Leo Widrich of Buffer: Top 10 Learnings Going to 10 Million

Welcome back from lunch. I'm BJ Lachlan, the CEO of Lighter Capital, and I'm really pleased to present today Leo Widrick from Buffer, the co founder and COO of Buffer. I'm sure almost everybody here knows Buffer. I've been an active user of Buffer for years, and I'm sure everybody here knows a little bit about Buffer, that they have an incredibly transparent culture and are very straightforward and. And they also are an entirely distributed team, which might be an interesting thing for lots of you to know. They now have 80 employees spread throughout 40 different cities, and they get together occasionally. In fact, I was just telling Leo backstage, I think they really do that so that he can get good trips to Hawaii. Anyway, Leo is here to present the top 10 learnings getting to 10 million. I think it's going to be a really great presentation. I think you'll really enjoy it. So if everybody can find a seat, we'd like to get going and welcome Leo out here.

All right, man.

Cool.

Hello, everyone. Just put this down here. So awesome to be here. I remember the last few years that I was following along with Sastor. There were so many great talks. I watched them on YouTube. I was talking with Jason about it, and I was always like, oh, I really want to attend. And the fact that I can come and actually give a talk is a real honor. So I'm really pleased to be here. For context, BJ already gave some great info. Who in the room knows about Buffer? Quick show of hands. Who's a user of Buffer? All right. The person in the back was slightly unsure. Maybe they will churn soon. We can talk later a little bit more about that. Yeah. As a company, we build social media management. Social media management tool. We help you schedule, we help you organize all your social accounts. Twitter, Facebook, LinkedIn. We help you schedule posts, we help you collaborate as a team. That's sort of what we do from the product side of things. As a company, as BJ mentioned, we are about 75, 80 people. I'm keeping losing track of things. We've been going for about five years now, so we've been around for a little while. We are a company completely remote, as Biju mentioned, across five different continents, over 40 different cities, and we just hit 50,000 paying customers a few days ago, which I'm really excited about. From a numbers perspective, when Jason and I, we brainstorm on this talk, we said, like, okay, let's do top 10 learnings going to 10 million, and said like, oh, we're not quite at 10. So we're at about 8.9, almost 9. So we're estimating that we'll get to 10 by March. So that's why I kind of tried to change the title slightly and go to Almost for today's talk. Yeah, I want to give you 10 lessons. I want to help you with some more tactical things. There's some really great high level stuff going on and what my goal really is across marketing, product, general business practices, I would just want to like really try and dive in so that hopefully most of you in the room will be able to pick one or two of those things up and tomorrow try and implement some of those things and see if that helps you build a better company. So let's dive in. 10 things. Here we go. This is the first lesson that I want to share, which is my co founder Joel introduced me to the idea of a weekly mastermind with myself. And what I find interesting when we work on our startup is that oftentimes we work on the startup and we rarely work on the relationship between our co founders or between our early team members enough. And so it was really useful for me that Joel helped me introduce me to this concept. And we've been doing this for the last five years once a week. And it's totally transformed my relationship with my co founder. So this idea of actually working on the relationship with your co founder, with your other team members as well as on the company, I think it's quite counterintuitive, especially early on. And you know, I see a lot of startups founders that come to me like we know each other so well. You know, I work with this guy, I work with this girl all day. We know everything about each other. And I think that's a trap, a really easy trap to fall into that we've fallen into where if you don't zoom out, a lot of things can sort of build up. And this is how this works, this is what Joel and I do. So the first thing is we try and take about one or two hours where we try and find a time that's slightly less busy. So on a Friday evening or an off day on a Sunday, we try and get together in a coffee shop in a really casual setting and then we take 10 minutes and we talk about each other's achievements. And what I love about this point is that oftentimes, especially early on when we're building our businesses, we don't take enough time to reflect on the things that we have accomplished. We always think about what else we want to do, what else we can get to. And I think this can be really powerful to avoid sort of burning out and actually say, hey, I know everything is falling apart at the same time. Here are some things that I'm actually proud of that are actually going well. And I think that achievement section has helped my personal happiness a lot throughout the years. Then we move on to challenges. We talk about each other's challenges, we talk about personal challenges, we talk about business challenges. This is really a session to get really deep into some topics. The one tip here, if you experiment with that, is to sort of avoid solving each other's problems and instead really practice listening and the Socratic method, which is sort of to ask more questions and to really let that person come up with their own solutions instead of you trying to like, oh yeah, you should do this. And lastly, we have this section about feedback for each other again in the day to day when you so zoomed in, we stop actually sometimes zooming out and talking about some of the things that bothered you. And I think it can be really useful to have that point number two, something really powerful. And there's a lot of sessions today around data, how to use data. And just in general, I think there's so much that we learn on a day to day basis how to use data. I actually believe that it can be such a huge distraction early on when you're building your company where you get too focused, too narrowed in trying to look at charts or look at numbers, when it can actually be much more useful to focus on the more qualitative stuff instead. And I have this quote from Heaton, he spoke