S11E8: From Bootstrapping to SaaS Industry Leader with Wade Foster, Co-Founder of Zapier

This sort of makes sense to us that people would have the freedom and flexibility to work wherever they want, to fit life and work together. It doesn't have to be this big trade-off between the two. And I think if you do that well, you're actually gonna get folks that work just as hard, if not harder, on the thing that they're working on because they feel a sense of ownership. They feel a sense of pride over it.

Welcome to The Room Podcast. I'm Claudia Laurie.

And I'm Madison McIlwain. I'm Madison McIlwain. We are on a mission to open the door to the room where it happens, sharing the stories of some of the world's most iconic founders and funders. We're recording this introduction the week before our 11th season launch at the Forbes 30 Under 30 conference in Cincinnati. After making it onto the 2024 list for media, we've hit multiple milestones, including our 100th episode and our first ever all-day conference. Inside Summit with over 120 attendees July of this year.

Authentic storytelling is core to our community as Madison and I are both founder and funder. It all started as two best friends who met in the heart of San Francisco as product managers in 2018, then realized as we were making career transitions into myself founder and Madison funder, that we wanted to talk to the entrepreneurs that had built great companies. Since starting the podcast in 2020, I founded Pryve, a commerce payments startup raised venture capital, and faced a ton of challenges that I ask our guests. Madison became a partner at Defy VC and was the first institutional investor in my startup and is now at HBS and is a Pear VC fellow, bringing the funder perspective to the table.

Scroll back to find our conversations with the founder and CEO of Zillow, Spencer Raskoff, to Michelle Zatlin of Cloudflare, Grammy Award-winning artist Ciara, and the creator of Next.js and CEO of Vercel, Guillermo Rauch. Everything from consumer to enterprise, we've got you covered. The best way to get to know our community, both online and offline, is by subscribing to the podcast and our newsletter, which you can find at theroompodcast.com. Before we dive into today's story, we have a few short messages from our sponsors. Perkins Coie supports the most innovative entrepreneurs and investors in fast-moving and high-growth sectors, addressing their myriad of legal needs. But the firm doesn't just provide end-to-end legal and business counseling to its startup clients. It also facilitates introductions to key advisors and sources of capital. Perkins Coie's interactive website, Startup Percolator, offers access to programs, resources, and rich dynamic content designed to assist entrepreneurs on their startup journey. To learn more, go to startuppercolator.com and perkinscoie.com.

Coie.com.

This podcast is brought to you by Mercury, the banking platform businesses like The Room Podcast use to simplify their finances. It's time banking did more than hold your money. Now it can. With Mercury, you can pay bills in seconds, close the books faster, and even send invoices. Not only does Mercury do away with a patchwork of tools, it eliminates guesswork, giving you complete and accurate visibility into your business's finances. All from one account. Apply in minutes at mercury.com. Welcome back to The Room Podcast. In this season 11 finale, we're thrilled to take you inside the room with Wade Foster, co-founder and CEO of Zapier. For over a decade, Zapier has quietly revolutionized the way businesses operate, empowering teams to automate workflows without writing a single line of code. Zapier's journey began in 2011 when Wade and his co-founders recognized a growing need for tools that could connect disparate apps, seamlessly. At a time when automation was reserved for the technically skilled, they envisioned a platform that made integrations accessible to everyone. Fast forward to today, Zapier serves millions of users worldwide and supports over 6,000 app integrations. Funded by growth for years, the company has scaled profitably and remains one of the most admired SaaS businesses globally. With its unique blend of simplicity, functionality, and customer-first ethos, Zapier has become the go-to platform for automation and productivity. In this conversation, we explore Wade's entrepreneurial journey, the culture of building a remote-first organization, and Zapier's impact on the no-code movement. Key topics in this episode include scaling without traditional VC funding, democratizing automation, and Wade's vision for the future of work in an increasingly digital world. Let's open the door.

Wade, thank you so much for joining us today in The Room.

Yeah, thanks for having me, y'all.

We're so excited to have you. And we like to start at the beginning with all of our guests. So we're chatting a little bit about this before you got here, but tell us a bit about how you grew up and how that's shaped your view of the world.

I grew up in Jefferson City, Missouri, which a lot of people don't realize it is the capital of Missouri, not St. Louis, not Kansas City. But it's not a large town. It's 40,000 people. The largest employer in the state is the government. Behind that, it's the local government. So then it's like the hospital and stuff like that are like the 3. And then there's a fair amount of manufacturing and stuff. It's a bit more of a like slow, old school town. And my dad worked for the state. My mom worked for the hospital. My grandparents were schoolteachers. I just felt like a— what to me was like a pretty like normal upbringing. I wasn't exposed to like a lot of tech or anything like that. But family was always very achievement-oriented. It was like, hey, you need to do well in school, you need to do well in sports, you need to do well in music, whatever it is, you just need to do your best. So was always pushed and challenged to like give it my all on a lot of things and had a pretty good upbringing.

That's incredible. I love hearing how much your family had an impact on what you thought was possible from a young age and having them bring that into your sense of identity and kind of aspirations, even though maybe you might not have been exposed day zero to this crazy tech ecosystem. You saw that there is something out there that could be for you. And so I guess tapping into that early identity, did you always think you were gonna become a founder?

