Contrarian by Design: Wade Foster’s Vision Behind Zapier’s $5B Business

I think oftentimes people think of product-market fit as this like sequential thing where it's like, we're going to start with the product. Once the product's good, then we're going to start working on the market side of it. And then the fit thing comes third. But from— I've always thought of it as like, it really is better when the product and market is actually like, it's a reinforcing mechanism. It's not two distinct things. It just, it all just works together. Um, in a pretty magical way. Uh, and I can be honest, that's hard to do. Like, but, um, you know, I think there's a— there's— you look at the best businesses, I think they all kind of have this dimension where they sort of just are symbols.

Everybody knows, or thinks they know, what it takes to build a $5 billion company. You need to come to Silicon Valley, you need to raise a lot of money, you need to hire top talent from name-brand schools, you need to have the fanciest pedigree and the most most elite investors. But what if what everybody knows is totally wrong? Well, you can judge for yourself in today's episode where we're going to talk to Wade Foster, who's created a company called Zapier, who's done things just about the opposite of the typical conventional wisdom and yet has had tremendous success. A lot of companies like to brag about how much money they've raised. Zapier likes to brag about how little, raising just over a million dollars. Despite its multibillion-dollar valuation. Today, Zapier has only 750 employees, but they serve hundreds of thousands of customers.

And they're part of an emerging trend of companies that have been able to scale their impact without growing headcount.

They have been a fully remote company since long before the pandemic, and they have a distinctive culture that is, well, as you'll see, a little bit different.

Wade took the company from Columbia, Missouri, where he was from, through Y Combinator, and yet didn't change his business-building philosophy. You'll still see the humility, you'll see the first principles thinking, and you'll see the commitment to staying close to customers through the entire 13-year journey of building Zapier. I hope you'll enjoy this conversation with Wade Foster. This episode is brought to you by DigitalOcean, the cloud loved by developers and founders alike. Developing and deploying applications can be tough, but it doesn't have to be. Scaling a startup can be a painful road. But it doesn't have to be. When you have the right cloud infrastructure, you can skip the complexity and focus on what matters most. DigitalOcean offers virtual machines, managed Kubernetes, plus new solutions like GPU compute. With a renewed focus on ensuring excellent performance for users all over the world, DigitalOcean has the essential tools developers need for today's modern applications with the predictable pricing that startups want. Join the more than 600,000 developers who trust DigitalOcean today with $200 in free credits and even more exclusive offers just for listeners at do.co/eric. Terms and conditions apply. The Eric Ries Show is brought to you by Mercury, the bank account I actually use for my startup. I've been around a lot of startups and a lot of fintech products over the years. People often think the way to simplify the complexity of finance is to add layer upon layer upon layer of software and automations and workflows.

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First of all, thank you for coming on. I mean, I really appreciate it. And I just think this is such a great story. I'm really excited to share it. So, you know, I live in Silicon Valley and I am surrounded by contrarians, you know, and almost like to the point that they're all contrarian in the exact same way and they can't stop talking about how contrarian they are. They're building their companies in the same way. It's really, to me, kind of amusing. And when they say contrarian, I don't think they have what you guys have done in mind. You've built the company in a totally different way than conventional wisdom says you should. And I'm curious, before we get into kind of the what of it, I'm curious about the why. You know, how, how did you have the, the idea that you should do things in a different way?

You know, I think it— we're probably, like many of us, we're a little bit of a product of our environment. Um, I'm not sure that it felt all that weird or different to us. You know, that myself and my two co-founders, we worked at this company Veterans United in Columbia, Missouri, before we started Zapier. And that business is owned 50/50 by two brothers. They never raised a dime. I was employee 500, and when I left 10 months later, when we were starting Zapier, there was 1,000 employees there. You know, they were selling mortgages during the financial crisis and growing like crazy. So you sort of look at that and like, that was our that was some of our formative experiences. You know, the companies that we were following online were folks like 37signals and Mailchimp and, you know, GitHub, like we're using these products and like, that's sort of like our point of view. And, you know, when you think about building a software company, being in the middle of the country, it's not like if we go start a company, there's people throwing millions of dollars at us to go found this thing. It was like, No, we think we got to make money. Like, that's— if we want to have a company, the company's got to make money because otherwise we're not going to eat. And so that just seemed pretty obvious to us. And that's sort of where a lot of the ideas started was just kind of from like that simple thesis, or I guess like those simple, like, like people we had to look up to, the companies we had to look up to.

But you did eventually come out to Silicon Valley, did Y Combinator, you encountered people who have a very different idea about company building. What was that like?

Yeah, so, you know, we— the one thing we did follow in Silicon Valley was we were like Hacker News readers, and we read Paul Graham's essays. And so we were a fan of that. And we felt like, okay, we're building this company that's trying to integrate all these different apps. Probably would be helpful if we had more exposure to the people that are running these companies. And we're like, well, YC is probably a good way to get a little bit of that, like, stamp of approval, help, help do that. So we went through the, the application process, we actually got rejected the first time we did the YC thing. Second time we did, we got out there, we come out and we go through the program. And it's a great experience, learn a lot of stuff. But there's also some things that we start to hear that just like, is presented as like, the gospel truth that we had, like examples that just totally refuted it, where it was like, oh, no important company has ever been built without doing XYZ thing. And we're like, well, we just came from one that was, so that's not true. And the moment you hear that, it actually starts to call into question all the other wisdom that you're hearing from this person. Because you're like, well, what else are they sort of exaggerating? In this process. I think we just sort of had this like healthy skepticism of like everything that we were hearing and really trying to just like trace back like, why are they giving that advice? Like, why does that make sense to them? And so you sort of had to go back and look at like the company and the situation and all the things that they were in that caused them to say, oh, that is it, to draw that conclusion. And we hear it all over the place. It's like around raising money or whether you should have an office or be a remote team or, you you know, whether you should have a sales team or no sales team, like you just hear all these like things that are given out as like, well, of course this must be the way to go do it. And we were always just like, are you really, really? Like that was just sort of our, I don't know, default skepticism, I think at the end of the day.

All right. Well, I've always appreciated your aw shucks Midwestern way of talking about how you did these things differently. And it, you know, just wasn't really an act of greatness on your side, your part. It was just, you know, you're a victim of circumstance and you had that skepticism. But I gotta say, I've, been around a lot of entrepreneurs over the years. And there is a certain courage that is required to do things differently. And when an authority figure tells you to do it a certain way, to not say, well, I guess there's something wrong with me and I must be doing it wrong, or even to feel like, gosh, to get the status that these people enjoy, I have to chase their idea of what good looks like, but to stick to your guns and think from first principles. So I just, I'm curious if you can talk a little bit about where that comes from. Like what, what, what's in your background that gave you the courage to do that and made that seem like the natural thing to do instead of the more common thing, honestly, which is just to start chasing status and copying what other people are doing?

Yeah, I never like, I shoot, gosh, I'd like psychoanalyze here. Um, you know, I think like I never cared too much about like being like the popular person, I guess, at the end of the day, it was just like, I just wanted to, you know, I just was always like kind of competitive and I wanted to win. And it was like, let's go figure out the right, like, how does the system work? Like, I just, that kind of person was like, how does this actually work? And it was like always a bit of a like game to go figure those things out. And so, and then maybe like also like a little bit of laziness too, at the end of the day, whereas like, I always just like, what is the fastest route to get this done? And so like, if you're going to go try and build a company, I didn't want to do anything that didn't matter. Like, if it didn't matter at all, I was like, I just don't want to do it. I want to do the stuff that actually matters. And so, you know, when you think about like, you know, the decision to go remote, it was like, gosh, like, got to go buy an expensive office. You got to go find a lease. You got to go figure out how to, like, navigate real estate and all these things. And like, we barely have product market fit. I'd much rather be doing customer support right now. I'd much rather be like shipping product features right now. Than like going and figuring out this other thing when us working out of an apartment with a Wi-Fi connection and using, you know, Google Chat and Campfire and the tools of the day were like working fine. Like there was no issues with that. And so that's where we spent most of our time is like we just spent a lot of time with our customers and like helping them out. I don't think we spent all that much time hanging out with like these other folks who were kind of like playing startup or like pretending that they were like You know, it was like, nah, like we're, we're— and so like, you kind of— the people you're around are the ones that rub off on you. And like, we're around our customers. And so like, that, that's kind of what we did, I guess. So, uh, I don't know if that's like the exact reason why, but that, that's probably how I think about it in hindsight.

