Almost Screwed: Bootstrapping From $0 to $20M ARR in 2 Years with ClickUp Founder/CEO Zeb Evans

So the title is Almost Screwed: Bootstrapping from $0 to $20 Million in 2 Years. And by all accounts, we were indeed almost screwed early on. To give you some context of how we were almost screwed, I wanted to show you a little bit about my background, which is pretty unconventional. So here's 6 facts about myself. I've almost died 4 times. I had 4 near-death experiences, and during one of those, I was in the hospital for 2 months when I was 10 years old. It was there where I learned how to create my first website, which ultimately made over $50 grand when I was 10. I dropped out of college when I was 20, and I lived in my car for about a month. That's where I learned to sleep 4 hours a night, and to this day, I still sleep 4 hours a night, even though I also have narcolepsy. And finally, I'm from a very small town of just a couple thousand people where nobody's ever heard of bootstrapping. So no surprise, I didn't even know what the hell it was, right? I thought it was a JavaScript framework. But essentially, bootstrapping is just building your own company without raising funding from outside investors, right? It's not raising venture capital. It's also being scrappy. It's being lean, generally because you have to. And so now that we all know what bootstrapping is, why would you do it, right? Why would you bootstrap? Well, you either choose to or you have to. You choose to because you don't want to give up control. Maybe you want to create a lifestyle business or control your own destiny, or you have to bootstrap because you're not able to get funding. So what were we? Well, truthfully, we were a little bit of both. We chose to out of ignorance because we didn't know a thing about getting VC money early on, but we also had to because no one would have funded our vision anyway. This chart shows the single most competitive software category in the world, right? This is the project management space. So there's literally hundreds of competitors and there's a new one pretty much every week. So needless to say, no one's going to fund you, at least early on in this category. And in all fairness, it's, it's not the smartest business decision to build another productivity app. But not only that, we also refused to choose a market segment. We wanted to build ClickUp as everything for everyone. We say one app to replace them all. And that's dumb, right? But today we have families, mom-and-pop businesses, product teams, and we even have enterprises that launch rockets to space that use our product. So we've kind of accomplished that mission of building software for everyone and everything. But again, early on, nobody would fund that. So that's how we just stumbled upon a thing that I now call natural product-market fit. I'm sure you've heard of product-market fit before, right? Everyone talks about this. It's, it's the holy grail in SaaS. You hit this and generally you're successful. But nobody's broken it down into the two very different ways of getting there. And the first path is natural product-market fit. Simply put, it just means growing organically, right? It means product-led growth combined with virality and organic marketing methods. And on the flip side, the second path to getting there is artificial product market fit, which basically just means you're buying your users and customers. You get funding, you spend it on sales and marketing, then you acquire users. And this is certainly the most common method for achieving product market fit today, at least for growing early on for that first subset of users. But why? Well, I mean, I'd argue we're kind of addicted to this product market fit. This chart shows the average size of venture capital rounds in the last 10 years. A seed round 10 years ago was about a million bucks, and today it's almost $6 million. So where is that money being spent? Where's the extra money going? It's certainly not research and development, right? Development, by all means, is cheaper than it ever has been. There's an endless amount of libraries, as-a-service providers, and and you combine that with cloud computing, and that's enabled cheaper engineering and development costs than ever before. So this money is actually generally being spent on sales and marketing for buying users, even your first users. But the real fundamental question that I'm after is, does that enable you to grow faster? Well, we did our own case study somewhat by accident. And what we found is our competitors with hundreds of millions of dollars actually not only grew slower early on