on your blog posts. 'Cause it feeds directly into what you were saying, like it's your best strategy is to hit people up over email, so you know, maybe focus on that more so than focusing on trying to immediately convert them into Zapier users.
Yep, yep, totally.
And we're kinda running out of time, but there's one thing that I think I mentioned at the beginning that I really wanted to talk about, which is that in my view there's kind of two spectrums that a company can follow. You could be like ConvertKit, for example, where you're entering a crowded marketplace full of a whole bunch of companies that are very similar to you and you have to figure out how to differentiate yourself. But people already know what you are, and they're already searching for you. And then at the other end of the spectrum you've got things like Zapier, where, you know, when you started this company, there was nothing that was really like Zapier. And anything that was like Zapier wasn't really that popular, and so there wasn't a whole, you know, there weren't a whole bunch of people searching for, you know, Zapier or workflow automation, you know. Or maybe there have, or maybe there were, and I'm not sure about it, but the question here is, when you're developing an app like Zapier, how do you communicate to customers and educate them and let them know what it is that you're building? And how do you kind of drum up demand for something that's totally new that doesn't have like a whole bunch of search traffic on Google?
Yeah, I think you gotta figure out, what is the problem that your app is solving? And that way you can tilt your marketing more towards what I call demand harvesting, rather than demanding generation. 'Cause you want to be more like, you know, the ConvertKit example, right, where you can tap into existing marketing channels where there's known problems and sell that way. Because it's gonna be just a lot easier to get your message out there. Versus if you're trying to create an entire new category from scratch that's incredibly expensive, no one's searching for it, it's really hard to do that. So as best as you possibly can, try and get yourself into kind of those normal channels. So for us, the way we approached it was, well Zapier the tool is new and novel, the things we're solving are actually still fairly mundane, or you know, something that already exists, which is integrations. So people were already looking for integrations. You know, MailChimp had an integration directory, Salesforce had the app exchange, Basecamp has their add-ons page. All that stuff already existed. So it's like, how can we just tap into that stuff that already exists to get new customers and just harvest the nascent demand that already exists today? So really that was it from the get-go was like, just tap into existing channels, don't try and reinvent the wheel or create a new category or anything like that from the get-go.
I love that answer, because even if you're building a tool like Zapier, which is totally new and can't be easily compared to existing tools on the market, you're still solving a problem, or hopefully you're solving a problem, you really should be. Solving a problem that already exists that people are already looking for solutions for. So if you come at it from that angle, you don't have to say, oh, my product is so new and unique, I have to drum up demand from scratch. Instead, you could ride the existing wave of traffic from people who are looking for solutions to the problem that it is that your new product solves. And you can use that to get your first users and grow from there. I think that's a great place to end the interview. Can you let us know where people can go to find out more about yourself, your co-founders, and Zapier?
Yeah, absolutely, so I hang out on Twitter fairly often, @wadefoster. If you wanna learn more about Zapier, zapier.com with just one P. The about page has some cool photos of our retreats in the past, check it out, where everyone's remote. We got job listings if you're curious about coming to work at Zapier or anything like that. The blog is also a really great resource too, if you're looking for various apps to use and trying to think about the workflows you run in your own business, so I'd definitely check that out too.
Alright, well thanks so much for coming on the show, Wade.
Awesome, thanks for having me, Courtland.
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