Well, I totally relate to that. I, I really remember, um, when I was early in my career getting all this advice from people about, yeah, as you say, the gospel truth of startups. And a lot of it would be of the form, you know, Steve Jobs did this thing this one time, or, you know, everyone knows that this is how it was done. And And I always had this kind of thought in the back of my head, which was, okay, even if I grant the premise that that thing did happen at that time, how do I know that it applies to me? Like, how do we know that what worked in that industry will work in my industry or what worked then will work now? I used to think, how do we know that that person was successful because of that thing versus in spite of that thing? Think about like the, you know, horrible behavior that Steve Jobs would subject people to. People think, oh, he wore a black turtleneck and he was a bit of an a-hole to the people around him. I guess that must be why he succeeded. And, you know, maybe, but maybe he succeeded in in spite of those things? It was all these kind of questions. And I would press people for answers. And they'd often look at me like, "Why are you asking? Just, you know, just follow the rules. Because if you follow the rules, you'll look the part, you'll raise the money, you know, like you can fake it till you make it." I always found that so, so unsatisfying. So I have to say, you know, having watched you guys grow from afar and, you know, now you're a classic, you know, overnight success 10 years in the making or longer now. I've always admired that about you and about the company. So I appreciate you starting with that. Can I take you back to Missouri? Because, you know, when people think of your typical $5 billion company and how it was started, you know, in technology, I don't think Columbia, Missouri is the first place that comes to mind. So how did you wind up there? And how did you wind up starting a tech company, you know, way outside of the Silicon Valley ecosystem?

Yeah, well, I grew up in central Missouri, 30 miles south of Columbia, actually, in Jeff City. And, you know, Columbia is where the big state university is, University of Missouri, Missouri Tigers. You know, came time to like go to school. It was like, yeah, it's like that's the big old state school. That's what like it's where everybody goes. It's like what we could afford, like, you know, kind of was like the default choice. I also didn't know what I wanted to do. And so like a big state school made a lot of sense because it was like, yeah, a lot of stuff. If I change my mind, I can go change my mind. Fine. So went there and, um, you know, kind of for like the first few years of school, like just kind of floated around, just, you know, just enjoying time, trying, you know, being a good student, all that stuff. But not like, didn't, didn't have like the sense of like, oh, I'm gonna go start a startup. That's like, I definitely didn't have that like driven attitude that you hear from, you know, a fair number of folks. The, the thing that really sucked me in was, um, kind of like the confluence of two events. So one summer I had an internship at a big telecom company, massive telecom company. And I remember that experience was, you know, I'd show up and, you know, first hour of the day I'd do all my work and then not have anything else to do. And the rest of the day I'd be like, well, I guess I was like goof off on like ESPN or something like that. And like for a couple of weeks I was like, wow, this is pretty cool. Like, this is great. But then after a few weeks I'm like, is this it? Like, is this what is this? Like, I don't think this is all that satisfying, honestly, over a long haul. And my boss was like, Wade, you're doing amazing. You're doing great work. Keep it up. Great job. And I'm like, I don't— I think I'm kind of phoning it in. Like, I don't think this is actually like amazing. And so that kind of was like, I really don't think corporate America for me, honestly. I was like, I, I just don't think it's going to be a super satisfying path. Um, then, you know, the following summer was like a financial crisis hit. Nobody's hiring, you can't get a gig anywhere, etc. And I'm starting to like, you know, just like hanging out online, doing more stuff, and like, you know, kind of stumbling into like some of these online marketing things. Like, hey, Google AdWords, you can have a website and you can kind of put this thing on and you can start making money. Well, that's kind of interesting. I wonder how that works. And Anywho, one thing led to another and I found this local edtech startup that was doing a bunch of stuff with like natural language processing, like automating, like automatically like grading, like, like school essays, things like that, which, you know, now in the world of ChatGPT feels like so quaint. But at the time it was really hard. And so they were looking for a marketing intern. I didn't know anything about marketing, but I was like, I've been kind of reading up on like all this stuff online and I was in engineering school, so I was like, I'm smart enough, I'll give it a try. And, you know, they brought me in and I was— I, I got hooked, like just hook, line, and sinker. It was so much fun to build software. I was like, this is like we're working out of a professor's house. Like, we're— it's just like weird and different, you know, started using this online software, like the fact that like you could put a website up and someone like halfway across the globe would buy it from you. I was like, holy cow, this is amazing. Like, I cannot believe that this stuff exists. I had no exposure to this, like, in central Missouri prior to this. And here I am tasked with, like, doing marketing for this company. And I remember thinking, okay, what do I— what do I got to go do to figure this out? And so I start trying everything, every trick. I was reading up on everything. I was like, okay, I'm going to try SEO and try content marketing. Social was starting to become a thing at that point. I'm going to try that. You know, none of this stuff is working. I try email marketing, try biz dev. I was like, I'm going to try direct sales and try calling folks. None of this is working. And I'm convinced at this point, I'm like, they're going to figure out that I'm just really bad at my job and like, I'm not going to— I'm not going to keep my job. There's no way. Like, how, how, how should I keep my job? And, you know, I started to mess around with product management, started to pay attention to who are our customers. Like, we don't have that many customers. Why do they like us? Do they not like us? Stumbled across your stuff, stumbled across Steve Blank stuff, and started to get a little more curious and started to think, well, maybe it's actually not marketing that's a problem. Like maybe we're just building something that nobody actually wants at the end of the day and started to like, you know, spend a lot more time talking to the actual customers and really trying to understand like what are their actual problems, what are the things they care about? And again came to the conclusion, I'm like, I don't think we're building something that someone wants. And if you looked at what we were doing, it was the company was run by a professor who was scratching his own itch. It was a, it was a research project for him versus like an actual commercial endeavor, which like he was having a great time with it, like, and, you know, was really happy with the path that was going on. But for me, I was more interested in seeing like, hey, how could we build this, grow this, etc. And so that's when I started to like get hooked on this concept and met my co-founder Brian, who was playing jazz, and I'd played jazz as well too. And so he and I just started hanging out more, doing a bunch of side projects, pitching each other ideas back and forth. You know, we're doing WordPress plugins, WordPress sites, anything to make a buck, you know, reading the same books, following the same folks, and knew at some point in time, hey, maybe if we could go do something together, we would. And, you know, I went over to Veterans United because he was working over there. They have this legendary marketing team. And I was like, well, at least I could figure out how to be a good marketer, show up and work with them for a little while. So did that. And one thing led to another. And Brian one day pitched me. He was like, hey, I noticed that when you go to all these software sites and you see their forums, there's always customers asking for integrations. They're always saying, when are you going to have an integration with X? And you go read the replies from the customers and it's full of plus one, me too, I really want that. And then eventually you get, you know, 10, 10 replies and 20 replies and a product manager chimes in and says, hey everyone, thanks for the feedback, we really appreciate it. We'll take a look at it.

We'll take it under consideration and prioritize it accordingly.

Yeah. And I was just like, this ain't ever going to happen. And so that's where— and I was working with the Marketo API at the time and I'm a bad engineer. I— it was this old school soap whizdill thing. It was just— I'm not— and I'm like, oh my goodness, if Brian was like— I was like, if we built this, I would be customer number one. I know that I would want this. We have all these examples in these forums of people wanting this thing. And so that's like— that was the genesis of this idea of just, you know, three of us sort of hanging out in Columbia, Missouri, and just like kind of just go figure out how to build a— build a cool product that solved this, like a product that solved this problem we observed.

That's such a great example of something that I know a lot of people struggle with. With because you, you told us two different stories that superficially sound the same. Here you have a professor who was scratching his own itch, and because he was building for himself, there was no market. And yet here you're saying that, um, you're— the fact that you know that you would use this product if it existed is a sign that it's a good product to build. So those are clearly not both examples of the same thing, and yet it sounds both like scratching your own itch. So, so just help people understand the difference between what you saw there and what you saw here and how you think about— like, people talk a lot about founder problem fit, or, you know, like, there's always lingo and stuff to just talk about. Like, how did you know that it was a problem that you, you could commit yourself to, to want to solve, and you felt it would be worth solving?