than us, but also took 7 more years to achieve product-market fit. So natural product-market fit not only helps you achieve product-market fit, but it also helps you accelerate your growth after you get there. So how do you get to natural product-market fit? Well, it all starts with getting those first users. And you've got to do that organically. Content is still king today. It's, it's not dead yet. In fact, we started producing valuable content 2 years ago, which today now brings us about $12 million a month worth of free clicks that we would have had to buy. But it wasn't like that early on. We started with just a few visitors searching for answers, and then eventually it snowballed. You know, an example of this, it's building blogs, positioning your product as an alternative to other products or an alternative to the status quo. And those types of visitors are awesome. They'll convert all day. If you build it, they will come. It's, it's certainly a long game, but the payout is there if you're patient. Content is still king. Blogging matters. Again, we would have had to pay $12 million last month just to get the amount of organic traffic we generated from our blogs alone. So focus on the low-hanging fruit, right? Helpful content that people are searching for but aren't finding great results for. And you'll know this stuff intuitively on your own by searching Google. And the last point here, social media platforms, especially Web 2.0s like Quora and Reddit, those can really help you build a community of promoters early on. And that's been super phenomenal in helping us start some of our communities. Okay, so there's many ways to do this, but let's assume now that you have some organic users. Then what do you do? Well, you've got to listen to them, and listen to them as if your life depends on it. Now, contrary to popular belief, users do know what they want. It's certainly debatable in hardware where you have products that don't exist yet, but generally in software, they do know what they want. Alright, so use a feedback platform. We use Canny, and I love Canny, but there's plenty of them out there. You just need a place where your users can voice their feedback and vote on new features. You also need some type of product analytics. We use Pendo for that, but there's a lot out there. And then you're gonna have to build communities through Facebook groups, Quora, Reddit, or other social media platforms. And nothing beats talking to your users in person or in Zoom. You've got to develop that, like, real connection. That is fundamentally different than just interacting with people on a forum. You'll learn a lot more when you actually open that feedback channel. And finally, we're religious about surveys. We send almost a survey a day, and my rule is 60-second surveys, right? If you do 60-second surveys, everyone completes them, and they know that they're 60-second surveys, so they'll always answer your surveys again in the future. None of that 10-minute survey stuff, right? It takes forever. Plus, if you only have 60 seconds, you're gonna have to ask the right questions. You can't ask bullshit questions. You've got to ask what matters, right? Ask what matters. But can you really listen to every single user when you're doing all this? And absolutely, the answer is yes, you can, and we do. However, you certainly cannot actually act on all the feedback from every user. There's this intersection of feedback with vision, and that's where the magic, magic really happens. You've got to aggregate your feedback from everybody, which is on the left side, and then combine it with your vision, which is on the right side. You can't let your users define your vision for you. I want to be very clear about that. Otherwise you aren't creating your own product and you're not gonna create a unique product, right? You'll wind up building something that has been built already. You have to have your own vision and align your vision with your feedback. Again, it's that little sweet spot in the middle that creates natural product-market fit. And so let's say now you have some actionable feedback from the middle, then what do you do? Ship it. Right. And you've got to ship it really, really fucking fast. Really fast. This part matters more than anything. It's going to create an engaged user base, but also a viral feedback loop. Your users will become your best advertisers. And when you're listening to them, you're giving them a gift. Right. We still ship new features in ClickUp every single week, every Friday, and we've done so every single week for the past 2 years since we started. And is it perfect?