I didn't even know founder was a thing. When you live in a city where most people work for the state, starting companies, that's for, I don't know what type of person, but it was like for other people, right? That's a thing that somebody figures out. I had no exposure to that. And when you grow up, my idea was that you're either a teacher or a doctor or work for the state. Those are the jobs that I knew. 'Cause we just didn't have that much. There wasn't like titans of industry, sort of in and around that you felt like, oh, that's a thing I could go do. And so it kind of was like boring jobs. Like, well, I guess I'll probably gonna be one of those because that's what was around.

Sometimes you can't be what you can't see. And from, of course, looking at some incredible jobs that have been giving back to the community, working in the government, ultimately you found yourself at University of Missouri exposed to industrial engineering. And I, I have a note here that you did an internship at a telecom provider and quote, hated corporate life. So tell us a little bit about college internships and then how perhaps an experience like corporate America actually taught you entrepreneurship was for you.

I was kind of on cruise control, sort of like, I'll figure out the life thing later. And one of the regional telecom folks hired me. I ended up literally counting telephone poles that summer, which I didn't realize was a job. Uh-huh. Like we literally, I'd go around with one of the old vets in his pickup truck and we would drive and look at all these poles and there's a hammer that has a stamp on it. And if the pole isn't stamped, you literally get out and you stand next to the pole and you hit it with a hammer. And that's how you claim that you own the pole. And here's the wild thing about this industry is that in telecom, the poles are usually owned by one of two people. It's either owned by the telecom or by the city. And the industry has just grown up around, it's not a paper, it's in the minds of these folks that have worked there. And so a good chunk of the time I'd be driving around with the old vet from the telecom guy, but he'd go pick up the guy from the city and they drive down the city and go, I think we own those poles. Do you think so? And they're like, yeah, those are yours. And then the other one would be like, oh, I think those are yours. And so that was the accounting system for like how people knew who owned what telephone poles. So anyway, that was my internship, which that was actually the interesting part of the internship. Most of the time I just sit in a cubicle. And I'd do like an hour of work in the morning and then be done with it, not know what to do next. And then my boss would be like, you're doing such a great job. You're so amazing at your work. Which for the first week I was like, hey, I was feeling good. But then like week 2, week 3 come around and I'm like, so is this it? Am I just gonna surf the internet for like 7 outta 8 hours a day at work? And you started to play that forward 40 years into my life and I'm like, I don't think this is for me. Facebook was a thing, messing around with the internet. I came across Google Ads and I was like, hmm, make a website, put Google Ads on it. You can like make free money on the internet sort of thing. And that started to expose me to more ideas in and around tech and fortunate to land an internship at like a small software company the following summer. And that's what really hooked me where I was like, oh my God, building software. This is incredible. The fact that you can make a thing, put it on the internet, and then someone from Australia can just find you and buy it. How does that work? That was so cool to me to see that was a thing that was possible.

Ironically, Claudia was born in Australia, so great country shout out. What year was this?

So this would've been like 2007, 2008, right around like financial crisis. That was the other bit where it was like all of a sudden jobs and all that stuff dried up. I was like, what can I do? And tech was the one place where there was like interesting things happening.

Absolutely.

Honestly, it sounds like sheer boredom and curiosity is what really catapulted you into this crazy rabbit hole of the internet in a time where Of course, the cloud is just getting established with AWS, as you're alluding to with Google Ads and that becoming a prolific place where you can just set up a website and interact with people from all over the world. Tell us a little bit about that internship you mentioned and really the exposure then that you gained into the marketing tech stack and how that really brought you into what I'm assuming was your first role out of college.

Yeah, joined a company. It was ran out of a professor's house. There was like 7 or 8 people there. Most of them were software engineers. Building natural language processing tech that would like automatically grade essays, which today sounds quaint. Like ChatGPT could do this, no problem. But at the time it was like really hard and it was a weird thing. And I talked them into hiring me as a marketing intern and didn't really know anything about marketing, but I was like, hey, I like math and online marketing is kind of math stuff. And so I always taught myself how to do some of these things. And fortunately they were like, hey, that guy seems smart. Let's have him join. I don't think they knew what they were doing either. The irony is the whole time I had that job, I was pretty terrified that they were gonna realize I don't know what I'm doing. They're gonna get— and partly was like, I was trying everything to like find the software, buy the software, use the software. Nothing would work. I tried SEO and search and email and sales and biz dev and all the different things. I was just like speedrunning all these different channels and nothing worked. I was like, they are gonna fire me. Like, how could they not? I'm failing on every single attempt. At this stuff, and eventually I came across things like Lean Startup, customer development. I was like, maybe it's not me. Maybe I'm not so bad at the job. Maybe the product has to be better. It was a self-preservation thing. And so I started to like get into actual product development and saying, you know what? I might have a better chance at long-term success if I actually learn how to build some of this stuff myself. I have some ideas. Maybe we could go make that happen. So I thought, I'm gonna go one day take a crack out of building this. This guy Brian Helmick, who was to become my co-founder, who I pinged because he was the best developer that I knew. I was like, hey, can you like show me the ropes on some of this stuff? We knew each other through the jazz department at Mizzou, and he knew I played saxophone and they wanted a new saxophone player. And he's like, yeah, why don't you come play in my band and I'll help you out on some of this stuff? So that was the trade. But it led to like a pretty long friendship where we would jam on music all the time. After music, we'd start hacking on stuff. We'd take odd jobs here or there. And he was working over at this company, Veterans United in town, which is like one of the most impressive companies out of Columbia, Missouri. So I went over and joined him over there working in the marketing department. One thing led to another and we ended up starting Zapier.