Yeah, I think, um, well, with the first one, you know, I had been actively trying to sell this thing, and look, it could have been I was just bad. Like I just didn't know what I was doing. I felt like I thought I tried hard. I was trying hard, but maybe it was me, but it definitely felt like the proverbial, like I'm pushing a boulder up a hill to try and get this thing to happen and it just wasn't happening. Whereas with Zapier, so yeah, we observed this stuff in the forum. Yeah, I had the problem myself, but so it's like, okay, that there's something there, right? Like you kind of have this hunch that like maybe there could be something there. I'm sure the professor had the exact same sort of mentality, to your point. The difference was I remember when we actually started to go ship something to a customer and Andrew Warner, who runs Mixergy, was actually our first customer. I remember finding he was on this— there's a Stack Overflow has this like sister site that's like web users, power users of web apps. And he had asked a question on that forum saying like, hey, does anyone have a PayPal HiRise integration? And it was a little bit dated. I think it was a few months old, but I was like, I'm just going to cold email and just see. You know, we're probably—

did you know who he was? You know, he was the podcaster.

I mean, I listened to his podcast a little bit, so I was, I was a fan, but like, you know, he wouldn't have known me from, from anybody. And so I just like take a lot of— I'm like, I'm going to craft the perfect email to this guy. You know, I looked up, I was like, hey, do you still looking for this PayPal Hi-Rez thing? If so, I think I might have something for you, etc., etc. Fire off an email, just wait. He emails back and says, hey, no, I actually don't need this anymore. Like, I'm good to go here, but you know, did you build something? And the fact that he asked me that question, I was like, okay, great, I have permission to try and pitch him on something else. And so I went to his site and I noticed, like, okay, he's, he's using Wufoo on his contact forms. Um, I also knew that he was using AWeber to run his email lists, uh, and because he talked about it on like his shows. And so I was like, okay, I know what I'm gonna do. I'm gonna email him back and say like, hey, yeah, we're trying to help connect a bunch of different apps like PayPal, Highrise, Woofoo, AWeber, and then I inserted like 2 or 3 others just to like make it feel normal and then fired off an email. It was like, oh, I actually really do need something for Woofoo and AWeber. Can I get access to this thing? And so I remember messaging Brian and Mike and I'm like, hey, tonight we got to build Woofoo and AWeber integrations. And so that night we like hacked it together, sent over the thing to Andrew, and Andrew's like, great, this is awesome. And I forget the exact details, but maybe a day or two later he emails back and is like, Wade, Looks awesome. I'm having some tough time, like, getting going with this. Do you think you could, like, jump on Skype to, like, walk me through how to set this stuff up? So I jump on Skype and, you know, we're going through, we're helping him set up that zap, get Wufoo connected to AWeber, and I'm watching him try and do this. The product's not very good, like, poor design. Like, to paint a picture, You know, when you select which Wufoo form you want to hook up, instead of listing out the names, the name you had given your form, we were listing out the IDs.

I know.

Of course, a normal person has no clue. Yeah, no, a normal person has no clue the IDs. And so like, that's the kind of stuff that is happening here. Anyway, we get him through the whole setup process. We go to test it and turn it on and he submits a, you know, a lead into his Woofoo form pops over into AWeber immediately. His eyes light up and he goes, oh my God, this is so cool. You don't know how much this is going to save me, Wade. And then he's like, how much do I owe you? I want— I want it. Like, tell me. And I remember walking away from that thinking, that's the exact opposite experience I had with the old product. Like, the old product at the, at the with the professors thing, it was like pushing a boulder up a hill here. And that product was well-designed, well-engineered. It had all the right, like, stuff you would expect. Over here, this was like, you know, weeks-old software that was like, it worked, but like, you know, it still needed a little bit of— we needed to do some revs on this thing. And over here, the guy's like so excited that it exists. And I was just like, oh my gosh, if we actually had the same quality of software but with a problem people actually cared about, I think we, I think we got something. And so we just rinse, wash, and repeated that process for, I don't know, maybe 100 people. Like I would just personally onboard and just take all these notes for where, and every single time it was the same thing where it was like, this is awesome. Like you all are going to, you all are really onto something. And I was like, I don't even feel like I'm selling. Like it didn't feel like I don't, I still don't, I still don't consider myself a salesperson. But here at ours, it's like, it just sort of felt like, I don't know, felt like I was selling lemonade on a hot summer's day. It's like, I don't have to work for this at all. And so that to me was the difference. It was just like people wanted the thing. That was it.

Most people, even most entrepreneurs, have never had the experience that you're describing. And even serial entrepreneurs I know who have just lived a life of total frustration where they just have— they've come to actually internalize the idea that life is always pushing the boulder up the hill and trying to get people to to eat their vegetables when they don't want to. And it's one of the things that makes it really hard sometimes to pivot is if you don't realize that what you're describing is possible, it's really challenging. And I'm curious if you think you would have had a sufficient appreciation for it if you hadn't had the frustration you were dealing with in the prior company.

No way I would have had it. Like, just no way. Like, I, I think, yeah, I mean, I just totally like, I remember walking out like that. I still remember when I finished that call with Andrew, and it was like a very nice Missouri day. And I remember walking outside, literally doing like a big old fist pump because I was like, this— like, I was like, this was so different. It just felt— now, it helped that it was my own creation a little too. You have some of that like own ephemeral joy from being something you will do, like, but like, I was like, that worked. Like, one try, it worked. Like, how is that? It's not supposed to be that easy. But it was— I don't know how else to describe it.

Were you embarrassed to be showing Andrew, someone you admired, your janky portfolio?

Oh yeah. Like I was so, I was so nervous, so nervous, like walking through that Skype call because like, here's a guy that I kind of, kind of look up to and, you know, walking him through the software and it's like, this isn't great, this isn't awesome. And then when we get to the end and his reaction is that, I was like, It just, it was kind of jarring. It was like, okay, all right, this is going better than I thought it was.

Now, okay, and it was smooth sailing from then to unicorn status, right?

Hahaha. Well, no, not smooth sailing. A lot of effort put into it. You know, but, you know, we mostly once you sort of— we knew that we had something that people liked. Most of the problems we faced were variants of good problems. It was like, how do we figure out how to ship more integrations? How do we figure out how to support all these customers? How do we find more like distribution? You know, we've got some competitors out here. They're doing some interesting things. Are they going to like— are they going to be faster than us or not faster than us? How's that going to work out? So like These are all variants of good, good problems. The site went down and people rely on this. That kind of stuff is the hard— there's a lot of effort that went into that, how to hire a team, how to lead it. All these things, problems no doubt, but all very good, good kinds of problems at the end of the day.

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So, talk about— we've been talking about the product Zapier, and I think probably most people listening to this are familiar with it, and you've given a sense of what it can do. It's certainly in those early days really about integrating different SaaS products together. And that really dates the founding story. That's really at the height of the beginning of the SaaS era when those automations were starting to become a really important— obviously now the product is a lot, a lot bigger. But talk a little bit about the company. Like, that we talk about how to build the product, but how did you build the company in those early days?

You know, I remember PG gave us some advice on first session at YC.

This is Paul Graham.

He was like, this summer you should do— yeah, Paul Graham, yeah, founder of YC. And he gives some advice: you should do 3 things. You should be writing code, you should be talking to users, and you should exercise. Uh, with the exercise one being sort of like, take care of yourself. Um, I remember Brian and I on day one of YC— Mike, Mike set this one out— Brian and I went for a jog. We felt like we checked the exercise box off. And then for the next 2 or 3 years, we wrote a lot of code, we talked to a lot of customers, and that's what we did. Honestly, it was just nonstop. How do you get more integrations? Customer support. You'd wake up and our first hire was a customer support rep because we'd wake up and we'd be doing support until 3 p.m. and thinking like, this is really helpful. We really understand our customers, really know what they're, they're wanting out of us. But at a certain point, we actually got to go fix the things that they're— the problems they have with the stuff. And we just need a little help on the customer support side of that. So our first person was that. And, you know, we, we really wanted to stay really close to customers and the problems that they were facing. It helped also, too, that amongst the three of us, we had all the core skills that were required to go do this. So we didn't have to go hire a lot. We're also fairly young, so it's not like we have huge responsibilities outside of work. So like we're just pouring everything into this and like we're willing to we're willing to go through like what others might perceive as like a little bit of pain. You know, we're just out of college. We don't have money. We're used to working, living on ramen budgets. Like there's no reason for us to need like gobs and gobs of money. So, you know, we did raise that million and change right after YC, but we treated it like the last money we were ever going to get. And I remember we had this rule, we're not going to hire till it hurts. Like it needs to hurt us. And so like, hey, we're waking up and doing support till 3 PM. Yeah, that's starting to hurt. We need to get somebody to help here. You know, yeah, we're trying to ship a lot of these integrations, but our backlog of requests for integrations is a lot longer than we're being able to fulfill. We need to get another engineer in here or two to go help us out with some of these things. But we are being like— I would just wake up and look at like the balance sheet and then the cash flow statement. I'd be like, okay, like, you know, we've got enough coming in. I think we could probably hire the next person. And I would, I would just sort of like delay certain decisions by like a couple of weeks or maybe a couple of months just to like, you know, make sure that the cash flow stayed like nice and nice and tight. Like our bit, you know, we got profitable in 2014. So company founded in 2011, took us 2.5 years to get there. And between that time, the most money we ever burned in a single month was $20,000, which for most Silicon Valley companies sounds quaint. Like, that's just like, you know, quite, quite— some of these folks burn that amount of money in an hour, you know. Uh, it's, it's comical how much it gets burned. But that was like our mindset. It was like, we do not want to do this, we want to stay close. And staying close to it and doing the work ourselves also meant that we really understood every aspect of the business. We understood customer acquisition, we understand the product, we understand sport, we understood the finances, we understood the culture. And it meant that like we could learn at like a really good pace. And I think back to it, it's like, I think that was really one of the things we got right, because if we had tried to shove a bunch of cash and a bunch of people into this, I think we would actually kill some of the magic because we would have been spending our time and attention on other issues that weren't talking to our customers and writing code. So the very early days of the company were all about that. You know, I mentioned getting profitable in 2014. We had 10 employees in 2014. So 3 years in, we're still not that many people. Like, we're just, we're just staying so close to the work.