Hell no.

No, we, we shipped some really bad things, but what matters most is progress over perfection. We see that perfect is possible, just not necessarily right now, and we choose to ship really fast knowing that we'll improve it with the help of our users really quickly. So here's 6 tricks that we use to ship really quickly. And some of this is controversial, right? Especially this first one, like tech debt is BS. And I'd say only early on, right? We're only talking about early on, but there's no example of a company with product-market fit that wasn't able to scale. You know, there's plenty of examples, however, of people failing and/or failing to ship. But if you have product-market fit, you'll figure it out. You can always go back and fix what you did. And the reality is, once you're successful, it's not that hard to do. It really isn't. And it'll save you a lot of time. Number 2, separate your CSS role. So people that are programming JavaScript, and we're talking about the front end, should not be writing HTML and CSS. All right, they shouldn't be making your product pixel perfect. Now, this little change will make everybody happy. It's a win-win for all of your engineers, and it will save you tons of time. Number 3, don't write automated tests, again, at least early on. This one is also somewhat controversial, but when you're changing things so quickly, on the front end especially, the reality is you're gonna spend a lot of time breaking and then fixing tests when you're not actually breaking your product. There's a ton of overhead that goes into maintaining those tests. And so early on, we're advocates for not doing that. Point number 4. So everybody talks about 10x engineers, right? You know, everybody, you wanna look for those magical 10x engineers, but what we look for is kind of the 5x engineers, honestly. I think 5x, it's more realistic, number 1, But also you're gonna find a lot more of them, right? So shoot for those 5x engineers. In fact, like all of our testing when hiring people is based around, can you do a week's worth of work in one day? And if you can, that's when we hire you. And then number 5, work-life imbalance, right? It's not politically correct to say, but it's kind of like the core of our culture. I mean, we want people who love what they're doing so much that they're obsessed with it. You know, we only hire people who love to solve problems, and you won't stop solving problems until they get it right. And we're all like that on our team. So it is possible to find those people even today. If you work 10% harder than your competition, that compounds, and eventually you'll win. And that's probably one of the biggest elements to being able to ship really, really quickly. And finally, users will forgive you, right? Very minor bugs are okay, along with other product imperfections that you have. You know, sometimes those smaller things take the most time to fix, and sometimes you think way too hard on a product feature that really doesn't matter that much. So just ship it and see what happens. That's— that is truly our— some of our— what our core philosophy and that progress over perfection mentality. And when you put all those things together, you can ship really fast and you can ship weekly. And it creates this flywheel. The natural product-market fit flywheel is where you first get free organic users at the top, then you listen to feedback to improve your product, combine that with your vision, ship as fast as possible, and boom! You'll create this obsessed fan base of promoters, champions, and active users. And most importantly, those users will eventually become customers. They really will. And on the other hand, the right side, the second path to getting product-market fit is artificially. So get a ton of money, you spend it as fast as possible on sales and marketing, and you acquire users that way. Do they both work? Yeah, absolutely, both of them work. But to put this in perspective, using the left side here, we acquired 2 million users for free. Okay, so conservatively assuming like $25 a user, I mean, that would have cost us $50 million using the artificial method on the right side. And it was a lot faster on the left side, and we haven't run out of those channels yet. Right? And by the way, natural product-market fit is going to give you a lot better users. They'll be obsessed with your product. They'll be product advocates and champions. But I'm not arguing that one way is always better than the other still. You know, it certainly depends on your product segment, your stage of your business, and your circumstances. But what I am saying is that it's possible to grow faster and a hell of a lot more sustainably, organically, using natural product-market fit. Right? So let's assume you're at natural product-market fit now. What do you do? Well, again, you've got two choices. You can raise funds on your own terms because you already have product-market fit and you probably have a lot of revenue, you know, or you can just achieve and maintain profitability and ride it out. No, be content. There's, there's no problem with that. So what did we choose? We actually chose to raise funds. We just raised our Series A in July, right? Which may sound a bit counterintuitive to my argument early on, but it's not. It's actually part of the thesis. To achieve product-market fit, you can do it faster and more sustainably natural, right? In fact, we achieved all of the metrics on the right side using natural product-market fit first. And now that we have natural product-market fit, No, that's when you have choices. So if you're ready to scale up your go-to-market and your company, then of course raising funds is a phenomenal option. It's a great path. But at this point, you now hold the cards, right? You control your own destiny and you're gonna get a much better deal. All right, some 3 key takeaways. So with natural product-market fit, you can grow faster and certainly more sustainably than artificially doing it through buying customers. This to me is the real holy grail of growth, that natural product market fit. And then once you get there, you've got options. You can raise funds to accelerate your already incredible growth or you can scale profitably for what may be forever. All right, so thanks so much, everybody, for listening. If you're interested in saving one day every week, join our mission at ClickUp.com. Thanks again, everybody.

Hey, Zeb, you got a few questions here. I just wanna throw at you in your last few minutes. I know early on in the presentation, you talked a lot about content marketing and how this has really fueled your organic growth. Obviously, there's a lot of different types of content marketing, right? So like you mentioned Quora, the blog, SEO, like what types of content should you prioritize? Like early days or even now, right? For all the founders who are listening, like what's your take on this?

Yeah, it's a great question. I mean, early on, definitely prioritize blogging, right? Prioritize those, those content assets in written format because that stuff takes forever. I mean, it really— it's going to take a year until it starts taking off, a year or more. But within a couple months, you can still at least get a few early on users. Outside of that, video. Video has been phenomenal for us, especially if you can get some of your users, like your champions, to create videos about how to use your product. That's really taken off. And some of those, those videos on YouTube have millions of views that we didn't actually create ourselves. We kind of just created with the help of some of our early users.

Yeah, a related question that Thomas here is asking: how do you recommend promoting the content? So you just said video. Any other creative ideas you have that's maybe outside of the box?

Yeah, I mean, you know, for, for content early on when you're doing blogging, it's truly just about SEO, right? It's about, it's about finding those good nuggets of search terms. Great things are if you're in a competitive market, your product versus another product, or another product that's already known versus another product. Like in our example, Asana versus Trello. Lots of people search that stuff, but there wasn't great content for it. So we created great content for that early on. And we're just all— it's all about just attracting the user that you want to use your product. So anybody searching Asana versus Trello is going to want to use, use our product. So that's certainly a way to do it. And then you can carry that into YouTube as well. You know, find people in our space, the productivity space, you know, how do I become more productive? People searching that type of stuff. It's surprisingly actually really easy to rank for that because there's really not much content out there. So you have to find that stuff that just hasn't been too tapped into yet.

Yeah, no, that's— I feel like you and I could do a whole session on SEO for next time. Lots of folks here asking, you know, you guys ship new features every week. How do you decide what stays and what you sunset?