That's the perfect segue to 2011 when you guys co-founded Zapier. So you told us a little bit about how you met Brian. It seems like hacking together, you guys birthed an idea that became something a lot larger very quickly. And then you met Mike. Tell us a little bit about how the three of you came together and those initial hacky threads that then led to the insight for what Zapier is?

So I met Mike through Brian. They met on Hacker News. There was a ShowHN thread that was like, hey, put your zip code in and see where other people on Hacker News are. And Brian and Mike were the only two dots in Columbia, Missouri. And so they're like, hey, let's catch up, let's meet each other, et cetera. So they hit it off and Brian introduced me to Mike and eventually Through all that sort of like side projects and dabbling, we were all always pitching ideas and Brian had this insight. He was like, a lot of folks seem to be trying to build like integration between SaaS tools and not getting it. I think we could build a pretty simple UI that allows a non-engineer to set up these little integrations. And my day job at the time, I was working with Marketo and I was trying to build on top of the Marketo API. Mind you, I'm not a trained software engineer at this point. I'm learning. And so I'm bad at this. And the Marketo API was like this old school, like SOAP WSDL thing. The documentation was in a PDF. I was like, if the thing you're talking about existed, I would use that rather than writing code because this is such a hassle. And so there was this upcoming Startup Weekend, which is like a hackathon style thing, 54-hour hackathon thing. And so the 3 of us went there and we built the very first prototype for that, that weekend. And we had a lot of fun building it. And so the, after the weekend was up, we were like, you know what, let's just keep hacking on this thing. And so that was like the very original nexus of Zapier.

Did you win an award at the hackathon?

Ha, they did have an award and we did win the weekend. Yeah. I think there was like a cash prize and some other stuff like that.

If only you knew then what was about to happen. Let's fast forward a little bit. You then, after the hackathon, applied to YC Summer 2012 batch. You guys were accepted. A lot of startups are born out of YC. Tell us about your YC experience.

Well, we did apply to YC right away, but we got the bulk rejection the first time around, which sort of made sense. We hadn't built much of anything. If you looked at our resumes on paper, we didn't have much to show for it. There was not a lot that would make us stand out. So when we got the rejection email, it was kinda like, yeah, that makes sense. But we're still having fun. We're gonna go make a run at this. And so we worked, kept our day jobs. Mike was still in school. and we worked like nights and weekends just trying to build out the first prototype, get actual users on this thing. And one thing led to another, and by the time we applied for YC the second time around, we had, I wanna say almost 1,000 people who'd paid a one-time fee to get access to the beta. We had another like 10,000 people on a waiting list. We had a bunch of YC startups that had used the product and we got them to vouch for us in the application process. And applied a second time, and that time we did get in. But yeah, it was not quite the, uh, we're off to the races story.

Yeah.

Resilience, an important trait. I, I'm curious, so you mentioned when you were kind of working previously, you tried all these different like marketing and sales tactics to try to get folks to buy software. You kind of organically built a waitlist of 10,000 people. Tell us how you approach that differently.

I think the thing we knew with Zapier pretty early on is we had a really clear picture that there was a problem here. And you could see it because you would go look in the user forums of all these SaaS services and people would be asking questions like, when are you gonna build an integration with this? And then there'd be plus one, me too, me too, me too. And then you would eventually find a product manager that would get into the thread and be like, hey y'all, thanks for the suggestion. We'll take a look. Maybe we could consider it. Which, if you've ever worked in one of these companies, you know that's code for like, yeah, probably not gonna happen. So we would see all that and we'd be like, okay, we just need to like soak up this latent demand. And so the early bits were me just like coming into the forums, dropping links to the website saying, hey, you know, I'm working on a project that could solve this, so if you're interested, come check us out. And so we'd get a small little drip of that. The landing pages started to get indexed by Google. So people who are going out searching for like Zendesk Jira integration, they're starting to find us. So you're just starting to pick up this like latent demand that basically there was no outlet for. People were just dead end. It was like, unless you know how to code, sorry, there's no way for you to do this.

That's incredible. Definitely inklings of product market fit at YC. Demo Day was recently, there's another batch happening soon. I think there's more batches now. What's your advice for founders who are entering YC? Like how can they make the most of their experience?

The biggest value we got outta YC was focus. Pre-YC, we're juggling day jobs, we're juggling these other things, just trying to make sort of stuff work. We come out to YC, the 3 of us are living in a 2-bedroom apartment, so you can do the math on how glamorous that is, all summer. And we basically wake up in the morning and we're just writing code, talking to users from the moment we get up to the moment we go to sleep. Yeah, that whole summer I think we took 1 day off, which was like July 4th. Other than that, we just cranked, no distractions, nothing else. No parties, which sometimes folks in a YC batch can get caught up in some of the glamour and all that. For us, that would just— wasn't it at all. We were just heads down. How do we go make this thing happen? And it feels weird to say like the biggest value was the fact that there was nothing else to do, but that actually was like the biggest value for us. There was nothing else. It was this.

