My co-founder and I have recently parted ways because we weren’t able to communicate well on some problems around our company. And because of this we’ve had to stop the development as well. In light of these events, I would appreciate some thoughts on how should we think about taking care of customers who’re already using our software, a product that will sooner or later die unless my co-founder and I make a decision otherwise.
Long-term company thinking is one of our four company values, so I’m proud to hear that’s evident from the outside looking in and that we’re living up to it.
We do point to One Ten One Hundred (One, Ten, One Hundred - A Wistia Original Series) internally as an example of this. The idea for it came up somewhat organically after Chris, my co-founder interviewed Adam from Sandwich Video on stage at a user conference that we did that year. After the interview folks on our creative team (Dan and Chris, who are in OTOH) were talking with Adam about how fun it would be to work together and they were throwing around all kinds of ideas. They hit on this idea of making three commercials for Soapbox each with different budgets.
When Chris and I were thinking about this project and investment, we tried to imagine all the ways it could be successful:
We’d have an amazing ad campaign for Soapbox
The OTOH documentary would be a hit with our core audience and build brand affinity
Our creative team would level up because they’re working on a really ambitious project with a team we really admire.
Morale boost for the whole team. This type of work is really motivating to the whole company because it’s creative and fun.
If part of this flopped, we could write about what went wrong and that would likely be a really interesting story to our audience.
We looked at this list and tried to estimate how confident we were in each. Because there were so many way for this to succeed, even if only one or two worked, we would view the project as a success. For instance, if the ads weren’t successful but our core audience liked the documentary, that would be a success (this is basically what happened).
We try to use this line of thinking when evaluating projects that don’t have specific metrics attached.
Looking back it’s easy and tempting to remember these as eureka moments, but it was very much a continuum for us. There were definitely cases where we got pretty immediate feedback that an idea was working (e.g. adding the ability to publicly share videos vs purely being for private sharing). But even in that example, for us, it wasn’t “let’s pivot to public video sharing”. We just started giving a few people video embeds. They like it, we did more of it, then decided to add it to the project. And at some point after it was working, we realized we have shifted directions.
I think getting to product market fit isn’t a linear process, and it can take a lot longer than most people would have you believe. We started Wistia in 2006 and it wasn’t until 2009 or 2010 that things started to connect with the market. Take your time and iterate.
How did you arrive at your pricing structure? I’m intrigued by its simplicity. Why freemium and not free trial even when there is a fixed infrastructure (hosting) cost for every video uploaded to Wistia?
Your customers on the Free plan will have a need to upgrade to Pro ONLY if they create more than 3 videos per month. How do you enable your customers to create more videos every month?
For us, it was all through networking and talking to our first customers in person or over the phone. In our first year of business we built a portfolio website for artists that was ultimately a failure. We took the tech and product learnings from that and built a prototype of a private video sharing service for a friend’s company needed to share videos of surgeries. From there, we started talking to some folks from the video production world who my co-founder had worked with and they became our second and third customers. One thing that wasn’t obvious to us until much later was that we thought being a small company with no customers was something we needed to hide, but it turns out that there are many people in bigger companies who get personal satisfaction from being a really early customer of a startup and helping shape the product. We met a number of early customers at startup events. Many of these folks were working on a side project or startup but worked during the day at a big company. One of our earliest customers was someone we met like this. He ran training at a huge telecom and took a shot on us mostly because it was fun for him
When we built our portfolio website for artists, we were very naive and had a “if you build it, they will come” attitude. We didn’t understand the power of marketing or building an audience before you have a product. I would start building an audience and doing marketing from day 1.
I think brand is always the right answer about how to stand out in a crowded market. I don’t mean that you need a fancy logo and polished marketing. But you need to stand for something and build an audience who cares about that thing. It doesn’t have to be directly what your product does. We found our brand voice and audience when we started making DIY video content that connected with marketers who wanted to learn how to make videos.
I think it’s a hard thing to do, haha! This was part of our motivation in raising debt to buy out our investors. We wanted to be able to make those decisions and not have to explain them to folks outside of Wistia.
More practically speaking, it was once we were profitable that we started being able to take those creative risks. Because the core business was strong, investors were happy and didn’t scrutinize investments in content marketing and more creative projects.
If those types of creative risks are what motivates you, I also think it’s possible to find investors who understand that and value it to who will cheer you on when you do it. There are probably a small set of institutional investors in that camp, but I’d bet there are many more angels.
Additionally, there are so many new types of funding available now. I’d take a look at what Bryce is doing at Indie.vc (https://www.indie.vc/) if you haven’t already. That model of funding is designed for folks who really want to grow and run independent businesses.