You'll like this old, old classic Silicon Valley joke, which is, I start a company, now I have a problem, so I raise some money, now I have 2 problems. So I hire some people. Now I have 3 problems.

3 problems.

And that's so— I mean, that's such a great example of, you know, it's been kind of become more the rage of late to talk about the idea that we're gonna have companies that scale without growing, you know, where the impact that the company can achieve is not correlated to its headcount. But I feel like that's actually kind of an old idea making a comeback. And you guys are such a great example of that. But again, I got to ask, you must have been around people who told you the conventional wisdom, which is that if you don't do that, if you grow at this suboptimal pace and you just chase breakeven and you don't take the big swing, surely some better finance competitor is going to come in and eat your lunch. You're going to miss the opportunity. The window will close. I can only imagine how many times people gave you that advice.

Oh, we 100% had that.

Yeah. What was that like?

Yeah, we— so I remember we woke up every day terrified. We had a— there was a product company. I actually love the product. It's a great product. IFTTT, If This Then That, they launched— I want to say they launched maybe 6 months before us and like, belle of the ball, like they, you know, TechCrunch is writing about them. You know, they've got all the love on social. Very focused on consumer, though we're focused more on work. That was our orientation always. We're going to be for work. But IFTTT is doing amazing. They're like raising tons of money, you know, tens of millions of dollars and later hundreds of million dollars from name brand VCs, etc. And folks are saying like, IFTTT's going to get you, it's going to get you, they're going to get you. Like all they got to do is start doing work stuff and they're going to get you. And so I remember waking up every single morning thinking, checking the news and just thinking, you know, this is the day that IFTTT's going to launch a for-business thing. And like, if they launched a for-business thing, I was like, I mean, they've got all the attention, they've got all the hype. Maybe that's it. If that happens, like, maybe, maybe we can't compete. But at the end of that, end of the day, it was just that it was simply fear that was there. And, you know, our approach was like, well, How do you combat that? We got to just get up and do the same thing. So we're going to get up and we're going to try and ship more integrations. For us, we had this really powerful distribution engine that was like more integrations led to more landing pages, landed more search keywords. And so that was how we grew. And so it was like, okay, we need to just like really be focused on this flywheel and get this right. And, you know, maybe we can just get enough traction, get enough brand reputation that even if IFTTT does this thing, people know us as the, like, real deal place to do work automation at the end of the day. But yeah, like, well-funded competitor, you know, conventional wisdom said had all the advantages at the end of the day. But, you know, like IFTTT has done fine for themselves, but we've, we've, we've outpaced them at this point in time quite a bit. And You know, I think if we'd have— I think if we'd have had all the money, all the attention, all the other stuff, like, I don't know that we would have been as laser-focused on writing code, talking to users, occasionally exercise.

Well, I'm glad— I'm glad you talked about that because it's so interesting to me that this idea, this meme is out there because you yourself already said, you know, as you're telling the story, that if you had tried to cram money and growth into it, you would have killed the thing that made it really special. And yet even you had this paranoia that not having done that would leave you at a disadvantage. So there's this idea floating around that like you have to be maximum, you have to do everything to the max, maximum exploitative, raise all the money you can, like do, you know, do what you have to do to customer, like just do whatever it takes. That's the only way to succeed. And I think even those of us who've seen something different with our own eyes, like we still can buy into that idea and it can be hard to feel like you're doing things differently. And not, not chasing that thing. And I'm curious, you're talking about that paranoia about like the day would come one day when the well-funded competitor came for you. Did, did the day ever come? What happened?

I mean, the day hasn't come yet as far as I can tell. Uh, I, I mean, I, you know, it's different. The fears are different this, these days, um, but they still exist, you know. Now back in the day it was just, it was IFTTT, you know. Now it's, you wake up and it's like, what new AI thing exists that could totally, you know, just revolutionize an entire industry, revolutionize an entire space. And now it comes from every direction. Like it's some, you know, some random startup no one's ever heard of is like doing this sort of stuff. And so, yeah, I don't think that fear ever totally goes away. Like, I mean, I don't even to this day, I don't know that we're right. Like, I know that it has worked, but I don't know. I don't have the counterfactual. I don't know.

You can never know. That's, that's the curse. The curse of entrepreneurship is you only, you only get to run the, you only get to run the experiment one time. You said something really interesting in passing. I mean, Zapier could be more of a textbook Lean Startup story. You know, so many elements, the MVP, the, you know, the laser focus on experimentation and learning. The story told about Andrew is like such a classic example, and we'll link to Andrew's podcast. Shout out to him. It's a great, great show. But I mean, it's just a great example of how a customer reacting that way to an early prototype is extremely valuable. Extremely revealing about what's really going on and where you are throughout the product-market fit. And we talk about there's the value hypothesis, that first aha, that, okay, there is— if we could build it, there is a customer who actually finds it delightful. The delight standard, we call it. But then there's also the growth hypothesis. Too many companies only focus on building something delightful. They never actually figure out how the distribution is going to work, how are customers going to find out about it. And you built this incredible flywheel that is a great example of a concept we call the engine of growth. Which is a situation where new customers come as a side effect of the action of past customers. We call it the law of sustainable growth. And so many growth hacking and marketing tricks and gimmicks and whatever have this fundamental problem that even if you're really good at doing whatever the marketing activity is, let's say, you know, you can get the press to write a story about you at will, and each time you do that, it, you know, gets you 1,000 users. Well, as the size of your customer base grows, 1,000 customers as a percentage is going down. So you have to, you have to be able to grow the marketing effort in line with the proportion of customers that you have. And so in order for it to be sustainable, somehow it has to be powered by the size and scale of that customer base. So most people, for example, would say that SEO, you know, especially in those days, would be in the category of something that doesn't scale because even if you rank for a really important keyword, that's a fixed benefit. And yet you were able to build this flywheel using power search engines such that it scaled with the business. And that's, that's a really unusual flywheel. I wonder if you could talk a little bit about how you discovered that growth engine and then how you validated that growth hypothesis was going to work.

We were inspired, borrowed, stole the concept from Patrick McKenzie.

Oh yeah, yeah. Shout out Patrick McKenzie. We'll link to him too.

Yeah, folks will know him from his, probably his work at Stripe maybe, and You know, writes a great financial newsletter these days. But, but long before that, he had a micro-business, Bingo Card Creator, right? Bingo Card Creator. Yeah.

Oh, yeah.

