A Product Market Fit Show | Startup Podcast for Founders
00:33:25 · Pablo Srugo, Anurag Goel
[00:33:25] S1: But, you know, one of the trade offs that you must have done, I'm curious on your thoughts on it, are like, you've put this product out, people love it, you get organic word-of-mouth. You can always drive more growth through not just freemium, but through spend. I mean, you could spend into it. But you always have this trade off of do I focus on spending, getting more people, more awareness, more whether it's PR, Paymark, whatever it is, there's always a way to drive spend and and get more growth. Or do I just focus on investing that time and resources into my users and building the product and the features? There's always this trade off. Like, it seems like you focused a lot on the latter, and I assume that was by design strategic, but maybe tell me more about the thinking there. [00:34:02] S0: Yeah. So the product just still needed a lot of work to fulfill everything or most of the things that our customers wanted from it. And when you're building a full platform, you can't just offer half a platform and make people happy. Right? Like, they need so much out of the cloud. Like, imagine replacing AWS with Render. There's a lot that you have to build. At the same time, we also weren't necessarily positive margins on every user we were bringing on. So we need to fix that to reduce our burn so we could actually spend money on marketing that would lead to positive revenue as opposed to increasing our burn rate. Every new user was actually increasing our burn rate at some point, and we had to get out
00:34:51 · Pablo Srugo, Anurag Goel
[00:34:51] S1: of that before we invested in marketing. It's another point. We talked earlier about the difference between how some of these hyper growth companies are so close to to failure sometimes. And this is another classic example. Like, you know, you might offer a service that you know could be profitable, but it's not profitable. And actually, the faster you grow, the more you burn. Right? You remember, like, you know, PayPal early days or like, there's I mean, there's gonna be a lot Uber or whatever. There's a lot of examples of this. It's more common than you think, but there's always this trade off of do you optimize for the margins or do you optimize for the growth in the user experience? And you have at some point, you have to make that shift, but, you know, it's it's this dance. It's this dance because if you if you overdo it on one side, you won't get the growth. You overdo it here, you run out of money. So you you gotta you gotta play with that as you go. [00:35:34] S0: Yeah. Exactly. And so we actually had to raise prices at the end of twenty twenty two, and it was not a very popular decision even within the company. But I knew that if we didn't do it, then it would mean that we're just not running a sustainable business, and it would not be the right long term thing to do. So we raised prices in January 2023. And surprisingly, we did not see a ton of churn, but our growth did slow down. So that was a trade off that we had to make at the time.
00:35:34 · Anurag Goel, Pablo Srugo
[00:35:34] S0: Yeah. Exactly. And so we actually had to raise prices at the end of twenty twenty two, and it was not a very popular decision even within the company. But I knew that if we didn't do it, then it would mean that we're just not running a sustainable business, and it would not be the right long term thing to do. So we raised prices in January 2023. And surprisingly, we did not see a ton of churn, but our growth did slow down. So that was a trade off that we had to make at the time. [00:36:03] S1: I was gonna ask about, you know, team size. Like, you know, you're four people when you launched, you were very lean. When you hit 10,000,000 ARR, like, you know, end of twenty one, early twenty two, more or less, how many people were you? [00:36:12] S0: We were probably 25, 30 people, something like that. [00:36:17] S1: And then the other thing I wanted to talk on because something else that you did differently, which is you've got a lot of users. I mean, today you have, I think, 6,000,000 developers. Is that right? [00:36:24] S0: Yeah. More than 6,000,000 folks on the platform. [00:36:27] S1: You know, back then, you you had less, but you probably had, you know, tens of thousands, hundreds of thousands of of developers. And you, for a long time, had no support organization. You didn't have really a customer success or or support. You had your engineers fulfill this function. Tell me more about how you structured that, why you did that.
00:36:27 · Pablo Srugo, Anurag Goel
[00:36:27] S1: You know, back then, you you had less, but you probably had, you know, tens of thousands, hundreds of thousands of of developers. And you, for a long time, had no support organization. You didn't have really a customer success or or support. You had your engineers fulfill this function. Tell me more about how you structured that, why you did that. [00:36:44] S0: Yeah. So in the beginning, it was actually really helpful for engineers to hear for all of us, including me, to really hear directly from our customers who are also engineers. And in many cases, we were able to fix the problem right away. And that really quick feedback loop made folks really happy even though they had run into a problem, and it made them champions. And I think that was really important for us to do, and it it made a lot of people long term happy users or vendor. And we we kept doing it until it felt like we just had too many users who needed to talk to someone. [00:37:22] S1: When was that more or less? Like, how how and how many employees or or AR did you did you start really hiring, like, a support team? [00:37:28] S0: I think we must have been around, yeah, 25 or 30 people. [00:37:32] S1: Okay. Around 10,000,000 ARR. Wow. [00:37:34] S0: Something like that. And then we hired some support folks who this is like right after our series a, I guess. And we started building out the support team. But even the support team was, again, very small. And even now, it's very small. With 6,000,000 plus developers on the platform, we're able to manage support with less than 10 people.
00:37:34 · Anurag Goel, Pablo Srugo
[00:37:34] S0: Something like that. And then we hired some support folks who this is like right after our series a, I guess. And we started building out the support team. But even the support team was, again, very small. And even now, it's very small. With 6,000,000 plus developers on the platform, we're able to manage support with less than 10 people. [00:37:55] S1: How did you structure that? Like, tell me what that that road to to 10,000,000 and and your engineers are the ones doing support. Like, how did you set that up to to make it work? [00:38:03] S0: It was a rotation. So in the beginning, we were thinking about maybe daily rotations, but then we quickly realized that, you know, the context switch is just so disruptive that it would be better to have an engineer do support for, like, an entire week. And and then do, you know, as much as possible, and then the next person would take over. So you'd effectively say, this is my support week. I'm not doing anything else this week. I'm not coding. So you in many ways, you would be out an engineer at all times.
00:38:03 · Anurag Goel, Pablo Srugo
[00:38:03] S0: It was a rotation. So in the beginning, we were thinking about maybe daily rotations, but then we quickly realized that, you know, the context switch is just so disruptive that it would be better to have an engineer do support for, like, an entire week. And and then do, you know, as much as possible, and then the next person would take over. So you'd effectively say, this is my support week. I'm not doing anything else this week. I'm not coding. So you in many ways, you would be out an engineer at all times. [00:38:34] S1: There's the the example you gave of wowing customers by being able to change something very quickly, which I could see then not just driving retention, but even word-of-mouth. But how did you see that internally as you're thinking about the product roadmap and you're having the regular meetings that you have on product roadmap? How did this exposure because every engineer would have rotated through this, and then you have these discussions about, okay, should we build this? Should we build that? How do you feel like that kind of fed into those meetings? [00:38:59] S0: Yeah. It really helped. It really helped to hear directly from customers and build true empathy. And when you're doing support regularly, you kind of develop. Back then, we didn't have AI classifying issues. So, you know, we did just did it manually. And you kinda develop intuition for the things that keep coming up, and that drives the priority and importance of your roadmap and which ones you take on first.