How to Find the Perfect Market-Fit for Your Product (with Michael Litt)

All right, today we're going to talk about Michael, and then—

We're going to talk about Eric.

OK. Mike was on last year, and his team reached out again. We're like, we should do an update podcast. So Mike is from Vidyard, right?

Yes.

And like, so give us some updates. What's going on with the company now?

Yeah, that's a great question.

Maybe like a re-summary again on what we do.

Re-summary of what we do. So our mission is to help organizations succeed with video, which is pretty broad. And companies use our platform and our tools to both create content, and share content. It's all video-based. And so what we have is one of the easiest ways of creating a screen recording or webcam recording, and then sending that to your audience via email or embedding that on a web page. We also have a suite of tools that allow you to upload video, automatically transcribe that video so it's more available via search. You can put videos behind SSO hubs for internal communication. We can personalize video for mass email campaigns. You name it with video, We do it.

There you have it. Well, also, I mean, the other day a guy sent me a Vidyard video.

Yes.

I asked him a question, he just made a video for me, and then he was straight— like, I felt more connected to the guy, right?

Yeah.

And that tool is actually free, correct?

Yes.

What is it called?

That tool is called Vidyard.

Just—

It was called GoVideo.

GoVideo.

People kept coming up to me at conferences being like, I love sending Vidyards.

Yeah.

And so we realized it's kind of like the Kleenex of tissue paper, so we just called it Vidyard. Better for SEO, better for brand alignment all around. But the big— The big change now is that all of our products are available for free. So we realized that there was a huge market of people that were just trying to upload and share video.

Yep.

And the status quo vendors in that space were really Vimeo and YouTube. And there wasn't really a platform that was not only super easy, but built for business, and had a subset of features that allowed you to scale as your needs for video got more complex. We had that complexity, being generally an enterprise-first business, but we realized if we were able to re-architect the product, and put a lot of the simplicity that was around that Chrome extension in the core platform, we could offer that thing for free.

Right.

And we had a feeling that there was some pent-up demand.

Right.

So we launched that on September 24th. We've had over 2,000 signups a day since then, and it's completely transformed our go-to-market model and the type of people we're working with, which is super exciting.

I remember— we're at SaaStock Dublin right now, but when I was at SaaStock Hong Kong, the HubSpot APAC guy was like, when they switched from— when they switched to freemium, What happened was 99% of the company opposed it, right?

Yeah.

So how did you— I mean, I guess you get the final say, but like—

Organ rejection. Yeah.

What happened there? Yeah.

So funny you mentioned HubSpot. Part of the reason why we did this is HubSpot OEM'd Vidyard into its product lines. So in Marketing Hub, Sales Hub, and Service Hub, there's video functionality that's powered by us. And in the years since we launched that, 25,000 organizations have signed up, uploaded over a quarter million videos. And so we had this, prior experience through a partner that these free users were upselling, and were doing so in a very frictionless way. And so we used that momentum to put that into our core business. And so we were able to drive that change inside the company simply because we were already doing it through a partner, and we had the Chrome extension available for free that we were running a sales motion against as well. That said, ensuring that the product is being built to match the requirements of a free user base—

Mm-hmm.

And an enterprise user base is not an inconsequential shift to make.

Huge, yeah.

Traditionally, our engineering team and our product team was very much designed to work on the codebase and prioritise the codebase and the quality of the code and the efficiency of the code and a lot of the microservices that sat beneath our features. We made a big transition that said, now you're going to be aligned to the customer funnel. So we have a free team that has a PM, a designer, and a bunch of engineers. We have a pro team, Same structure, a business team and an enterprise team. And they share the core architecture, which is in these vertical guilds, but horizontally they focus on the features and functionality that those users specifically need. So a good example of this is an enterprise needs a bunch of security. They need SSO, they need to be ADA compliant, they need to be accessible. Our transcriptions, our closed captionings, we're the only accessible video platform today. That's because of the enterprise needs. A small business or an individual user doesn't necessarily need that.

Right.

So we have to bifurcate that product approach and ensure that the features are built to acquire users on both ends of the spectrum.