And he would write all about— he would write, he would share all of his notes. It was great. It was so, so great. And, you know, he had this one called Scalable Content Creation, and he had this insight that was really sharp. Which was, you know, folks might search for bingo cards, but turns out they'll also search for history bingo card or physics bingo card or wedding shower bingo card or U.S. history bingo card or, you know, insert any sort of keyword around a bingo card. And it turns out it's pretty cheap for him to make a page that is X bingo card. In fact, he made a little CMS for it and hired a woman, I think was like a stay-at-home mom, and said, hey, for every, you know, one of these you come up with, I'll pay you, I don't know, $5. And he did the math on it. And turns out, you know, not that many people search for history bingo card. It's tiny. But, you know, for every page he'd create, he'd spend $5 and he'd get enough visitors that he'd make a return on that. You know, I think he'd sell, you know, 4 bingo— 4 US history bingo cards. So it takes— costs $5 to make the US history page. He sells the US history template for $10. Great. He makes $40 off that, costs him $5 to make it and rinse, wash and repeat that for every single permutation of bingo cards you can think of. Kind of genius, like arbitrage, like thing to think about. And so we saw that and we're like, that's interesting. I bet you could do that for integrations. And software integrations are probably a little more lucrative than bingo cards. Just going to go out on a limb. And we were like, okay, well, it works just the same. Every integration we've got should have a landing page. That is that, that app with any other app that you can sort of hook up on the platform. And so for us, that meant anytime you went and searched for, you know, PayPal or Highrise, like Andrew Warner was back in the day, or, you know, Woofoo and AWeber back in the day, there's a landing page that ranks for it. And at the time, the search engine rank, the search results for these types of searches were abysmal. There was just nothing like nothing. It was like, you know, Stack Overflow links and like Gists and just stuff that was no good at all. Now, if you go search, like, of course, it's really different. Like everybody, Zapier is doing this and everybody's doing doing this. Um, it's not, not much of a secret anymore, but at the time this was super novel. Uh, and so for us, the growth engine became just adding apps to the platform. Every time you add an app, it creates more landing pages. Those landing pages are all new keywords, n+1 new landing pages and keywords to go rank for.

And that's another tranche of customers coming in, uh, who probably also are submitting requests for new integrations.

Submitting requests for new integrations. And the magic flips in when we built our developer platform to allow the community now to come build integrations into the company. So now you're getting customers coming in through keywords, you're getting the community build integrations, and it's just us brokering this stuff in the middle. And so when you talk about a lean startup, well, that really does help you be fairly lean when the labor is coming from this side, the demand's coming from this side. Customer acquisition costs rounds to zero because organic search is free. And so it's us doing customer support and making sure this workflow engine doesn't stop working. Like that's, that's our job is it can't break. It has to work really, really well. And that, that I think that engine was super important. And I like the way you talk, like the way I end up talking about this with other founders or thinking about is I think oftentimes people think of product market fit as this like sequential thing where it's like, we're going to start with the product. Once the product's good, then we're going to start working on the market side of it. And then the fit thing comes third. But from— I've always thought of it as like, it really is better when the product and market is actually like, it's a reinforcing mechanism. Like, and you look at the best products, it's just baked in in that way where it's one thing.

It's not two. They said the space-time continuum. Yeah, they're not separate things. It's one thing.

Yeah, it's not two distinct things. It just, it all just works together, um, in a pretty magical way. Uh, and I'll be honest, that's hard to do. Like, but, um, you know, I think there's a— there's— you look at the best businesses, I think they all kind of have this dimension where they sort of just are symbiotic in that.

Yeah, in the early stages, the product is the marketing, is the product. There's, there's no, there's no distinction. And exactly from that, just to date ourselves a little bit from that era, I remember where people were talking a lot about the need to add monetization to products. So the theory at that time was you raise a bunch of money, build a great product, give it away for free, get a lot of customers addicted to it, and then start charging them money. I remember thinking that like adding monetization to a product made as little sense as adding productization to money. Like it's just, it's not, they're not separable things that you just add. It's not a layer cake. You build it by layers. The things are highly integrated. And if the whole engine can't turn, as a whole, then the thing is not going to grow. And we saw so, so much startup mortality from people who didn't seem to understand that at that time.

Yeah. I mean, to that point, like our— in our beta, it was paid. Like we had a paid mechanism as part of it, mostly because we wanted to understand, we wanted to all fit. Like we didn't want to be attracting these like tire kickers who were never going to pay a dime for it. And then us to be reacting to customer feedback that wasn't actually customer feedback. It was just like tire kickers. And so you kind of did want it to be like a mini business to just know that like, yeah, this is the business we're optimizing. I feel like the longer you wait on that, the more behind you get, and the more it just starts to be incongruent. I think to your point, you see this where there are some like really phenomenal products on the internet where monetization is just really bad. Like the business of that is just no, no good. Like a lot of the early like community forum software stuff is— are amazing communities, amazing places to hang out. They're just great, great products. The businesses are just abysmal. Like you just wouldn't want to run one of those.

Well, and eventually the product suffers, eventually the community suffers because there's no business model defending it. And so it was, you know, think about how social media—

especially if it gets overfunded, just bust on a matter of it. Yeah. And if that's— if it gets it gets overfunded and now the returns are expected to be da da da da da. And it just is like now they have to grease every dime out of the thing where it probably could have been a real— like those communities probably could have been really good products with decent businesses put on top of them versus sort of aiming for these like venture.

I really— yeah. And I really like your idea of kind of like creating this debt that you have to catch up to because I do think that, that so many companies are ruined by investors, frankly. When investors create this mismatch of expectations, this pressure to do things, and that drives otherwise good products often in an exploitative direction. And it brings to mind something I've always wondered about Zapier is this story is so much about trust because you are asking people to trust their business to you kind of in two different ways. And I'm curious if you think about it the same way. Well, I was thinking about this, that on the one hand, I have to trust you. Like, if I, you know, I'm thinking about Andrew, if I hook up my contact page to my email list, it better work. You know, someone signs up and it doesn't wind up on the email list, my business is broken and now I have an unhappy customer. And so I'm trusting that the performance of the software will be what you say it is. And also on top of that, I'm also trusting you in the privacy sense that as I'm taking my most intimate private data as a company, you know, my customer records, my billing records, and I'm passing them through your hub and spokes model, that must mean a lot of my sensitive data is passing through your servers. I have to trust you're not going to do something evil with it. I'm curious, how did you think about winning over people's trust and how have you thought about maintaining that trust as the company has scaled?

Yeah, I mean, the early days, honestly, we just have to give credit to folks like Andrew and others that were early customers because I don't know how— like, how would we have conveyed that? I still don't.

That's the magic of early adopters. It's just— you've never seen it. It's hard to believe.

It really is. Yes, exactly. And so like all the credit goes to them for just honestly, for no good reason, just saying, hey, like I'm willing to take it. I have a big enough problem that I'm willing to take the risk. And, you know, then I think over time it really is a time aspect. It's like once you have some customers, it's like, well, treat them really well and make sure that you fulfill the promise and then you start to build up a reputation. For like, okay, great, Zapier is good, Zapier is great. Now, you know, 13 years in, a lot of people trust us. They know that our stuff is good. But 13 years doesn't— that was just time. Like it was just a consistent application of doing right by our customers for a long, long period of time. And look, there was other things that we could do to sort of like de-risk certain things. So for example, you talked about, you know, hey, there's a lot of this data coming through our pipes. Well, You know, we have a task history where we purge those records, you know, after a very short period of time. So we're not storing any of this data at rest. And that all sounds like, oh, okay, like I feel more comfortable with that. You know, we have like task history that has replay associated with it. So when something breaks, great, hey, you can replay it, you can turn on auto replay if you want this to replay twice. So, you know, you can start over time, you start to learn and figure out like, okay, here are the types of ways things can go wrong and here are the safety mechanisms, the safety nets we can erect around them such that, one, we can prevent it, or if we can't prevent it because we can't prevent everything, that we have mechanisms to recover from those failures. And so over time, you're just building more of these mechanisms in. And, you know, some of it's, you know, our own ideas that we just sort of came up with as we thought through it. Some of them are candidly just customers saying like, I think you all should do this. And we're like, yeah, we probably should. And so then we built it, bake it in. And then again, it's that time aspect where it's just you just keep the consistent application of like taking care of your customers year after year after year. It really does compound. And I do think this is something that like, again, I think this is something that like venture companies sometimes get topsy-turvy in, like the quest for revenue. You can be so, so obsessed with dollars today that you actually hurt your long-term revenue potential. We've seen this in the last couple of years where, you know, markets go sideways, companies raise so much money, they're trying to hit their numbers. Everybody raises prices, everyone raises them a ton. And look, you know, for a little bit, like, I think the market kind of understood. They're like, I kind of get it, etc. But at a certain point it's like, you know, like we had a vendor that showed up a week before a renewal and said, hey, it's going to cost 4 times as much. And, and you're going to get— we're going to shove this other piece of software down your throat that you don't want. And we're like, well, you know what? We'd rather just renew it 1 year instead of 3 years. Vendor said, oh, if you're going to renew it 1 year, it's still the same price. And, you know, so we look, we renew it 3 years. But you know what? Next time that renewal comes up, I don't think we're going to stick around. Like, it's just hard. It's hard for us to want to do that.