That's incredible. Well, as you're like hacking away, not taking any like days off, you're obviously learning more about your customer segment. Zapier is known as the leader and market creator for the integration and automation market. During that summer, what were some of the hero product and customer use cases that made you realize, hey, we have something big here?

There was like a handful of moments that stood out to me. Maybe I'll tell two. So one was pre-YC, which is the very first customer we ever got. I remember the very first customer was this guy, Andrew Warner, who runs a podcast called Mixergy. I liked the podcast, was a fan of it. Very early on, I was looking at those forums to see who needed what. And I actually came across Andrew's posts in this user exchange saying like, hey, does anyone built a PayPal Highrise integration? Highrise was the CRM that 37signals had back then. And I was like, hey, maybe we could get Andrew as a customer. So I was like, okay, I'm gonna cold email him, see what I can find. I remember doing some research on him and shooting him a note saying, hey, you still looking for that PayPal Highrise thing? And he emails back, no, I found something, but are you working on something? I'd be curious if you built it. I was like, ah, great. He left me an opening. And so in that opening, I know he doesn't need PayPal Highrise, but is there anything else I could sort of like guess that he might need? And so I saw on his site he used Wufoo as his form service. I knew he used AWeber for email. And so I emailed back and I was like, yeah, we're building this thing that can connect any app like PayPal Highrise, Wufoo, AWeber, and other things. And so he was like, Oh, I actually really do need something to hook up Wufoo and AWeber. I'm always exporting my contact list and putting that into AWeber. And so I was like, great, I think we got him on the hook. I went to Brian and Mike, I was like, hey, we don't support Wufoo and AWeber, can you all build that tonight? And so that night they hooked those two into the platform and then I shot him a link back and said, here, take a look. And Andrew signs up, he goes through the onboarding and he starts to set it up. He emails me back maybe a day or two later, I forget the exact details. Hey Wade, so, uh, this is looking pretty cool. I'm a little stuck. Could you maybe show me how to get this set up? And so I was like, yeah, sure. Let's jump on Skype. It was Skype back in the time. And, uh, I start to walk him through the setup process and as I'm walking him through, I'm seeing all the ways the product is very poorly designed. I'm a little embarrassed. I'm like, oh my gosh, he is gonna think we are incompetent. Like, is what it boils down to. But he surprises me. We get to the end, we test out this app and it sends his contact from Wufoo into AWeber and he goes, oh my God, Wade, this is gonna change how I do this. How much do I owe you? Where do I send you money? I was like, oh boy, we hadn't thought about making money or anything like that at the point. And so I just was like, you can pay me $100 and that'll get you access to the beta as long as it lasts. And he is like, great, where do you send it? And I was like, oh crap, another question I don't know the answer to. And I was like, uh, Here's my PayPal account. So he PayPal'd me $100 and I remember thinking at that time, holy cow, this is the total opposite of that software company I was interning at where I tried everything and nothing worked. Here it was like first try and like it worked. I was like, this is incredible. You get that like joy rush and I've been chasing that dragon ever since. Like that feeling is incredible. So that was probably the first one. The second one then was not a customer, but a partner. So a big part of Zapier's business is how do we get all these integrations going? And we built the first 50 or so ourselves. This would've been during YC, and it was probably a couple weeks in. We get an email at, it's like 2:00 AM on a Friday or Saturday night slash morning, you decide, and it's from Aaron Levy, CEO of Box. And he says, hey, love what you all are doing. Why don't you have Box on Zapier? And we were like, we should. The reason is that there's 3 of us and we're going as fast as we can. Like, I, you know, that was basically it. But the fact that here there's this company reaching out and thought like it was important for him to have an integration with Zapier, that was sort of like, okay, I think we're onto something. We sort of have the customer angle, we have the partner angle. How do we start to bring these bits together? So it's just like those early little tugs of demand where you're like, oh, we didn't force this on somebody. Somebody just recently reached out and wanted this.

People are throwing money at you. They're inbounding you.

I wish it was throwing money. It wasn't quite that, but inklings of that.

It seems pretty obvious that scaling is the next part of the journey for you guys. And Zapier has had a unique funding path. You've raised $1.3 million in venture capital coming out of YC. Since then, I think, you know, in 2021 you hit a $5 billion valuation, obviously like a, a mega unicorn these days. Tell us about the decision to not further raise VC and what advice you would give founders who are looking to grow efficiently, especially in today's market conditions.