Got it. And so you said you're getting 2,000 new signups per day right now?

Yeah.

What were you at before?

Well, before we were at none really. I mean, we had the Chrome extension obviously, which was probably doing 50 to 80% of that on a monthly basis if I project it forwards. Um, the number I quoted you is just the new, uh, Vidyard free product, which is the hosted solution plus a lot of the creation tools. Um, uh, and, and that product itself was never available for free.

Right.

So we went from zero to, to kind of 2,000 new signups a day, which gives us a huge funnel now of having conversations with people that have familiarity with what they're doing with us, right? Instead of us calling them and saying, hey, have you heard of Vidyard? No. Here's what we are to you.

Can you share a range of what percent of those generally convert?

Yeah, so activation is north of 30%. For us, an activation is what we call a monthly active user, and an MAU is someone who has signed up for the product, uploaded or created at least one video, and has at least one view. So we're pretty strict with our MAU principles. A lot of companies would say anybody who signed up is an MAU. We know that Again, our mission is to help people be successful with video. If they're not actually using the product, and they're not actually getting people to view the videos that they're producing, then it's obviously not effective. And then from that point down, conversion to paid is actually from a free audience is, I believe, between 5% and 10%. Sounds about right. In a week, which is actually pretty reasonable, right? Like, we expected, A, way less signups, and less activations, because we haven't really even focused on juicing the funnel. In terms of traffic. This is purely organic. We're not doing anything paid. And we haven't even started tweaking the product to ensure better activation. We're going to introduce Clippy.

Yeah.

Remember Clippy?

Yeah, yeah. Oh, you're bringing it back.

We're bringing Clippy back.

Wow.

I'm just kidding. The team would hate me saying that, but I think we should.

Yeah.

Tooltips for you, Clippy. I love it.

Yeah. So what's interesting— I mean, my other podcast co-host, Neil, he bought Ubersuggest. And Ubersuggest on Google Trends now, because it's free, has overtaken the 2 primary SEO tools, SEMrush and Ahrefs, because it's free, right? So that's like the new trend, the new hotness.

Yeah, well, I think it's like, it's really simple, right? Salesforce said, hey, this whole on-premise thing sucks. We're gonna now charge you a subscription, which means you're gonna have to get value out of this product to keep paying for it, right? Right. I think the big transition we see in the industry is in martech, for example. When we launched, there was 150 companies. Now there's 7,000. We all say the same thing to the CMO. So in a commoditized market like that, the product that offers the most value in a frictionless and very, very quick, high-velocity way is the one that's ultimately going to win.

Right.

Because Brian Halligan, back to HubSpot, at Inbound asked an audience, how many of you have made a software purchasing decision in the past year? And it was all CMOs, VP sales. Nobody's hand went up. Because what's happening is people are using these products for free, getting value out of it, solving the thing they need to solve for, and then realizing there's extra functionality if they pay, and then asking for permission to buy that product.

It grows internally. It's much easier to sell.

Yeah. So we're making this shift from software as a service to results as a service, right? You're actually buying results. You're not just buying software. And that makes companies like me so much more accountable, or companies like Vidyard, to actually making people successful with the product. So that's this big transition to free. I think Slack was the first one that did it really, really well, and achieved near-infinite scale compared to their— their peers and competitors in the market. And we decided that we needed to shift our business model in the same way if we wanted to survive the next 5, 10, 15 years. Yeah.

I mean, my co-founder and I, we talk about— everyone talks about MRR, but it's like MRV. It's monthly recurring value. How do you continue to do that, right? And that's what you're talking about.

Monthly recurring value. Interesting. Let's talk about that a little bit. How does an organization measure that effectively?

So I mean, I was looking at the activation metrics, right? So the way you measure MAU is perfect. It's not just anybody that logs in. Like, for us, it's— the number of tests that you run, right? Are you running at least one test per week?

Yeah.

So that's what we're looking at. And you've measured it in amplitude free, right?

Yeah, yeah. Well, you know, I think at some point in this whole conversation of building a SaaS company, right, everybody gets into the unit economics. But the unit economics are the result of a customer actually getting value out of your product.

Totally.