here earlier, which I really love. He talks about the importance of actually using more qualitative data and not relying on quantitative data. And what I love about this quote is actually that Heaton said it because Heaton is a guy who sells you analytics software. So if a guy who sells you analytics software tells you to not use analytics and data that much early on, I find that kind of double encouraging. And so if you can sort of try and take a step back, especially early on when you don't have what Heaton talks about here, thousands or hundreds of new customers every month to really focus on more of the qualitative insights, then I think that's a big recommendation that I want to make. And that's actually my next point of how you can do that better. So this is about learning to talk with customers. And what I find oftentimes when I talk with, with some founders and early stage companies, we have a lot of core functions in the business. Right. We all know about marketing, we know about product, we know about sales, and we know about customer service. So we know that's when we talk with customers. And what's interesting is that whenever we do have those things, none of those four things usually touches on simply sitting down and talking with a customer about their problems. And that's what I think customer development is. Even though there's so much written about it, I think it's still not quite incorporated enough. And I hope these five questions can be potentially useful to people to try out. They come from a book called Lean Customer Development by Cindy Alvarez. And I can highly recommend getting this book because there's way more in that book beyond those five questions, which are also from the book that just really teach you on a fundamental basis how you should talk with customers. And, and I think we oftentimes again have this assumption. It was certainly true for myself. I know how to talk with customers when really there is so much to be learned and improved. And these are the five questions. There is one thing when you read through those that I think is really interesting where you won't find any sort of what in customer development we call leading questions. You won't find any questions here that are, would you buy this if. Or would you use this sort of these questions that bias the person already to say yes, which we really want to avoid. And the one particular one that I want to highlight here is the magic wand question. It's one of my favorite questions and what I found is that everyone sort of loves to be a magician every so often and to really try and think about what is even possible with this product. And it can feel slightly embarrassing if you feel like, oh, but I don't want to. It's a professional setting. I don't want to give, would you use a magic wand? What would you do? But I found this really, really powerful to actually induce creativity from the customers you're talking to. And I want to make one more final point on the data. So avoid being sort of distracted by data early on trying to use these questions, but then also sort of as your company grows, as you hit that point that Heaton talked about. When you actually get to the hundreds of thousands of customers every month, then one thing we've learned about data at Buffer is to try and keep the data in house. This is Buffer's quick journey with data. So from 2010 to 2011, everything was in house. And Joel built those tools early on. And 2012, we sort of experimented with various third party tools. Kissymetrics Mitzvah. Then we moved back to building our own tools. Now we transitioned last year again to another tool called Looker. I think they even have a booth out there. And throughout this roller coaster ride of using different data tools and really trying to learn how to best make use of our data, the one lesson that we've learned, frankly in a very hard way, is that you always want to keep at least one copy of your data in house. And there is a lot of people in a company that sometimes will walk up to you and say you shouldn't do that, right? There will be some engineers that come to you and say like, well, we already sending that data to this tool, we don't need to store that or we don't want to hog our servers with this data because we want to have real time data here. But in our case that really can sort of really was biting us in the ass at a point where we were like not able to have a certain mercs make certain decisions anymore because we didn't have all the data in house. Because no tool that you ever use out there ever is going to be an analytics or software tool for your particular business, right? We're all here in this room because we're trying to grow our companies and make it scale and make it fit multiple use cases, whereas your company is, there's only one like it. And so therefore, I just want to give you this one lesson from us that we learned keeping that always in house. Even if you have people saying it's a waste of time or a waste of effort or a waste of server cost, it's so useful to at some point come back to that. This next one is a really interesting one about marketing and I think it's quite counterintuitive. I had a discussion earlier on with some people about this from my friends at Feedly, right in the front row there. And we talked about this from the perspective if you go and do marketing, should you pick one channel and if so, how and why and how do you get there? And I see a lot of this idea around, like spray and pray, right? You're an early startup, you're just like, let me go and just see what sticks. Let me try every marketing strategy in the world and see what works out for us and then I'll keep some of them around. And I think that can be quite less than ideal in many cases. And at buffer one of the things we've done early on we picked a single strategy only and that was content marketing, nothing else. No paid no SEO, no nothing. We just did content. Content every day, at least for the first year. And then over time, of course, you branch out. But looking back, that was one of the, in hindsight, very, very good decisions that we made because it kept us so focused and so on track. And there's this exercise called the Bullseye Exercise by. It comes from a book by Gabriel Weinberg called Traction. I can highly recommend that book, by the way. Again, it's super, super useful. And Gabriel talks about these three steps to finding your one channel. So the first one he talks about is sort of the outer ring of the bullseye, where you talk about. He