If companies never act—

and I'll be the first to say we're not perfect on this dimension. Like, we've made our fair share of mistakes. But I think the longer I've been in business, the more I'm like, you know what, it's never been worth it. It's never been worth it. I'm like, I'm willing to sacrifice, you know, a little bit of revenue, a little bit of, yeah, just growth for the durability of these customers over the long haul.

I always say that if big established companies never acted in an exploitative way, there would be no startups. Because every time someone does what you're describing, some— always like some startup somewhere is high-fiving right now being like, great, that's my opportunity. I now have 3 years to try to come in and displace that vendor who you're now pissed off about, whereas you were perfectly happy before and the incumbency advantage would have made it hard to create that opportunity.

Yeah, this is where I look at Amazon and I'm just like so impressed. Like, I think Bezos just got it right. He's like, hey, your margin is my opportunity. And then he figured out a way to do it to the scale of Amazon. And it just— and how do you remain true to those like founding principles decades in? Yeah, it's incredible.

I want to talk about— you did eventually grow the company. You're what, 750 employees now, something like that?

So, yep. How did you—

so, so a lot of companies I meet, the founders have great intentions. They're like, okay, yes, I want to build durable customer relationships, I want to be a trustworthy counterpart, that's really important to me. But as you know, when you have 10 employees, 15 employees, 25 employees, you can personally oversee and make sure everyone is true to those values in that culture. But when you get past 100, 150, certainly by the time you're at 750 with the employees. You're having to trust that your employees are going to embody that ethos, and you're now being going to be held responsible by customers for the behavior of people that you don't interact with that often. How have you managed that? Have you found that stressful? And how have you managed to keep that trust even when now you're, you're no longer building the product directly, but you're building this machine that builds the product?

I think this is the hardest, the hardest thing, you know, after you get, you know, product market fit or something like that. You know, it's all about like people and cultural tenets and people are not predictable. Like, you know, they behave in all sorts of different ways. Hiring is fraught. You know, it's a really challenging mechanism. The, the thing that has worked the best has been finding leaders who really do espouse like a similar mindset, a similar point of view. And it's not that they're like, you know, it's not that you want like groupthink, but you, but you want them to sort of like similarly obsess about the customer, similarly obsess about the problem space, similarly obsess about product quality, like sort of have similar standards, I think is probably the main place where similarity comes in. And, and like the hack that I like is I like people who have higher standards than me because I know if they're going to have higher standards than me, I'm just not going to have to fight that hard at the end of the day for like what's right for the customer, what's right to get done. But by golly, this is the— like probably the most mistakes I've made are probably in this category of, of, of work easily. It is super hard.

Have you done anything like from a structure or like process point of view to try to make sure that you're— that you're not having cultural drift, that those values are being embedded in the company?

So, you know, I would call out maybe two things. First, we have had company values for a long period of time and we enact those company values in our hiring process. So they're part of the hiring rubric and in performance reviews. So we— it's not just posters on a wall, it's actually like a mechanism to reinforce these things. So that helped and that certainly was really powerful, still remains really powerful. But as we've gotten larger and larger, they're not prescriptive enough for some of the detail-oriented work. And so I remember a couple of years ago, you know, we had some changes in our exec leadership on like product and engineering. And as I was getting in, I was noticing like this phenomenon that happened where there was just like, you know, because we hire remotely, we're hiring people from all over the world. They don't always have like— they're coming from all these different companies, all these different sets of best practices. So every new leader is coming in and trying to insert their set of best practices, and nothing was inherently wrong with any of their best practices.

But you can't have 25% Google, 25% Apple, 25% Microsoft. Yeah, you can't. They don't work together.

Yeah, but— and then it's the stacking of them. That just grinds the gears to a halt. And it was just like nothing is getting done because it was like we have to go through every single set of best practices, which ended up being a worst practice at the end of the day. And so I was like this, like we're not shipping anything, like we have to fix this. This is fundamentally broken. And, you know, myself and a couple like Zapier vets just sat down and we're like, hey, we're going to write what we call our build principles. And these are just like how we think about shipping products. Like, when do we ship product? How do we think about, you know, the quality levels? How do we think about experimentation? How do we think about all these things just to define like, this is what our way of doing it is. Not that it's the right way, but at least we can act a little bit like a hive mind when it comes to these decisions. So we're not relitigating the how of the work. Instead, we can debate, is this the right feature to ship? Is this the right customer problem to solve? Like, our debates can be oriented there versus on like you know, what's the right dev process to use or what's the right blah blah process to use? I'm like that no customer would ever be proud that this is the conversation that we are having internally. And that in fact is like often a thing I describe when I see us getting stuck in the rut and be like, hey, we— if all of our customers looked internally and saw the discussion we are having right now, would they be really happy about this discussion? And if so, I'm like, it's probably a good discussion to have. But there's a lot of times in these customers where if they had a chance to look inside of it, They would go, I am so frustrated at you all right now because this does not solve the problem I care about. And so it's just a good grounding question to like keep people a little on the straight and narrow to go like, okay, yeah, that it like we're, we're messing up. We're, we're optimizing something that customer just doesn't give a crap about.

It's an old Deming aphorism that the customer is the most important part of the production line. And he used to, he used to advocate for that, that perspective that you would look to see the things that you're doing to see if that's something that a customer would care that you're doing it or is it pure internal navel-gazing? And so much of what goes under the banner of quality is actually not something that is customer, customer impacting. Leading to that, I want to run an idea.

These build principles did help quite a bit in terms of like, and then we just try and, you know, just getting leaders to talk about it like, hey, you did a good job at this. You did like, you followed this really well. And I think it's also important to do it, especially when you don't get the outcome you'd hoped for, but you still believe in the mechanism at the end of the day.

Yeah, yeah.

Like, that's really helpful because people can— it gives them permission to like keep doing it that way because they're like, I'm not going to get in trouble. Because that's at a certain scale, like everybody's just worried, am I going to keep my job? And so you have to like keep reinforcing them to do the hard things and say like, that's actually the way you keep your job. You don't keep your job by like playing it safe, because if you play it safe, we're actually never going to be interesting, which is kind of the irony of this whole thing, is that playing it safe is actually the riskiest.

It's very risky. Yeah, uh, yeah, uh, at the end of the day, in a previous episode, we talked about this idea I call the culture bank, which is basically like the way you build a strong culture is you do things that are for the customer's benefit that involve some kind of sacrifice in defense of your values.

Yeah.

And that you tell stories within the company. You have to tell people that it happens. People know that, look, even though we didn't get the outcome we wanted, even though this cost us something, This value is so important, it's the right thing to do. And when you do that, it's like you're making a deposit in a bank. And the advice that someone once gave me was that basically you set up this bank and you only make deposits, never make withdrawals. Like, it's so easy to talk yourself into thinking that it's a good idea to break the value this one time, but you start to do it once, you'll do it all the time. But I want to run a further idea by you because I'm curious if this resonates with you. One of the things that I've worked with some companies on is we build— triggered when you said that the values were not specific enough as you grow to guide people's behavior. And that's a very common challenge that companies run into where they have these high-level values and then there's kind of like the performance rubric and you're missing this intermediate layer that's like, "Make it real for me." So it's a concept called a leader's guide where you actually tell stories, you document them, and you repeat them all the time. And it becomes part of how you build the performance employee— your performance review matrix. Metrics, tell stories about times when people did the right thing by these guys, here's what it looks like. But the idea I want to run by you, I call the two-way review, which is that whenever people do this, the stories inevitably go stale. Because, you know, you guys have been around for 13 years now. So some of the legends of the company will be an amazing thing. Even some of the stories you told me, they're old stories. That time when Andrew Warner called you, I'm sure everyone's sick and tired of hearing that story by now. And people say, okay, well, just because Andrew Warner called you about that thing 13 years ago. Now you're doing the thing that used to drive you crazy. You're telling me it's something worked in the past. How do I know it's going to work for me? And I've heard plenty of people say, sure, the founder could have gotten away with that 13 years ago, but I can't ship an MVP now. I can't do something that I, you know, we can't do that. And so you have to have a process to revitalize those stories. And it occurred to me one day that we actually do the story collection every year when we do performance reviews. Like, we write down and we collect all these stories, and generally HR throws them away at the end of the cycle. We don't keep those, or maybe put them in the employee's file, but the rest of the company doesn't hear. And so the two-way review is basically a, a process of using the performance review to update the leader's guide, to make the— to bring new stories in and keep it fresh so people understand, here are the new kind of challenges that we're facing. And I'm curious if that kind of cycle of using it to build the matrix, using that then to do the reviews, using the reviews to then update the stories, which update the matrix, if that resonates with you.