For us, there was two things that allowed us to raise or grow basically super efficiently without having to do a round after round of venture capital. First thing was more of a, probably just like an intrinsic way we thought about building businesses. We're from the Midwest. This idea of, oh, we're gonna go raise money, we're not gonna have prices, we're gonna just burn a bunch of money. That didn't sound like a business to me. I was like, that's something else. I don't know what that thing is, but that's not a business. Business is you make a dollar, then you get to spend the dollar. Like, that's sort of how it works. We had worked at that company Veterans United, That was owned 50/50 by two brothers. They never raised a dime. I was employee 500 there, and then when I left 10 months later, they had 1,000 employees. So we'd seen insane scale effectively bootstrap companies. And then on the flip side, you hear some of the horror stories of, hey, you raise your venture capital, you give up control, they fire the founders or CEOs, they replace 'em with their own. So you hear all those horror stories and there's, do we really want to go down that path. And I think the fact that we had that exposure made us just a little bit more, I'm gonna call it discerning, uh, but perhaps it's skeptical of like certain grandiose statements. So we'd hear things like, oh, no important company or no big company has ever been built without venture capital. And I'm just like, that's just not true. When you make a statement like that, it means that every other statement outta your mouth, do I really trust it? So we sort of had that just natural hesitancy. The second thing I think that was important is there were some mechanical things about how Zapier's business works that made it possible. So the main one was we figured out very early how to acquire customers at almost no cost. And so when you have nearly zero customer acquisition costs, it means that the moment you get a customer, you're profitable. You don't have to go spend a bunch of money upfront to acquire them. You, and and that allows you then to have a bunch of growth where you don't need a big balance sheet ahead of time. And so I think those two things fit together. If you had big capital expenditures that you had to use upfront, if you had to go hire like a big enterprise sales team, maybe you do actually have to raise some money to like actually pull off that business, or you're gonna have to go a lot slower. But for us, it's pure play software business that has more or less these PLG mechanics in it. And those two dimensions meant what is venture capital gonna do to help us grow? Like it, it just wasn't much of a necessity, I don't think.

Yeah, I know it's so interesting hearing how you started the business with these fundamentals in mind that have been core to businesses for hundreds of years. That's a really cool thing for founders to hear and realize, like, your PLG company can also be profitable from the get-go. Before we shift gears into the growth stages of Zapier and what you're excited for in the future, the early days are always so crazy. You know, there's always these crazy stories. What's a funny or memorable story from your first couple of years of building that you haven't told before?

I remember the less glamorous part. I mentioned the, the 3 of us moving into that 2-bedroom apartment. Mike turned the kitchen into a makeshift 3rd bedroom, so he hung up curtains from the wall to wall that turned that into a 3rd bedroom. So that's how that worked. And there was no furniture. It's like, I don't know what I expected, but in hindsight, that's probably what I should have expected. 'Cause it was just like, we got this apartment on a dime. We don't have any money. We throw mattresses on the floor and like, We're not gonna spend money on any, like, anything else. It was like, we don't have any money to spend on it. So I think sometimes folks get this impression of like, there's a certain glamor in being a startup founder and whatnot. And it's, the way we did it was not glamorous. The way we did it was on a shoestring budget and just delaying gratification as long as we could to get things going. So, so that, that, like, that moment stands out for sure early on. Here's another one. When my wife moved out towards the tail end of YC, her and I got an apartment that was in the same complex that was across the sidewalk. And we set up the router in the other place such that we could share internet as well too. So like, again, stuff like that, we're just not gonna spend a buck if we don't have to.

You guys are scrappy in the truest sense of the word, and you're also very far from home. We started this podcast with your origin story in Missouri. It sounds like eventually your wife did, and your co-founders, partners came out and joined you in the Bay, but Today, Zapier is a remote-first company, and you were that way before the pandemic when work from home became, you know, sexy. How did you guys think about building and scaling your company such that it fit the authenticity of who you guys were and where you were from?

When we started to think through hiring folks, we sort of just played the hand that was dealt us. Mike, at the tail end of YC, he moved back to Missouri to be with then-girlfriend, now wife, as she was going through law school and, you know, he's too important to the company. It's not like we're gonna like, hey, we're gonna kick you out and try and do this without you. Like that thought didn't even cross our minds. It was just sort of like, hey, Mike's in Missouri, we're in California, we're used to working on chat and things like that, so we'll just set up shop that way. Then the second thing is when it came time to hire someone, the first person we needed, we needed some help on customer support. We're thinking through like advice from some folks who've done this before, and one person was like, Why don't you just work with people you've worked with before? That de-risks some of this stuff. And it turns out we don't know anyone in the Bay Area. All the people we know are like back in the Midwest. Bay Area is like pretty expensive, pretty competitive, all this other things. But I had an old roommate that ran a, one of the biggest, like the Chicago Cubs message boards. And I was like, if you can run a Chicago Cubs message board, I think you could probably do support. And so he was in Chicago at the time. And so I was like, hey, why don't you join up? Convinced him to join. Another engineer we found that was in Columbia, Missouri that I'd known before we left. And so we got him to join. And so pretty early on it was like, I guess we're doing this distributed thing. Like we don't need an office again. Like why spend money in an office? That's just more, that's just more money we don't have. But we can hire these folks all over that are pretty talented. We don't have to pay San Francisco rates, which for a tiny startup, that is Again, you can see how we think about money. It's like we got a good deal anywhere we can. And the flip side was like, at least in Columbia, Missouri, we knew the dynamics of the market there where there was 3 companies that hired engineers and a senior engineer in any of those companies, the like max rate was like $80K. And so we're like, holy cow, like we can come in and give 'em a 50% pay increase and still be getting a great deal on this situation. And so it was that kind of observation and the willingness to just be like, I think this remote stuff can work. There was other companies that were doing at the time too, like Reddit and GitHub and Basecamp. Clearly it's possible. Maybe let's give it a try. And then the next piece on like the culture side was just simply what kind of business do we wanna run? And we were like, this sort of makes sense to us that people would have the freedom and flexibility to work wherever they want, to fit life and work together. It doesn't have to be this big trade-off between the two. And I think if you do that well, you're actually gonna get folks that work just as hard, if not harder. On the thing that they're working on because they feel a sense of ownership. They feel a sense of pride over it in a way that, you know, if you're doing the 2-hour commute both ways every day, that grind just, that hits at you at a certain point. So I don't know, those are some of the things that we just picked up early on and we're like, maybe that could work for us.