And so few CEOs talk about the way people actually use the product and the value they get out of it. And I find that kind of bizarre.

Here's our ARR. Here's our MRR. That's it.

Yeah, yeah. Again, I think, back to your point on this organizational shift and some of the challenges we had, it was really just lining the whole company up, not with Vidyard, but with the customer of Vidyard. And to that point, we actually shifted our stakeholder list and said, the customer is number one. And everything we do has to be for the benefit of the customer. I mean, we come from Y Combinator, where the mentality is build something people want.

Yeah.

But as a company grows, sometimes it gets far away from that, right? And internal politics, and dynamics, and all that type of stuff gets obfuscated from what the customer really needs. So we went back to basics, looked at what the customer needed. There's this awesome opportunity for us to own this market for a free, easy video hosting tool that's built for business, that has creation layer on top of it. And, uh, that's the new Vidyard.

Love it. And so YC, going back to that, how involved are you with YC right now?

Um, so as a Canadian, or as someone who left YC and came back to Canada, I spend a lot of time with YC companies that are Canadian. And in fact, we have a small fund called Garage Capital, about $40 million under management, that is specifically designed to invest in Canadian technology businesses, B2B SaaS, and companies that could impact a billion people's lives. And so on that basis, YC companies leaving Canada going to YC is actually a funnel for us, because we talk to them all.

Ah, got it.

So that's kind of the extent of our involvement. If I was to start— people ask me this all the time— if you were to— leave, get fired, sell, or whatever, Vidyard, and you know it's no longer a part of your life, would you go back to YC to start number 2? And the answer is absolutely yes. It's a phenomenal program.

Cool. Great. Um, and because you have— now you have so many more users, what are some stats, video stats, you can share with people that you think are remarkable?

Yeah, for sure. So we do, uh, um, an annual report called the Video in Business Industry Report. Um, we have seen that companies are producing on average 3x more video content than they were last year, which is 2x the year before. So the amount of content that businesses are producing is actually amplifying and accelerating. So the market's getting there. I think the reason for that is the next generation buyer and seller is used to video being a part of that process. You know, consumer brands have been doing it for a long time, and the same person that buys sneakers also buys software today, right?

Mm-hmm.

So video is a really great medium for activating that next generation. Call them millennials, call them Generation Zs, Call them the alpha generation, whatever it might be, right? Next one is shorter content performs better than longer content. You know, that might seem like a no-shit statement to people, but attention spans are really, really small.

That's like reverse of performing well on YouTube. Yeah, but yeah, it makes sense.

Yeah, yeah, exactly. So I think YouTube works when you have a subscribed base and you're doing daily vlogs and that type of thing. People want rich content formats, right? Think of like Ewan Olson's vlog. I mean, he's one of the original vloggers and kind of a a pre-YouTube format. I think length works for him. But for a business, you know, when someone is on your website researching your product, they want as much information as quickly as possible. And that's why the freemium works, right? Because they're gonna watch a video, realise, yes, this solves the problem I have, I'm gonna start using the product. And people wanna do that in as little time as possible, right? They don't want to put their hand up and get on a call with a sales rep—

Wait a minute, yeah.

A week and a half from that point, run an RFP, go ask for a budget, all these things. They need to put a video on a landing page or in an email campaign. I want to go do that right now.

Yeah.

Right? So quick and short are ideal. Now, as someone goes down the funnel, let's say you're a traditional enterprise business, you know, let's say your ACV is $100,000 to $200,000, and we have— we absolutely have companies in that structure. Longer content works because someone is engaged with your brand, just like the vlog, and they want to learn as much as possible. So as someone goes down the purchasing funnel, It's almost like an inflected funnel.

Yep.

The funnel goes like this, but the content length goes like this.

Right.

So those are some of the commonalities we see. No surprise, GIFs as thumbnails are some of the best performing thumbnails. People are drawn to that, that kind of activity, that motion. The play button tends to be one of the most compelling call to actions on a website that we see. And another one is that video is now being used to drive engagement down the purchasing funnel or flywheel. So when a video is over, Don't just let that video fade to black. Give that person or that viewer options with respect to what they can go do next on your website, or where they can learn more, or how they can potentially talk to someone, or how they can connect with your chatbot, right? These are all tactics and techniques that, again, are shortening the sales cycle and the information cycle. And if you have someone leaning in and watching a video, you know, that's the opportunity to keep spending time with them and give them more information, let them go deeper and deeper on that process on their own. Love it.

