Acquiring Your First 50k Customers | Zapier Co-founder Mike Knoop

And then after you crest this, like, kind of peak of this hill, the boulder starts running the other way. And instead of you pushing, you start chasing. The company starts growing. Like, you get— you start getting customers and you don't know where they're exactly coming from. You're trying to figure this out. You have more people, like, signing up than you know what to do with. There are different types of customers that you've never had before, or there are different types of sales. Like, you're going entering and you're getting forced into these separate types of, like, sales and negotiating contracts, like, not by your choice, but just because people are demanding it of you.

Questions that a lot of the founders here are asking, is the product-market fit question, right? They have these ideas, and we actually had a hackathon 2 weeks ago. So, you know, they have these ideas, they're just a matter of how do we validate it, as well as, you know, because it's, you know, you committed for over 8 years, right? That's a big commitment to make, right? And so—

Right.

Our CEO Andy, one thing he talks about is, you know, be slow to enter, but once you enter, you know, you're in it, right? You're in it for the long game, right? And so can you talk about how you decided this is the right thing, as well as Uh, product market fit at their early stage.

Yeah, it's interesting you mentioned 8 years because like, you know, we're almost a decade in now and I easily can see out the next decade of Zapier's life. Like, startups are a very long game. Uh, make sure that the thing you are working on is something you actually are interested in is probably— I was not very thoughtful about that in the early days. Like, when we were starting Zapier, it was very much like, oh yeah, that's a cool thing. If you really, really would have maybe turned the screws to me and said, do you want to think about APIs for the next 20 years of your life? I don't know if I would have said yes, but it all worked out okay in the end. Product market fit is an interesting thing. I think the best definition I have heard of was by Peter Reinhardt, who's the Segment CEO. There's a great YouTube video he did on this through YC. The basic concept is product market fit is something that you can feel. more than there is an objective line in a metric somewhere that you can look at and say, like, we've achieved it or not. The feeling is, if I can do my best impression to kind of articulate it, is, you know, imagine yourself pushing a boulder up a hill. That is pre-product market fit, where the only progress that happens in your company, in closing new customer deals, in recruiting, in raising funding if that's the route you decide to go, this is all requiring this gargantuan amount of just effort to put into your company and there's no progress without it. If you stop putting in effort, your company stops. Like that's the— that is the definition of not having product market fit. And then as you get closer to product market fit, you start cresting this hill, it gets a little bit easier to push this boulder. Like things start happening even when you're not putting effort into the company. Maybe you start to have a small amount of brand. Maybe you've got like customers that are trying to tell each other. You've got like maybe a small referrals network starting to come in that's getting your brand exposed to more folks. And then after you crest this, like, kind of peak of this hill, the boulder starts running the other way. And instead of you pushing, you start chasing. The company starts growing. Like, you get— you start getting customers where you don't know where they're exactly coming from. You're trying to figure this out. You have more people, like, signing up than you know what to do with. There are different types of customers that you've never had before, or there are different types of sales. Like, you're going entering— you're getting forced into these separate types of, like, sales and negotiating contracts, like, not by your choice, but just because people are demanding it of you. And you have to start chasing the boulder as opposed to pushing, where it's running away from you and things in the organization and your metrics and your customers are happening at just this increasing rate that you have to start hiring in order to keep up and try to keep up with the boulder. The truth is you never keep up with the boulder if you, I think, have really good product-market fit, but you try to. So that's kind of this feeling that happens, that can happen at a change in time. For us, I think that probably happened around, I'd call late 2013 or early 2014. We'd been working on Zapier for maybe about 12 months at that point after launch. The team size was maybe about 8 or 9 people, I'd say. We were not yet profitable, but we got profitable in the next several months after that. That was the point where I felt like things had started to run away from us as a founding team. And as a small company, we started to have more and more of our partners, these apps on Zapier that were reaching out to us asking to get on. We had more and more customers that were coming in that we had no idea who they were. The use cases they were asking about were things that we'd never even heard of before. I'd never even heard of most of the apps that people wanted on Zapier. That was kind of the feeling for us in the moment in time, I think, for us when it started kind of shifting from every single waking moment of the day we're putting effort in in order to move something an inch forward to, whoa, the company's starting to run a little bit without us. We should start thinking about how do we get ahead of this now.

Cool, and then after the— during that 12-month period and sort of the initial product-market fit after that, what are some of the most effective testing and marketing or growth strategies that worked early on?