Necessity is the father of invention meets talent arbitrage based on what you knew about this market that is untapped in terms of talent. So, bringing that together for early scale for Zapier. And then of course, through to today, it's been 12 years since you guys went through that YC batch. And today you're an incredibly successful company, over $300 million in ARR, as Claudia mentioned, $5 billion valuation. Just taking a step back though, we've talked about a little bit of the product and the kind of components. We've said things like zaps. For maybe our non-technical listener base, could you just give the layman's version of what Zapier does and what your core product is?

It started as a very simple tool to help you integrate apps. So, what does that mean? Say you use Stripe to collect payments. Anytime you get a Stripe payment, maybe you want to post a message to Slack to say, "Yay, someone paid us money." Great. Zapier can set that up for you in 2 seconds. So that's where we started. Since then, it's expanded from just these abilities to connect this to that to a full-on workflow automation engine. Where you can do much more sophisticated workflows. So for example, you could say, hey, I'm going to see if I can get leads out of Facebook. Great. You got a lead from Facebook. Hmm. Now maybe I want to figure out, is this a legit business or is this a free email drop? Okay. Send it to ChatGPT and tell them if it's a free email address or not. Okay. Now that I know that it's a, it's an actual company, maybe I want to do some lead enrichment. Okay, great. Send it to Clearbit. Clearbit's going to enrich all this stuff. Okay, great. Now I know all that. Maybe I want to send them a follow-up email based on what this is. Okay, great. Send it back to ChatGPT and have them write an email that matches all this information that you know about this person.

Okay, great.

Maybe I don't want to send it without reviewing it. So how about I drop it into Gmail as a draft and then I can come in and press send on it. So Zapier is helping orchestrate all those workflows. And then we have products like Tables and Interfaces and Chatbots that are sort of helping you orchestrate all this stuff with a set of really reliable automation tools. And so from connect this to that to automate white collar work, Zapier is the place to do it.

That was so simple and straightforward. And as someone who used to work with the backend of Gap's e-commerce infrastructure, a lot of things have to talk to a lot of people, and sometimes those languages feel different. So having something like Zapier in between many different products, many different APIs, and the technology ecosystem is integral and in fact incredibly sticky. So sticky that it explains your explosive growth over the years. And I guess just in that vein of initially charging someone about $100 for one integration, to what I would imagine today is many integrations for many customers. How did you think about the business model scaling alongside the product?

You know, when we started to think about pricing, when we're actually gonna launch for real out of beta, there's the funny story and then there's the one when we got serious. The funny story was we were like, okay, we need pricing. And I remember this was back in Colombia, the three of us, we were up late one night. It must have been I don't know, 1:00 AM, 2:00 AM, something like that. And we're trying to settle on, well, how are we gonna price this thing? How many plans are we gonna have? And we got into a pretty fierce debate where I don't even remember who was arguing what sides of this thing, but I remember that there was a little bit of like, oh, we should have 3 plans. No, we should have 4. No, the plan should end in a 9. No, I heard they should end in a 0. And it was just like all of us had read a different blog posts, and there was a moment where it was that Spider-Man meme where like all three of us pointed at each other and we're like, none of us know what we're doing. We're just making this up. And at that moment in time, we were like, you know what, let's just get weird with it. And so we decided to launch our initial pricing based on the Fibonacci sequence. And so we had an $11 plan, a $23 plan, and a $58 plan. And then because we are such massive nerds, we thought, hey, We're selling Zaps. Let's name the plans Volts, Ohms, and Amps. So yes, we are great at a party. That was like the very first one. You could tell it was like not very serious at all. But here's the kicker, people bought it. It like worked. It was weird, but people were like, yeah, this is what I need. I'm good. Now, probably 3 months later, we were like, okay, we need to like figure out a more normal way to do this. And that's when we started look at probably the path forward is to look at comparable companies. So we're doing integrations with QuickBooks and Mailchimp. What are their business models? So they're all selling for like $20 a month, $50 a month. And so that starts to set a price point where you're like, okay, we probably need to be in and around those price points. And then you start to look at what are we actually giving away? And it's like, well, Zaps. So you can buy a bundle of Zaps basically. And so that's how it started. And then over the years, it's mostly just been as we've built more features and capabilities. Figuring out, okay, when customers are able to do more with Zapier, how do we also charge more and extract more value? And that is like a very simple thing to say out loud. It's a very complex thing to, I think, actually orchestrate. We could do an entire separate podcast on lessons learned on pricing and packaging. I think it is probably one of the hardest disciplines inside of any business. There's definitely some science to it, but there's also some just voodoo magic that you gotta figure out as you go.