So they can just search Vidyard State of Video, and they should be able to find it.

Yep. State of Video and Business Report. And if you want to start using the product, vidyard.com/free.

Okay, cool. And 2 more questions from my side.

Yes.

Actually, maybe 3 more. What numbers can you reveal around the business today? Because I think we talked about it last year, but just so people have, like, a 12-month update.

Yeah. So, on the free product landscape and the kind of creation tools, what we've done is we've integrated— so, that tool is integrated in the Chrome Store and Gmail. It's Outlook, it's Salesloft, it's Outreach, it's Mixmax, it's HubSpot. Um, list goes on and on and on. That product is approaching a million users now, uh, which is really, really exciting. And that's, you know, a million people that are exposed to our brand and using video to communicate, which helps us adhere to our mission. Um, in terms of paying customers, uh, or paying enterprises, uh, we're approaching 2,000, which is a great number. We serve about 50 million video streams a day.

Mm-hmm.

I don't know what that would look like in terms of an update from the last—

We'll have to dig it up.

Report. You have to dig it up. And yeah, we're on our path to 300 employees.

Nice. Congrats.

Yeah.

All right.

Employee count's never like a good metric. More with less is the idea, right? Yeah, yeah, yes.

Well, what is one new tool you've added in the last year? So it could be like an Oura Ring, or it could be like an app that's added a lot of value for you.

In my life? Yeah, I think the most impactful thing in my life personally has been Zero. I don't know if you're familiar with it. It's a fasting app.

Ah, from Kevin Rose.

I don't know. I think so.

Possibly, yeah.

So you're intermittent fasting? Yes. And what I've found is it's helping with my sleep, and I'm stably 15 pounds less than I would have been last year at this point. I don't know if you can tell, it all came out of my butt. That's why we were squatting when you came in. Yeah, I have no butt.

I have.

It's given me a lot more energy and better sleeps, and it's stabilized my moods so that the highs and lows of startup life, which come hard and fast, as you know, are just generally more neutralized.

It's discipline, too. It's hard to hold out that long.

It is, especially when you travel, but it's also helped me when I travel shift my eating schedule so that I shift my circadian rhythm. So the day before I came to Ireland, which is a 5-hour time difference for me, 8 for you. I started eating on that schedule, or fasting on that schedule, and jet lag has been non-apparent.

Last question. What is one book you've read in the last year that's made a big impact?

To Give a Pig a Pancake.

What?

Yes.

Huh?

Yeah. So it's a tale of a pig who really wants a pancake. But when you give the pig a pancake, It wants maple syrup.

Are you serious?

And then when it wants maple syrup, it needs a plate because the pancake's messy. And then it needs a plate, it needs a table, then it needs utensils. And it needs a table and utensils, it needs a house, and then it needs a bath. And it's a story about when you give things and potentially create this sense of entitlement, there's always an ask for more. And it's a reflection that was recommended to me by a gentleman named Tony Radone, who leads a you know, $5 billion business unit at Salesforce.

Yeah.

About encroaching entitlement in sales organisations and organisations in general, as you offer more perks and benefits to being a part of the team. And of course, at the very end, the pig kind of like forgets about the pancake, which is to me an analogy for the customer and what happens to organisations as they scale. So it's a really in-depth read. It's about 10 pages with one sentence per page. So you'll get through it in a 2-minute-long sitting, but it's a very interesting story.

Awesome. We'll add that to the notes. All right. How do people find you online? Because we are done.

Yeah, Michael Litt on Twitter, Michael Litt on Instagram, on LinkedIn, michaellittvidyard.com.

2 Ts.

Yes, 2 Ts, not the one T, which is very vogue, as I understand from all the Gen Zs. But yeah, that's pretty funny.

Mike, thanks so much for doing this.

Thanks, Eric. Cheers, man.