Yeah, well, our— I mentioned Patrick McKenzie, so we got a lot of inspiration in the early days from his work in the Bingo Card Creator just search engine optimization. Brian White and I came from a marketing company that was the shared company that we worked at, so we had some familiarity with, like, the marketing space on the internet. So, in fact, in the early days of Zapier, before we even had a product that you could come to the website and buy, we had landing pages for all of these different apps because we had some, like, you know, just intellectual understanding of, like, what tools probably people would want to connect if they were trying to integrate software together. We were just, you know, looking at forums or looking at other signals online, customer conversations we were having. So we threw up a bunch of landing pages on Zappos.com called our app directory, and we didn't actually have support for them. We just had an email box on it. This is a pretty common growth tactic now, but back in the day it was still fairly novel. And there was— if you were to go and Google back in 2011, 2012 and type in connect Basecamp and Salesforce, you would get developer documentation, you would get Stack Overflow links, you would get forum posts where people were begging for these integrations. There was like no good answer on search for these, and we realized, well, if we build these landing pages, they're going to rank really high, and we're going to be able to convert those users pretty quickly because it's, you know, very high intent. If I'm going to Google and typing connect X and Y, I'm kind of telling you what I want to do. So we built those. In fact, and like I said, we built those before we even had a product. We used those as kind of our early internal product signal to decide what APIs to go build. The first 50 or 60 integrations on Zapier were all built by the founding team, just the 3 of us, all 3 of us. I think Brian, of course, did the heaviest lifting, but I built probably 10 or 20, and Wade probably another 5 or 10 of them. And those were basically just response to customers writing in and asking. We would try to turn them around as fast as we could in the early days. So people would— we'd have maybe 2 or 3 people requesting that API, and we'd try to build it that night and get them on the phone that next morning to walk them through and say, hey, Hey, it's supported now. Why don't you pay us $5 for this? And then we'd let them into our beta to give it a try. That was— that worked really, really well for us. SEO is search engine, like search is not a short game. That was something that took several years to pay off, but it's something that if you plant the seed early, like eventually it does, it can pay off. Zapier has never been particularly sales-driven. We don't have a sales team. I think this is another way that we're kind of unique relative to a lot of Silicon Valley companies. If you think back to kind of the mission of the company of democratizing automation, if we're going to successfully do that, we need to be having a direct-to-customer relationship, right? We can't be going through a buyer and enterprise that's deploying software on behalf of everyone. We're trying to build a brand that people know about and love, and they know and understand what it does, and they're going to come directly to us to use it. So that kind of colored, I think, some of our early decisions around Okay, we're not going to go hire a sales team. We're not going to go try to scale through traditional acquisition channels like that. We're going to try these very— what might look more like consumer-style motions because we, in the back of our mind, I think, kind of believed that we were building a bit of a consumer business. Despite it being for productivity and for work, the motions look a lot more consumer-y in terms of how we attract customers into the ecosystem through our partners and through landing pages that we've got. And through organic search and organic word of mouth and all those types of things. Now we are starting, as 8 years in, now we are starting to look at more of, as we've grown, we're starting to look at diversifying that further. So, you know, paid acquisition channels like search paid ad campaigns through like podcasts and things like that. But yeah, in the early days it was very, it was very much, can we go like figure out where are these, The question we asked ourselves was, where do our customers live on the internet? We knew we were building internet software because you have to use these tools to connect. So we asked, where do our customers live? A few places we found them asking for things that we thought our software could do for them, we found them on webapps.stackexchange.com asking for, how do I do this little bit of functionality with Google Calendar or with HipChat at the time or whatever it was? We found folks begging for integrations in like the comment section of a lot of our partners' blogs. So Highrise, in their—

when—

this is actually something we found at Startup Weekend. Highrise had written those like blog posts about how they had this new integration with— I want to call it maybe Salesforce or Twilio. Anyway, some company like that. And in the comment section, it was like 500 comments long with their customers asking them for other integrations. They were like, hey, this is great, but I don't use that tool. I use, you know, I use this other CRM tool. I use this other email marketing tool. When are you going to support that? And that gave us, like, a lot of the early validation that, like, people wanted this. Like, there was a very clear demand online for this, and we thought that there was, you know, Zapier could solve it. So often we would go into those channels and just say, like, hey, we try to be helpful and say, like, hey, if you're technical, you know, we wrote, like, a post on our site, or Here's like a small tutorial on how you can connect the APIs together to kind of like do what you want. But if you're not technical and you just, and you just want a piece of software to do this, we're working on this project. Like reach out to us, email us if you want, if you want to try it. And that was how we got our first maybe 500 beta customers or so. It's just this very manual like slog really of like looking, searching for, thinking through where do people exist, going searching those out. Responding, trying to add value to the conversation as opposed to just spamming and blasting our name everywhere. And that gave us enough, like, enough internal confidence that there was something worth, like, worth working on here. So,