Uh, I like this idea because there are a lot of positive behaviors, positive outcomes that are buried in these things that a manager and a direct report are generally the only people that ever look at it. Uh, and so if you had a mechanism to extract those out and use those to go celebrate, like, hey, here's some incredible behaviors, approaches, whatever outcomes that from this quarter that we want to just shine a light on. Like, that stuff is, is really powerful. Like, you know, I have gotten this feedback where, you know, from my teams that are like, hey, Wade, you know, you usually have like the right ideas on things, but you don't repeat it enough. You need to repeat it till you're sick. And so like, I have to get used to it. Like, I mean, you talk about the Andrew Warner story, like, I guarantee there will be some Zapier employees that listen to this podcast. And they'll have never heard that story, right?

For the first time, we hope for 500,000.

Yeah, they'll be learning it for the first time, even though I probably told that story. I don't know how many times. It's the great David Ogilvy quote, like for advertising, he's like, hey, you're not you're not talking to a standing army, you're talking to a moving parade. And like, that concept is like so important to like embrace as the storyteller where you're like, oh, I'm not repeating myself to the same people. I'm actually talking to different groups of folks all the time. And it's okay to play our greatest hits over and over and over and over again. People like them. They really do.

That's how they became your greatest hits. Yeah, exactly.

I know.

I want to switch gears. Just, I feel like we got to talk about AI. We'd be remiss if I didn't talk to you about it because I don't know if you had this in mind when you started the company, but it seems to me like the way that generative AI has played out these past few years, you're one of the companies that is most ideally situated to take advantage of that megatrend. And that must be both enormously exciting, but you know, you mentioned earlier, a little bit daunting. Like you're also going to face like all kinds of new competitive threats with— for— from capabilities that we couldn't have even imagined when you started this company. So I'm curious if you could talk a little bit about some of the new things you're doing in AI, and how do you see AI kind of changing the future of work, changing what it means like to automate work, those, those kinds of things, you know, people are really concerned about and maybe even a little bit excited about. How do you see it?

I mean, we're super excited about it. I think, uh, you know, we, we sort of founded the company on the premise that like, uh, we're humans who think computers should do more more work. We want automation to work for everybody. And, you know, I certainly feel like, um, like we believe a lot in like human ingenuity, human spirit to solve problems, but for far too many of us, um, we're limited by the tools of our time. You know, if you're not an engineer, like it doesn't matter if I have a great idea, I can't— I don't— I'm not— I'm not well equipped to go do some of these things. And so certainly the Zapier of 2011-2012 helped. It felt like a step in the process. We definitely made it a lot easier for folks to set up integrations. And then in 2016, we made it a lot easier for people to set up workflows. But there's still, you know, the delta between idea and execution is still, is still too far apart. Like we still need to shrink that and make it faster to get there. And AI is just like another— I say it's another, it's probably the biggest, you know, step function change in technology capabilities that existed. Yeah, I think for us the experience has been one of like, like a combination of, again, fear and like jubilance at the same time where, you know, you see what these models are capable of and you start to go like, well, are we going to be relevant in the future? Like, is our stuff going to matter? But then also you start to play around with it and you realize like, oh wow, there actually is some really incredible stuff. That could happen when you, you know, add AI into the workflow. And so, you know, we've got the most like the most boring version is actually where all the value is happening. Old school Zapier workflows. There is 400,000 customers. They've delegated almost 100 million tasks to AI. I think the reason it works so well is that, you know, AI is really well situated for certain tasks, but it's super unreliable for for a lot of tasks. So if you go play with a lot of the AI agent tech, their demos are really slick, but the challenge is the reliability is too small and it doesn't work that great.

Not a lot of those demos being deployed to production.

Yeah, I know. But if you can put an AI step inside of a deterministic workflow, you can have the AI do a— the step that you really want it to do, the thing you really care about it. So you can say, hey, I want to collect a lead from the site, I want to enrich it with ChatGPT, or I want to enrich it with Clearbutt, then I want to go scrape the website and pull some details through ChatGPT, and then I want you to draft an email based on what you learned, and then I want you to send it into, uh, Gmail as a draft that I can go personally go review and press send. All of a sudden you've got a workflow that works pretty dang good, uh, and is super powerful for anyone that's doing any sort of lead generation techniques, um, versus having the AI try and do every single one of those steps. It's gonna come up with some garbly gook at the end of it. And so I think that's where Zapier has been a huge net beneficiary, is that it's opened up AI to a whole host of non-technical people to use and open up and unlock these new use cases. But that said, yeah, that like we still think that that is exciting, but you have to anticipate, I think, with AI, like where is things going? Like that works great for today, but the model improvements are so fast. And so that's where we've invested in things like Central, where Central is saying like, hey, what if you just designed Zapier from the ground up, like in an AI modern era? What would that experience look like? You know, and that's a chatbot where you can talk to it and describe your workflows and see if it can go set it up. You can work asynchronously with data. You can pull it in a much more like real-time manner. Um, and, uh, you know, the, the use cases there are pretty good. You know, has a little more of the reliability challenges that the old stuff doesn't, but it unlocks unlocks a lot of easy use that you don't get with old school workflows. So that's pretty exciting. Then we've invested a lot in things like tables, interfaces, um, and stuff like that. And that's interesting to look at because you go, huh, chatbots, which is where a lot of the early AI work is happening, is pretty powerful, but it's not clear to me that that is the perfect user experience paradigm. And so it's interesting to go look at other preexisting user experiences and say, well, what if you built tables with AI in mind? What if you built interfaces with AI in mind? What if you built workflows with AI in mind? Like, how would those experiences work and how would you blend all those things together? I think then you combine that with Zapier's ecosystem of 7,000 tools connecting all this stuff. We have all this data we can pull in and push out to the world. And it does make for a really fun sandbox for us right now. Like, it is super fun to be working on these problems at this moment in time. And, uh, yeah, I'm sure like a lot of startups it's also terrifying because everybody sees the opportunity and goes like, there's going to be some really awesome stuff that's made. At the end of the day though, the great thing— customer always wins. Like, there's customers are going to have a lot of fun, uh, in the next 5 years. It's going to be awesome.

So one of the things that's interesting about this AI stuff that you're working on, it's almost like you're having to go back to your startup roots. I mean, I, I've called it for a lot of companies a second founding. Does it feel like that, that you're, you're kind of rediscovering what it was like to to have to do that, but now do it in the context of a much larger company?

Oh, 100%. It's, you know, and I think you're like, you know, you talk about like having to learn how to build a team that's oriented around this work. Like it, you know, so many of the folks that you hire along the way, you're hiring for their expertise at a particular skill set around scaling a problem. And now you're starting to try and launch new stuff. And you're starting to find that like not everyone is as comfortable in the ambiguity of new things as other people. And you start to, you start to have to go like, okay, how do we do that in the context of a company where there's a lot of folks who are like, I'm not so sure I'm willing to take that risk. I'm not so sure that that's good enough. I'm not so sure that we should be working in this area. I'm not so sure. I'm not so sure. I'm not so sure. And, you know, sometimes it doesn't come off quite so polite as I'm not so sure. Sometimes it comes off as like, that's the biggest mistake this company is ever going to make. And I think the thing that we have found is you kind of got to go back to, like you said, you got to go back to the roots. How did these teams work in the early days? Well, it was a small team that was passionate about a problem, who cared deeply about this set of customers. And you kind of just get out of their way and you say, hey, go do this thing, like really go figure it out. The unique constraints are you're still— you still kind of do have to do it within the existing context of the business. You're not an entirely new thing. And so there are more friction points to it. And, you know, I think we have learned how to ship a product. We've learned how to get early customers. We've learned how to get early revenue. We're still learning how to package it all up together in a way that feels like it's a part of a unified Zapier experience. And every chapter has been like pulling teeth to sort of like work our way through it. It's just harder, I think, to do it inside these companies than it is to do it, you know, externally. But here's the— here's the thing. You have some like, we have some like amazing advantages to do it inside of the company, like customer acquisition for these new products. So much easier, so much easier. And so like, you know, it's just, it's just different. Like, and but it's, it's, I think the learning is like just get a small group of folks who really care, who know how to ship, who love that problem space, and then let them launch the thing so that you can just start getting that like iteration loop going.