Yeah, I mean, it's a great question. At the end of the day, you have to look at analytics to know whether or not things are being adopted. It's not necessarily the feature's fault though, right? It may be a usability problem. Users don't know how to use it. It also may be that they haven't uncovered it yet first. So you've got to check those two boxes first before you decide to sunset a feature. And fortunately, the way that we built our platform is that you can turn on and off every feature, even on the users. Workspace. So, you know, many features that we know that users aren't— like, majority of users aren't going to use, we don't release that to everybody. It's just something that you have to enable on your own. But as far as how we prioritize features, I mean, there's— we truly do use Canny, our feedback platform, religiously, where we sort by the most upvotes, and we go in there and we say, hey, is this part of our vision? Again, kind of how I was talking about combining with the vision. If If it does align to your vision, then we do it based on that. But there's also going to be things that people don't request. We have a new email feature coming out next week that generally people haven't really requested the way that we've created it. So you've got to use your own intuitive gut for some of it too.

Yep, that's a great point there. So use the data is the key takeaway. Yeah, just make sure the data is accurate, right? Yeah, yeah, no, for sure. It's just good life advice too. Question related to something you mentioned earlier, which was like the work-life imbalance thing that's sort of, you know, you have this almost radical strategy of you want it to be a work-life imbalance. So the question is, how do you sustain that, especially in 2020, right? So obviously everything's different. Everyone's remote, like your whole team's remote. Like, how do you, how do you really take that model now and like make it, make it a long-term model that's sustainable?

Yeah, I mean, the short answer is we're still figuring it out. We've been able to scale it so far. Are we going to be able to scale forever? I don't know. You know, there's— it's probably unlikely that we can do that forever and we wouldn't want to. I wouldn't advocate for doing that forever. What my point is more about early on, it's more about your growth up until product market fit is that, you know, it's going to be hard to balance work and life. And if you find the people that, you know, really want to focus on work right now, that's when you're gonna be able to create this flywheel of really fast natural product-market fit. So it won't be that way forever, for sure, to be clear, but you certainly can find the people that are very passionate about their work and somewhat obsessed with changing things and making a very impactful difference.

Yep. You're getting a few questions here about bootstrapping, which I think is an important topic for folks in the SaaStr community. How were you guys able to bootstrap without any sort of funding, and what was the almost screwed moment in your mind?

Yeah, I mean, you know, so early on, of course, you start with just a few people, right? And you can't pay people much, and that's just the reality. We did start with a couple hundred thousand dollars, so, and it was just my own money from a previous company that I started, and that kind of ran its course. And it was probably 6 months into this where, you know, we had less than about $5,000 in the bank, And I'm like, shit, like, what are we gonna do? You know, we've gotta make some money. And I looked back to the things I'd done in the past, and we were a huge fan of promotions. Like, I love promotions, I love discounting, but it's not really done that much in software. So we have, you know, we run promotions like every week, we run discounts every week, and generally they have been phenomenally helpful for us. But that's exactly what we did early on. We ran our first promotion It was like a Labor Day promotion and we immediately got like $100 grand in revenue from that. And so that was like when the light bulb went off, I was like, holy shit, you know, our free users actually do want to pay us. They just want an incentive to do so. So that was kind of one of our light bulbs is promotions will definitely help, especially obviously if it's a freemium tier that you have, it'll help convert those people phenomenally well. 40% of our user base is paid. Even though that we have a very large freemium product.

Yeah, that makes sense. That was a related question someone has. How do you convert your free users to paying? And it sounds like promotions is the way to go.

Yeah, I mean, promotions and paywalls, right? Promotions is kind of just part of it to get them over that hurdle. But you also have to do paywalls. And paywalls is something that we do a little bit differently for most of them, where— We give you like 100 uses of a feature. So it's not a free trial that you have to start. It's not a time box period. It's a usage period of a feature. And it's, it's kind of invisible in the product so that you don't feel like, you know, you're running out of usage. You don't feel like you want to change the way that you work to not use that feature. Like, we're really about saving people time and we believe that some of our features can save people time. So to get them to use it, you've got to get them to adopt it first. And that's, that's a really great way of doing that.

Yeah, well, you're getting, you're getting some comments. We have some love for ClickUp. That's awesome to see here. Zeb, unfortunately we're out of time, but thanks for joining us here at SaasRow. This is a great session. You got some really good feedback on this being super tactical and helpful for folks. So as a last takeaway, how can people get— what's the best way for folks to get in touch with you if they want to learn more?

Yeah, you guys can email me personally, zeb@clickup.com. I still listen to every single piece of feedback. That comes into our platform. And thanks so much for joining us, everybody.

Yeah, that's awesome. Thanks for joining them. Have a good one, guys. Enjoy your next session.