Even when we looked like a traditional venture-backed company, our thinking was very much of a long-term independent business, so I’m not sure our thinking process has changed all that much. If anything, it feels like our company’s structure more accurately matches our thinking and ambitions now. It feels very freeing.
I wish things like Indie.vc existed when we were starting out. Early capital brought new, experienced team members and a great network, and was a big part of what made us successful. I love funding options that have more optionality baked in so it’s not this sell or bust model.
Thanks for doing this AMA! I would love to hear your thoughts on recruiting/hiring employees for your organization. How has it evolved over the last decade or so (early stage to growth phase) for Wistia & how will it change going forward with more virtual workforce?
I wrote a bit about this in my reply to Rajaraman, but the short version is we set yearly goals at the company level, then teams set quarterly goals (most of which roll up to the company ones, but don’t have to), then individuals set goals in support of team goals. We’ve been fairly loose about the individual goals and spend most of our energy making sure the company goals are right and clearly communicated. FWIW, this is a process we more strictly adopted when we were 80+ people. Prior to that we’d try different things each year. I think the most valuable parts of this process for us are: 1) forced prioritization and debate about what’s truly important for success because this leads to focus, 2) having a simple and clear plan that’s communicated over and over is really helpful in maintaining that focus throughout the year. Most companies, even large ones, don’t have laser focus. So if our team of 115 people is all incredibly focused on a single opportunity, we can out maneuver much larger teams.
Great question! One of our longest standing all company meetings is a Show & Tell (Explaining Show & Tell — Wistia Customer Showcase). It’s changed over the years, but the spirit is the same. It’s a chance for anyone and everyone to show in progress work, things they’ve learned, etc. It’s informal and fun. We do it twice a month now, and I always look forward to it! One other thing we started doing when we were around 80 people is after our monthly all-hands, Chris (my co-founder) and I meet with each team in the company for 30 minutes. We used to do Q&A in the all hands, but we found not everyone was comfortable asking questions in that setting, especially if the question was about how something affected their team because they didn’t want to waste other teams times. I learn a lot based on the questions people ask in these monthly touchpoints, and the quality of the questions is much higher since it’s team by team and folks have had a weekend to reflect and don’t just have to think of questions in the moment during the all hands.
Hey @brendan thanks so much for taking the time to answer questions. My question is this:
What advice would you offer to an ambitious, early stage B2B SaaS company that aspires to be the mailchimp / wistia of their vertical and is all-in on the idea of bootstrapping and not taking VC? Access to capital obviously helped you to grow in the early days but it seems it didn’t fit with your long term vision of how you wanted to run a company. How would advise navigating that growth phase?
Hi Ravi, thanks for the kind words! Congratulations on your success — those are both amazing achievements!
It’s certainly something that varies from person to person or team to team, and the conservative goal setting is what I’ve found to work best for me personally and Wistia as a company. In our case, we’ve always been quite ambitious about growth and are never quite satisfied, so that motivation was always there. But that feeling of being behind each month was very demoralizing. I think one way you could try to balance things is set longer-term wildly ambitious goals, perhaps things that don’t have numbers tied to them, but make your annual goals achievable. The thing I try to remind myself of is that a goal is purely a tool, and you should look at that tool periodically and ask if it’s working for you. If it’s not helping you achieve what you want, try another tool or change the way you’re using it.
This is a great question. I tend to think that the best products are build by people with the most context and the people who care the most. At a smaller company any individual likely has more context about the customer, the market, and the business than their counterpart at a larger company because when you get bigger you tend to have folks specialize and that context gets divided up and compartmentalized. Certainly when you’re in more direct contact with customers and feel more direct impact over the business or product, you’ll care more. I think that comes through in the work. Finally, focus matters so much. Likely there’s an aspect or area of your product that is better than the big guys or something that you’re particularly focused on. If your whole team is focused on that problem or area, it’s possible you are actually investing more on an absolute basis than the bigger company because it’s just one of many things they’re doing and it’s a small sliver of a number of people’s time. I think about that a lot.
That’s awesome! It sounds like you both have a great partnership. It’s cliche, but communication has been the most important thing for us. When we talk about how we’re each feeling about certain things and what’s stressing us out it helps us avoid things getting to a point where they boil over. I do think if you’re prioritizing your relationship above the business, that’s the most important thing because that forces those hard conversations.
Congrats again on the success and thank you for the thoughtful questions!
Hi Tomas, I’m sorry to hear that. I’m sure that wasn’t an easy decision. My instinct is to communicate as transparently as you can with your customer base. As a customer, even if it’s not the news I want to hear, having a heads up about what’s happening will give me time to transition to a new solution versus being surprised about it later. Also, I think customers tend to notice when a product isn’t in active development. We’ve made plenty of mistakes at Wistia, and I’ve always found that no matter how bad the news is, people appreciate it when you tell them in a transparent way. Also, I wouldn’t be afraid to express how you feel in that communication.