I wrote a lot about this in The Startup Way, so I won't recapitulate all of that. But one of the things I've noticed is a lot of founders have a kind of a sense of vertigo, like it's your identity is kind of all strange when you realize that you're no longer the entrepreneur in the story. You're actually more like an investor. You're more like a mentor. You're helping the entrepreneurs that work for you and you're having to hold them accountable in ways, you know, you wish people had held you accountable back in the day. You know, that right mix of giving them the freedom to experiment, but still trying to have it be, you know, giving them the benefit of the wisdom that you've had. And it's hard to remember, I think, that they weren't there. They never saw— they weren't there when you talked to Andrew Warner. They weren't there in Columbia, Missouri when you guys were first starting out. So they never— like, they've only known Zapier in the context of it is this, you know, multibillion-dollar behemoth. And you're asking them now to adopt a mindset from, from your past. And I'm wondering, have you, have you had that sense of vertigo, like that kind of like strangeness of the change in roles as you do that?

Oh yeah. I mean, it's weird. Like, you know, one of the products we launched, I remember just going like, I don't get this. Like, I just don't, I don't, I don't like, I don't, I just genuinely don't. And then when we launched it, the response was like incredible. And I was just like, what is going on? Like, I just sort of was like, okay, I, I am not like dialed in to the entirety of our customer base in the way that I maybe was at that time. Like I knew every single customer, every inch of the product, every, every bit of surface area. Now, look, I still know a lot, but there are pockets where there's people inside the company that have better insights, better, you know, better points of view. And so You know, figuring out how to like differentiate between like identify the folks who really do have a keen and novel insight versus someone who is like just riffing. Um, like that's it. That's tough. That's hard.

All right, I want to do a lightning round of a couple quick things before we go, before we end. A lot of things I wanted to ask you about. First of all, I gotta know, favorite zap of all time?

Uh, honestly, I'm gonna, I'm gonna share the most boring Zap that I have is the one that I've used since we adopted Slack. So Slack is— and it's had a couple of different iterations. But if you recall Slack, it certainly still is this way. But in the early days, horrible. Like, you know, if you hated email because it was hard to keep up on things, well, Slack just made it worse. Instead of one inbox, you got a million inboxes. And so the first iteration of this app was literally starring Slack messages and then sending me an email so that I could remember to come back to them later. I've since updated it quite a bit. And so now it's not just me that interacts with that. I work with my EA, so I will star messages, I'll send them through a ChatGPT prompt to summarize them and rewrite them. Those land in a Coda doc that now my EA can help triage things with. And so it's a lot more sophisticated now. To help me just manage the influx of information that a CEO deals with on a daily basis. And, you know, I think the, the unique thing I can do in partnership with my EA is say like, hey, there's a lot of tasks inside of here that don't require Wade specifically to go to. It just needs a general smart person. And so between me and her, and occasionally we rope in some other people when it's exceptionally busy, we're able to like suck in all this information and then push it back out to the org with like pretty fast SLAs so that it just keeps the drumbeat of the organization working. So like I said, it started with this like just very simple thing, which is like I'm going to start a Zap or start a message in Slack and send me an email to now. Like, it's kind of like, it's like my little like mission control for managing the company.

Super cool. All right. You once famously paid employees $10,000 to delocate. From the Bay Area to other places.

Why? Yep. This is a funny one. So this is— this sounds— it sounds a little silly after the pandemic, but pre-pandemic, you know, I remember we were— we're at a Zapier retreat and a couple of employees were just talking about like fun things we could do. And, you know, some folks had noticed that we'd hired a couple— Zapier always been a full remote team. We'd hired some folks who you know, within their first month of joining Zapier had left the Bay Area to move somewhere else. Like one had gone to Florida, one had gone to Pennsylvania, all mostly for family reasons. And they were like, huh, that's interesting. You know, most companies are relocating folks. You know, they're spending $10,000 to get you to move to the Bay Area. What if we put a spin on this and did a delocation thing and we'll pay some money for them to leave the Bay Area and I remember they pitched it to me and I was like, I don't know how I feel about this. Like, I live— I was living in California in the Bay Area at the time. Like, I'm not really sure I want to like come dogging on, you know, the place I live in this way. But the head of marketing at the time was meeting with a PR agency that next week and they sort of— it was an intake call to like meet with them for the first time. And, you know, he was given a download on the company, all the fun stuff, and then gets to the end and I'm Anything else that's interesting? And without consulting with me, he goes, well, we have this like relocation package thing we're working on where we pay folks, you know, to relocate out of the Bay Area. And they're like, oh, that's interesting. Tell us more. So he kind of gives them some of the details. We had not ironed this out, mind you. And the next day they're like, hey, we've got a reporter from Inc. that wants to write about your deal location package. And I'm like, wait, What? And so I was like, well, I guess we're doing this. And, you know, I whipped up the policy, wrote like an external blog post because I wanted to have something that like the external world could reference. And we put it out there. That thing went viral like I've never experienced it. Like that was the first time I felt like we actually broke out of like tech news and got into the mainstream news. Like the local TV stations were interviewing us about this. I remember one, like San Francisco folks, tried to interview me once and then I got bumped. I— the first time I got bumped was because the red iPhone came out. And then the second time I got bumped was because the Oakland Raiders were moving to Las Vegas. And I was like, oh, my competition in the news segment is a lot different than what I'm used to.

Yeah, we're not talking about some other type of company.

People ate that stuff up. But it was all— the heart of it was just simply that folks should be able to live wherever they want and you shouldn't be forcing them to come to Silicon Valley. For this.

Did you feel—

did you feel bad version of that?

Did you feel bad, like, when bashing San Francisco became a meme and whatever?

Did I— you know, I, uh, no, I didn't. Uh, like, I, I think, I think there's definitely, like, a Silicon Valley bashing that is probably not appropriate. But, like, look, like any place in this, like, world, some people love it, some people it's not for them. And I do think with Silicon Valley, it probably gets exaggerated on both sides. You know, there's, you know, a set of folks that are like, this is, this is heaven on earth. And then there's, you know, a version that's like, this is a hellhole. And I'm like, it's just a place. It's just, and it's a, it's a good place. Like, you know, most of the time there's some things that could be better. And yeah, it's just a place.

You've talked a lot about the power of kind of the surprising power of compounding, getting 1% better every day. And you said that it's easier to iterate than it is to invent. And I feel like that also kind of goes against the grain of the idea that the swashbuckling entrepreneur has got to take the big swing. What do you mean by that?

You know, I think probably the best exaggeration of this is like how we think about launching new products. You know, we've launched a bunch of new products recently and always internally folks are wanting to see them be like there's, there's always nervousness when we launch. Launch. They're like, it's not good enough, people don't like it, we can't launch, the quality is not good enough, all these reasons, um, why we shouldn't go do it. And mostly it's subjective, it's our own personal interpretation of how we feel about that product. And then every single time we go launch it— and launch can, like, you know, put your own version of launch, this doesn't have to be the grandiose version of launch, but literally just put it in front of customers, like start bringing folks in and having them react back to the thing every single time. The moment that happens, we get much more laser-focused on what really matters because all of a sudden you start to have real customers beating on this thing and you have real customers saying, ooh, tell me more about that, I really like that. Or why didn't you all build this? I really need this. And all of a sudden the momentum and the energy across every individual on that team starts to pick up because people are marching to this customer feedback. And I think it speaks to that where it's like, it's so much easier for us to iterate on something that already exists because you have that feedback loop, you have that mechanism to get going. And so one of the best things you can do, whether you're shipping a product or whether you're writing a document or whether you're doing anything, is just put the first draft out there and just start to get that feedback loop going. Because once you get that feedback loop going, you're gonna find you get better so much faster through the iteration process.

Wade, I just want to say thanks for, for coming on the show. Thanks for taking time to do this, and thank you for blazing your own path. And I hope maybe creating some permission, some space for others who want to do things differently, follow in your footsteps. So congratulations on all the success, and thanks for coming on.

Thanks, Erica. Uh, pleasure's all mine. I appreciate all the stuff you put out in the world. We definitely— you are one source of wisdom that like helped us on the contrarian path, I should say.

Thanks for saying that.

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The Eric Ries Show is produced by Jordan Bornstein and Kiki Garthwaite. Research by Tom White and Melanie Rehack. Visual design by Reform Collective.

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I'm your host, Eric Ries.

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