identified 19 different channels, and he. You try and not try and go after all those 19, but just you want to write them down and at least brainstorm on them. And then he says, like, okay, pick three or four that you think are most promising from either. From early data that you already have and try and run some cheap tests, right? So for about three to four weeks, run some tests, see what works. And then he says, okay. And then finally, pick one and really be disciplined with yourself and not say, well, you're kind of getting a little help from SEO and a little bit from. From paid, so we're going to do both a little bit. He says, be really disciplined with yourself and pick one. And there's three reasons why I think it's so important to be disciplined with that. And the first one is sort of what we call the marketing flywheel, which is this idea that when you start working with just one channel, you create this early repeatability, which really helps you to create this momentum and build sliver after sliver that then eventually turns into the curve that we all want. And the second idea here is with early repeatability, what you really want is become good at marketing, right? And so if you pick two or even three different channels and you don't have. You just don't build up the expertise early on. You spread yourself too thin. Whereas a buffer, for example, we have so much to learn with content. There's so much further for us to go, but we feel so much more comfortable because we've just doubled down on it so much. And so we feel our expertise there is so much stronger. And then sort of the other idea of the marketing flywheel is that you can actually step away. Like right now at buffer, we could step away and stop doing content for a while, and we would still reap those benefits that are sort of going on even if you don't keep doing it. This next one is a really, really difficult one. For me personally, that's almost like advice for myself. I don't know if everyone kind of feels that way, but here's how I operate. I'm sort of. I listen to someone that I'm inspired by, and I'm hooked. I'm like, okay, like, I'm going to do exactly what this guy's successful. This guy has done this before. I'm going to go exactly after what this guy just told me. And I think one of the lessons I've learned is that that can be really counterproductive to building an actual, real, authentic business where you sort of creating your own path along the way. And so one lesson I've learned is that now every time there's a big decision, you know, should you raise funding, how much should you raise? Should you hire that person in that, you know, VP of sales? Is it too late? Is it too early? Whenever you have those big conversations, try and get two opposing opinions that you really respect. And in the past, I would talk with someone and be so hooked. And now my immediate goal is, after I've had one of those conversations, is to immediately go and talk with someone who I know will disagree with that. And that sort of leaves me with the idea that now I've heard two exact opposing opinions from people that I respect, and I'm forced to make up my own mind. And I think that's such a powerful position to be in, to really, you know, keep you empowered as a founder, not to just copy and paste. And we all know that, like, the persuasiveness that authorities have, you know, if you're in a room with Elon Musk, like, of course you're gonna, you know, do whatever he tells you to do. But if you get a chance to then talk with Jeff Bezos the next day and he tells you something completely different, you'll be much more easily able to come up with your own solution. This is another one that's sort of a lesson for Buffer. It's like that we want to do better ourselves, which is to really be much more adventurous when it comes to changing our pricing. And I feel that oftentimes we're so zoomed in, we're building great features for our product. We sort of neglect how much more value you're building. And that value can actually be translated into a higher price point. I think it's one of the most neglected but most powerful changes you can make at your company. And another problem that I've seen with making pricing changes is that we have a Huge barrier in our heads. We feel like there will be huge backlash from all our customers or if we change our pricing, no one will start wanting to pay us anymore. And so we have all these things in our heads that make us like, okay, let's not touch this pricing page anywhere near enough as much as we should. And I want to give you just some real data of some of the things we've done at Buffer where this is. We've done like many pricing changes again. We actually haven't changed our pricing again for a while now. So we actually want to be in the middle right now of experimenting with that again. But we went from like this $5 and $20 in free to free and 10 and the business plan and the enterprise plan now. And when we switched from the $5 to the $10, we had a zero change in conversion rate. So we literally doubled our revenue from one day to the next without losing a single customer. And that's just so fascinating for me to be like, all these days when we were worrying that no one will start paying us anymore, we were building all this value to add to our product. That was just really eye opening for me. So, like really working with your own, our own biases. Health has helped us a lot. This is a very strange phenomenon I see going on at startups and I feel like I'm bringing up Heaton a lot, but he's a big mentor and advisor and investor in Buffer and had some great conversations. And Heaton, actually, I think he even called this sort of, I don't know what he said. Like, it's like a law or something. And the law, let's call it Heaton's Law. And it goes something like, startups use the Lean Startup methodology once and then never again. And that was certainly true for us at Buffer. And honestly, I don't know why. Sometimes we feel like, okay, at Buffer, we feel like we have been disciplined at starting and launching our product with the Lean Startup, like creating hypotheses and not building, but actually talking. And then after a while we are like, we're getting some traction. Maybe that's when we get some traction that we're like, oh, now we know what to build. Now we can just go and build features and we know what's next and it's kind of obvious and we sort of stop being disciplined. And the Buffer, that created a lot of waste. So we had a period of time of almost a year where we just