I should also add that I find it helpful in hard situations like this to think of them as opportunities. It’s a time to build trust with your audience or really lead. The best leadership is done when times are hard, not when they’re easy. I find this positive framing helps me to do the right thing and go above and beyond instead of being overrun with fear and not taking action.
Hey Brendan - I don’t have a question (my cofounder @ncameron asked one!) but just wanted to say that your brand (1-10-100, the dancing homepage videos etc) is one of the small handful that I hold up as being truly refreshing and different in a very samey SaaS space. I’m a huge fan, so thank you!
We’ve probably changed our pricing over a hundred times since starting Wistia. The current iteration has been largely untouched for a few years now though and has been working well for us, particularly having videos as a value metric. Before this, usage was more or less unlimited, so we had customers getting huge amount of value and paying very little. In this mode, the price more or less scales with value. It’s imperfect (a single video is worth different amounts to different businesses) but all pricing is. We have talked about shifting to a free trial instead of a free plan since three videos is limiting to a lot of businesses. In general, I am a fan of freemium if your free plan can be truly useful to folks. Yes, it will cost you money, but I think of it as a marketing and acquisition expense.
We’re very happy to have someone using us for free with three videos and never upgrading. They’ll likely tell other people about the product if they’re getting value from it. Regarding helping people make more videos, we do this indirectly through our content (The Beginner's Guide to Video Production). But you’re right, the product itself doesn’t make videos for you. That’s always been something that’s limited us, but our thesis was and is is that more businesses are making more videos every day and that will continue indefinitely, so there’s plenty of opportunity, even if we can’t directly accelerate that trend as much as we’d like to. We do also have a product called Soapbox that helps you make professional-looking videos very quickly: Screen and Webcam Recorder - Soapbox is Now in Wistia.
Hi Sachin, thanks for the question! A lot of our early hiring was done through our networks or networks of people we brought on. We also did a very poor job of assessing people’s skill and fit and things were really inconsistent. Those practices were also terrible for Diversity and Inclusion, which is something that’s really important to us. Here are a few things we’ve done and I’ve learned since then that have helped us a lot. You can do these easily even when you’re a small team, and if I could go back in time, I would do them all:
Have a hiring manager and everyone knows it’s that person’s decision. Shared responsibility often means no one feels truly responsible.
A job posting is an advertisement, approach it like writing copy for your homepage.
Script your interviews. Write questions in advance and what a good answer for each question is. This makes sure you’re asking candidates the same things and it makes for a better candidate experience because you don’t have each person on your team asking them the same set of questions. Also, doing it in advance will likely produce more interesting and thoughtful questions.
Do behavioral interviewing instead of asking hypotheticals. The best predictor of future behavior is past behavior.
The current situation has changed our thinking about remote. Before being 100% WFH, about 10% of our team was full time remote. We also have really flexible working in general, so many people WFH one or two days a week. We’re still hiring, and many of those roles are now FT remote where they would have been in person. I think it’s likely we’ll end up 30% remote in a year or two.
But we are still plan to continue to be an in-person first team. We do a lot of creative work and much of our company culture comes from being in the same space together. Video chat is great, but I find it’s much harder to achieve limbic resonance (just learned this term last week and love it) than it is in person. I think that resonance is really important for certain type of creative work.
First off, thank you for the compliment We have looked up to Mailchimp for a long time (and continue to) so it’s flattering to be mentioned alongside them as a company to aspire to.
The angel money we raised helped us hire two experienced folks and brought us a small network of advisors. As you probably know, it’s generally quite easy to get advice as we’re thankful to work in an industry where many folks like to pay it forward. The hiring was quite helpful and it may have taken us another year or two to build up enough revenue to hire someone else. But really, most all of our growth was funded by customer revenue because by the time we got to PMF we were nearly out of cash.
If we were doing it again, I’d try to only raise money to fund efforts to meet demand. We raised money before we had fit in the market and I’d try to avoid that unless absolutely necessary. If we were to raise money, I’d look at structuring a round similar to what Indie.vc offers — have a preset way to buy equity back from investors so if you want to run an independent, profitable company for the long-term you have a clear path to doing that from the start.
I think it’s awesome that you’re going the bootstrapped route. I think being forced to make it work on customer revenue produces really great products, resilient businesses, and pragmatic founders.
Thank you for taking the time out and answering all the questions with such care and detail! Your spin on how “sales team are compatible with being product-led” is super interesting. And what you said about “doing things that don’t scale” esp. in a recession, particularly resonated with me.
So glad we could get a chance to host you and get to learn from your hard-won lessons and insights! Much like @jonny said, thank you also, for the incredible work you and the entire team at Wistia does. It’s indeed an inspiration.