And well, man, I wish we were also on that podcast cuz I'm super curious. But maybe if you could distill all of those learnings into a core point about a go-to-market strategy for a fellow entrepreneur who's also selling into other B2B SaaS products, like what would you say is one of those big lessons? Top 3 or top 1?

When you're just getting started, I do think just being aware of What other things do your ideal customers buy? How much do they spend on it? And that gives you a sense of what the budget is. Here's how they think about my product. And it probably gives you a zip code that you wanna be in. And you probably need to think through like, are we more of a premium product? Are we more of the cheap product? The second thing I think you wanna think about is longevity of your customers. And I think when it comes to that, you more or less wanna be in a world where you're giving more than you're getting out of these things. If you're consistently doing that, you're gonna have a lot of retention inside of your customer base. And we've seen this recently where zero interest rate period went away, got a lot harder to grow, and you could see all the bad behavior from all these companies where they're like, ah, crap, like my growth rate isn't where it needs to be. So CRO shows up on sales call and says, hey, we're doubling your price. Yeah, but why? Because we need to make more money. That doesn't do anything for me. So you see all that bad behavior happening now, and I think you gotta fight that temptation. That is, you can make more money and maybe you even will make more money in the short term doing that. But I think it's the type of stuff that is detrimental to a company's brand over the long haul. I mean, we made that mistake at times too, and you really do have to fight against that urge and constantly be thinking about where is the value exchange? So there's just an element of just continuing to listen to your customers and like really understand, are they getting happier? Are they getting more frustrated? How does that move? And then how does price sit up against that? I, I don't know that there is a heuristic or a trick or a rule to that that you could give away and be like, hey, every business do it this way and you're gonna be good. I think it depends on the business you're in.

Definitely an art, not a science. And I love the orientation towards listening to your customers and not pushing them too hard. They're trying to grow too, right? So sometimes If you make it too expensive, they're just gonna say, thanks, but no thanks. We don't actually need you that much. So finding that balance is so important. And we've been talking a lot about the growth journey for Zapier and you and your team and a little bit of the past. I'd love to switch gears to look towards the future a bit more. You mentioned the shift in macro environment. It's been a really hard couple years to build and scale companies. You guys are still thriving, and to the extent that you can talk about things like IPOs, exit opportunities, curious how you guys are thinking about What's next in your growth journey for you all?

Maybe it's not too much of a surprise, but we don't really spend a lot of time thinking about IPO or exits or things like that. We spend a lot of time thinking about the same stuff we've always thought about, which is how do you really make customers be successful? How do you make automation work for people? We've just barely scratched the surface here. Yeah, we're 13 years in and what success we have, we're happy about, but we also look out and see all the folks that have tried Zapier, it didn't quite work for them. We see all the folks who have automation opportunities all over their business. We see folks like stuck doing just menial tasks, low leverage work, and we're like, gosh, we have got to find a way to make this easier and simpler. I am really excited about the capabilities that AI is bringing into this space. I think it opens up a whole new set of use cases, a whole new set of ways to automate your work. So we're pretty excited about pushing on those dimensions. But by and large, our long-term goals are to stay obsessed with our customers and figure out how do we keep making their lives easier. If we talk again 10 years from now and we're still doing that, I think we'll be in a really good spot.

Okay. I'm marking my calendar now because I'm looking forward to that 2034 convo if we're still doing this. But I'm so glad you brought up AI. I've been holding my tongue to ask any question about that because there's so much more to your story, but It really is such an exciting time in what you call the automation space, and AI is absolutely reimagining how both individual consumers like Claudia and myself, and then the enterprise customers of the world on what is automation. So could you just share a little bit about Zapier's view on how AI and automation are going to come together?