ended up building features with. Even though first, in the very first iteration, we were very Disciplined where we stopped using the Lean Starter methodology. And this was really what helped us get our startup mojo back, is what I like to say, which is when we built a new product line, it's called Buffer for Business, and we started to be able to really be very disciplined again. And what you're seeing on screen here is the actual pricing page of the first version. This is literally a Wufoo form, which was the first sort of pricing page. So people would select which plan, they would put their email in, submit the form, and we'd reach out to them. So this was like super, super Lean at this stage. And we really went back to interviewing customers, building MVPs and doing all the things we all know in this room, or many of you will know about the Lean startup and really being disciplined about it. And Buffers for Business is now doing 45% of Buffer's total revenue. And so this has been really successful for us to take that approach here. And this is what we started to do. We really started to create a process around it. We said, no more. We don't want to keep falling into this trap of building things. Let's really institutionalize this. How are we going to do it? For context, we talked about customer development earlier. We have four people full time at Buffer now who do nothing but customer development. So all day, every day, they talk with customers. They don't try to sell them anything, they don't try to do customer service, they don't try to market. All they're trying to do is to understand people's problems. And, and I think this methodology has really helped us. We want to have a hypothesis for every feature that you're building, something that by definition, therefore can be invalidated. So after you go into a customer development phase, it can happen that you stop building this feature because you realize your hypotheses were wrong. And the next step for us, again in this new process of being diligent and more disciplined is sort of a. We love InVision to create sort of clickable prototypes. It's a great product. Many of you probably heard about it for design, and it helps us to get feedback. Again, we are the third stage of building a new feature or a new product, and we still haven't written a line of code. And then the fourth version is sort of roll out a version that you're slightly embarrassed by of the first feature. And I think this line, I think this famous quote from Reid Hoffman around, you should be embarrassed by your first version. I think that also gets misinterpreted A lot, because you shouldn't be embarrassed by it from, you know, if it completely breaks and, you know, it's completely unusable, that's the wrong type of embarrassment you want. I think the type of embarrassment that's good is embarrassment of richness. Right? You're kind of embarrassed because it's only this one feature and you wish you had done three more. But that's really the type of embarrassment you want. Where it's complete in itself. We often talk about, like, it should be, like, not the base layer of a cake, but it should be a cupcake, right? It should be. And a cupcake in itself is complete. And I think that's really what you want when you're slightly embarrassed with the version that you then roll out. Number nine. This is really interesting for me personally. I feel like that almost gets me to a spiritual level whenever we did get offers to sell Buffer. So throughout the five years of Buffer's journey, we had four offers, serious offers to sell the company. And every stage was really, really difficult for us to really figure out whether this was the right thing for us or not. And oftentimes we talk about selling our companies. We think about, how much money would I make now versus how much money would I make if I keep going and I don't sell right now? And one thing that's really helped us at Buffer is we did a list that talks about what are the experiences we would be missing out on in. If you were to sell now. And sort of that change of focusing on personal growth and Einstein's idea of becoming a person of value, I think is really what helped us navigate those decisions better. If some of you are in those, experiencing some of those moments, and these are actual things that we listed when we got offers to sell and we listed what we wouldn't learn, we wrote down we wouldn't learn how to scale to tens of thousands of customers, how to let someone go, how to acquire another company, which we've now done a few months ago. We wouldn't learn how to recover from a hack. And the reason I think all those things are interesting is that we want to be people that are able to offer some of those experiences to other people. When they come and call us, I want to be the guy like, let me call Leo. He's been through a hack. He's knows how to let someone go. He's been through this. And, like, that's really the type of. You know, for me, the aspiration of, like, who do I want to be from a personal growth Perspective that goes beyond sort of like, okay, how much money do I have in my pocket? Even though like, you know, financial reward is still very something that I'm interested in. But at the same time, this sort of helped me frame the question a little bit better. This quote from Dharmesh, one of our awesome advisors and investors as well, is something that helped me with that. Instead of stop thinking about making a million dollars, start thinking about serving a million people. The same idea, same framework, and it's been really, really powerful for us. Cool. And the 10th lesson I actually left open because we're not quite at 10 million, so I thought it would be kind of unfair to have 10 lessons. But what I do want to do is if you go to open. Buffer.com, you can drop in your email and as soon as we hit 10 million, I'm going to have a 10th lesson for you. It's just going to be slightly delayed, so I'm scheduling that one out into the future. We have some experience with that and yeah, that's really it. Thanks so much. We do a lot of things like BJ mentioned are very transparent. So if you go to buffer.com transparency, that's how a lot of people learn from us, which I'm really, really grateful for, if that's useful for you. We have transparent revenue, transparent pricing, transparent equity, transparent salaries, everything on there. If you want to talk with me more one on1, it's LeoBuffer.com or hit me up on Twitter, Instagram @Leowid. But thanks so much everyone. This was really fun.