They're definitely siblings. AI opens up a whole new set of use cases and automation capabilities. What we are seeing is that large language models are really good at working with unstructured data. And so in the past, if you were to try and automate something on Zapier, you got a first name and a contact field and an email field and working those things through a system, that worked great. But the moment you just gave us a big old blob of text and said, do something interesting with it, okay, we can maybe do it, but that's not really what we do. But now you can put an AI step in the middle of this. And get all sorts of interesting stuff. So you can say, hey, I'm gonna feed you a whole bunch of raw comments that have come through on a survey, and I want you to categorize them. And I want you to tell me what are the main themes. I want you to tell me, are the themes positive or are they negative? Tell me what are the things that we need to go fix? What are the things that we should market on our website to say that we're great at? And you can feed a whole bunch of stuff through a form, through Zapier, through an AI step, and just get a whole bunch of automated insights. Through that, easy peasy. It used to be this, oh my God, head-scratching way to go do that. Now it's super easy. It's really good at generating text. So if you wanna say, hey, I'm gonna feed you all this stuff, but now I want you to actually go write the marketing material, or at least write a draft of it, it can actually just go generate those suggestions and write that stuff on its own. Or maybe there actually is particular details in there where you wanna extract data. So perhaps you're getting like PDF receipts. And it's got purchase data or contact information or invoice data, and you wanna extract that out and put it into a database somewhere or into an invoicing system somewhere. These LLMs are really good at saying, ah, yeah, that's an email, here you go. Or yeah, that's the item you bought and that's how much it costs. Great. Put that in this spreadsheet row and then that spreadsheet row. So it's really good at working with this unstructured data. It just opens up a whole new set of use cases that I think is pretty exciting. The second thing that I think is really exciting about it too is that It also helps with the building side of this. I think this is gonna exist for like almost any product now should probably be using some sort of AI assistant type experience to help you build and configure. A lot of products, especially more technical products, especially products that get used in more enterprise organizations, there's always like a fair amount of configuration that goes on in these things. And even if you like make it really well designed, you still can't escape the fact that there's a lot of knobs and buttons and you gotta go through. And if you make a mistake on any one of those knobs or buttons, it might not quite work how you want. But if you can just toss a text box at a human and then the human can describe what they want, the LM can interpret that and then go configure on your own. That just eases the configuration setup for a lot of products. And so I think there's a whole like user experience optimization that can happen on that dimension as well too. So those are a couple ways that we're messing around with it. I don't think that even scratches the surface though. I think there's a whole bunch of yet to be discovered ways in which these tools can enrich the ways we work, the enrich—

we—

ways we live our lives that a bunch of creative entrepreneurs, builders are gonna go uncover. It, it really is a fun time.

We're excited to keep our eyes on how the space is evolving and the automations integration space is such an exciting sector for growth and opportunity, especially as software is getting easier to build. And so with that backdrop, what are some things that Zapier customers can get excited about in 2025?

I think there's a couple things, but maybe one that I'll specifically call out is we launched beta access to this product called Functions about a month ago now. And Functions is different for us. Most of the things we've built in the past have been for people who are not engineers. And Functions is an online IDE where you can actually write code, but hook into all the triggers and actions, all the ecosystem stuff that Zapier has already provided. And it works great for folks who are maybe semi-technical. You don't have to be a full-time engineer, but if you've ever written a script, a one-off thing, you can actually build out these really interesting workflows and you actually have a lot more agility and flexibility to go describe those than you do in a no-code editor. And so I'm pretty excited to see what people go build with that. As Zapier has grown, we've seen more and more like semi-technical folks playing around with it, and it felt like we always underserved those people, and I'm pretty excited to see what folks are able to go do with that.

We're excited to see that as well. What are you excited for personally next year?

I got two things in my life. It's Zapier. How do I go make that happen? And I got two little kiddos at home. I am just enjoying being a dad. And so those are two of my favorite things right now.

We're going to ask the last question here today, and it's the hero question we ask all of our guests on the podcast. Who is a woman in your life who has had a profound impact on you and your career?

The one that comes to mind would be a high school English teacher I had. I never felt like I was particularly good at English. Never liked it all that much, to be honest. Love math, love science. I had fun doing all that stuff. I knew I was good at it, but like English, do these writing reports, these book reports. I never had fun doing it. My grades were always not as good on that side of the house. It just made me feel like I must not be very good at this. And I remember this teacher, there was one particular assignment that It just struck me. I liked it a little bit more. I put a little more effort into it and I got a good grade, which was nice. But also she was like, wait, I'd never seen anyone be so creative, et cetera, in such a way. And it was like a light bulb moment went off in my head where I'm like, maybe I do like writing. Maybe I can be good at this. It wasn't like an overnight thing where I like woke up and just like loved writing book reports and stuff like that anymore. But certainly as I think about the last decade plus of running Zapier, I've leaned a lot more on my writing skills. I've learned to love writing. I've written way more than I ever thought I would, and I do like it quite a bit. It comes back to that teacher again, just like planting a seed that maybe there's more potential here than I, I thought there was. And so I'm pretty appreciative of teachers in general, but that one for sure.

Thank you so much for sharing that anecdote and just for being on the podcast today. It's been such a pleasure having you on, Wade.

It was a blast.

Thank you so much for joining us at The Room Podcast. If you want more from The Room every week, subscribe to our newsletter at theroompodcast.com/newsletter. We'll be back next week with a new episode and inspirational guest Tuesday. See you in the room. Perkins Coie supports the most innovative entrepreneurs and investors in fast-moving and high-growth sectors, addressing their myriad of legal needs. But the firm doesn't just provide end-to-end legal and business counseling to its startup clients. It also facilitates introductions to key advisors and sources of capital. Perkins Coie's interactive website, Startup Percolator, offers access to programs, resources, and rich dynamic content designed to assist entrepreneurs on their startup journey. To learn more, go to startuppercolator.com and perkinscoie.com.

This podcast is brought to you by Mercury, the banking platform businesses like The Room Podcast use to simplify their finances. It's time banking did more than hold your money. Now it can. With Mercury, you can pay bills in seconds, close the books faster, and even send invoices. Not only does Mercury do away with a patchwork of tools, it eliminates guesswork, giving you complete and accurate visibility into your business's finances, all from one account. Apply in minutes at mercury.com.