So we've got a little more time for some questions, a couple minutes here. So people want to raise hands and ask a little questions.

Great.

That was great, Leo. It was awesome. Ten lessons are nine plus.

Anyone got one over here?

Hi, I'm Prateek and I'm from India. I've come here to like Learn more about SaaS as like Indian companies are also building a lot of products. Now one question I had regarding companies like Buffer that start off like solving a very specific need for like you could say like a niche SaaS segment is like when you look at companies normally like consumer companies or otherwise, you think about entry barriers, you think about like switching costs and a lot of those things which are not very clear in like Pure Play SaaS products because a lot of people can like hypothetically build something very similar. So how do you think about like growing this? Is this something on your mind? Like what do you think about to mitigate such risks and, and do you even think that's a big risk?

Yeah, I guess it comes into competition and other companies. It's really interesting. I can never know whether because we are so oblivious to competition at Buffer, whether we are ignorant or whether we are arrogant or whether we are naive or some combination of some of those three things. But truthfully, it is never on my mind. I never think about it. There are other great players in our space that we really respect. And for us, we have such a focus on. We want to focus on our customers, we want to build features that are great for them, we want to do great marketing to reach new people. I'm so focused on just providing value to people that it's a huge distraction for us to think of, oh, what if they don't like this? You can fix all those problems by actually focusing on your own customers. I know it's a non answer, but it's kind of like I don't spend a lot of time thinking about that. And it takes some practice. We all like, oh, they're building this or our competitors are going to eat us. I think working through that, it can actually be more useful than trying to do something that's not focused on your own customers.

You guys are so strong in content marketing too, that it probably helps keep away the competition a bit. Maybe I have time for one more.

Yes here or no? Sure. What's happening? All right, thank you. I'm very interested to know, like, I think you guys had already did two acquisitions. I'd like to know whether there was a strategy behind that because like let's say you're pre 10 million dollar revenue. So what was it for buying a team? Was it for a client, Was it for product? So what was the whole strategies behind those two acquisitions and whether was the value out of them? The value for us with the acquisition that we've made was that for a while Buffers in the publishing space, like we help you publish to social, we help you analyze, we help you be very sort of marketing focused. And we got a lot of feedback from our customers that said like, hey, we really want you to build a tool for engagement. We want to reply to tweets or reply on Facebook. And so it's really again, very customer driven. And so we always said like, okay, we might get around to building that, we want to build that in the future. But you know, it's like kind of like you don't want to spread ourselves too thin. And then when the opportunity came along with respond and they were sort of interested in sort of moving on. And we always had this in the back of our minds. We built a simple model. You can even Google that. We made some of that transparent. We made a model that said like, okay, how much would it cost us to build this product versus how much would it cost us if we buy it right now? And the numbers worked out and so we felt like this is a space we don't want to move into. And we ran the numbers and we created a model and we moved ahead with it. So we tried to be as rational as we could instead of like, oh, let's just jump into this. But this was always something on our minds. This is something we've heard a lot from customers. It's very customer driven.

All right, I think we're out of time. Justin, Leo, thanks so much.

It was great. Awesome.

Classic to the buffer culture. Very open with some great lessons.