How word of mouth took us to 50k paying users with our bottom-up product-led model

Dan Barak: 00:00:00

the single, uh, most important channel is word of mouth. Ok. Uh, these are. People And, and there's a lot that can be said about word of mouth. People tend to, people tend to dismiss it because it's not very easy to measure. Um, but it's either people that discover text place love it. They're like, where was this all my life? This is amazing. And they can help themselves from telling. Colleagues or friends or you know, their, their community in on social media. Um, so that is by far our biggest driver.

Upendra Varma: 00:00:39

Hello everyone. Welcome to the SaaS podcast. Today we have Dan Barrack with us. Dan here runs a company called Blaze. Hey, Dan, welcome to the show.

Dan Barak: 00:00:47

Thanks, uh, thanks for

Upendra Varma: 00:00:48

having me. Alright, Dan, so let's start, uh, with your company and product first. Right? So what does your product do and why do customers pay you money?

Dan Barak: 00:00:56

Yeah, so text plays, uh, it's a Chrome extension. It's free, and the goal is to allow users to eliminate low value. Starting with typing. So at, at the simplest form, users save text snippets of of things. They type over and over again and insert them anywhere using keyboard shortcuts, and they save hours of repetitive typing very, very quickly. It's free forever. It's very intuitive and easy to start using and users love it. We have a perfect five star rating in the Chrome Web store. Uh, and all the reviews are always, where was this All my life and so on. From there, from the, the simple powerful beginning users can start automating larger portions of the workflows and really turn those snippets into mini productivity apps that are available for them anywhere that they do work. Uh, still live, you know, leave them in control, but allow them to automate the low value portions of the work. All right. And

Upendra Varma: 00:01:54

who are you primarily selling it to? Are these end, end user? I'm, I'm trying to understand your end users. Are these, you know, uh, are they using your product for personal use or are these business customers? Who are these? Talk a bit about your customers.

Dan Barak: 00:02:07

Mostly people that, uh, use TechSpace for work. Very wide range of types of users, kind of frontline users. Uh, support is a, a big vertical for us. Sales, recruiting. Admins and, and operation. But also we have a lot of people outside of the corporate world, uh, you know, so we have a lot of teachers. They use tax plays and, and people in education in, in general. A lot of, uh, people in healthcare, they use tax plays, uh, and so on.

Upendra Varma: 00:02:37

And would you consider yourself as somebody who's selling to businesses? Is that your business model? Is

Dan Barak: 00:02:42

it b2b? Yes. So very much, uh, product led bottoms up. Acquired the individual user. Um, but, and then there's a pro plan for individuals, but most of our revenue comes from the business plan, which is for teams and, and companies.

Upendra Varma: 00:02:58

Alright. Alright, we'll, we'll come back to your, uh, growth story in a while. So let me, I just wanna get a sense of your customer basis of today. So just you can give me approximate numbers. So how many customers are, do you have on your platform as that today? And how many of them are paying.

Dan Barak: 00:03:12

Sure. So, um, you know, one, one way to look at the number of users that we have, uh, is you can look at the Chrome Web store. They reported number. So we, uh, just um, very recently exceeded 200,000, uh, users on the Chrome Web Store. Um, out of those, you know, a portion are, are active, um, and from the ones that are active, About a quarter of our users are on a, on a paid plan.

Upendra Varma: 00:03:45

Alright. That's around 50,000 roughly. Yeah. That, that's pretty great, I would say. Right. And, uh, can I ask your approximate revenue?

Dan Barak: 00:03:55

So, um, we are in a r we are in the low, uh, single digit.

Upendra Varma: 00:04:04

Alright. Alright. That's, that's, that's, uh, that's a valid answer. That's all I wanted to know. Alright. And just to understand your growth, how well are you growing? So where were you, let's say 12 months before

Dan Barak: 00:04:13

today? So, yeah. So, um, uh, we roughly double your, a little more than double year of a year from the number of users perspective revenue grows, uh, slightly faster.

Upendra Varma: 00:04:29

Alright. Alright. That's, that's pretty much it. So that, now I got the context right. So, yeah. Now help me understand, right, so where, where you're getting all of these customers, right? So where are you discovering all of these new customers? So, I wanna understand your top of funnel first before we dive, dive into your conversion and all of that stuff.

Dan Barak: 00:04:45

Absolutely. So, I, I can, uh, I wanna talk about two things very quickly. The, the vast, vast majority of our users come from word of. Uh, and I can say a lot about word of mouth. Uh, let me know how much you want me to expand on it. Uh, word of mouth is often, uh, lumped in with referrals. Uh, we also do referrals, but those are very two different things with very different drivers. Um, other than that, um, you know, and word of not include, people mentioning us on social media and so on also includes c. That, you know, instruct all new employees in, in specific roles to install text plays. Uh, and then we also do seo. Um, And, you know, some other related initiatives.

Upendra Varma: 00:05:33

All right. Alright. So it's not, you know, that simple, right? So you do a C NT for the coming too. I, I wanna deep dive into this as well, right? So for example, you mentioned you, you're growing around two x an year approximately. That means you've got like approximately a little faster than that. That's okay. We, we, we'll work with approximate numbers. That's totally okay. Right? So, so you've got around, uh, around 100,000 new users over the past one year. Right? So, can you quantify where, where, what are, what is that single biggest channel that that really brought you these, you know, 100,000 folks?

Dan Barak: 00:06:01

So by far the single, uh, most important channel is word of mouth. Ok. Uh, these are. People And, and there's a lot that can be said about word of mouth. People tend to, people tend to dismiss it because it's not very easy to measure. Um, but it's either people that discover text place love it. They're like, where was this all my life? This is amazing. And they can help themselves from telling. Colleagues or friends or you know, their, their community in on social media. Um, so that is by far our biggest driver and. There's a lot to be said about that because, you know, our ideal user is the one that moves beyond the free version and become a paying customers and we, uh, paying customer. And we can talk more about that.

Upendra Varma: 00:06:53

Yeah. So let, let's do that actually. So I wanna sort of since, so, sort of wanna understand first, right? So when you say word of mouth, I know there are multiple ways that people can sort of, you know, listen about your project, right? So, but, But how are you, right. So sort of, uh, controlling that aspect. I mean, you've gotta be doing something right. Right. So what's, what's what, what, what is it that you're consciously doing there?

Dan Barak: 00:07:15

So, and okay, so that's important. So what are we doing? I'll start simple and I'll expand. We're creating the best product possible. Sure. Um, and, and we're creating the best product possible for the user that first signs up and just wants to get the value. And not worry about us too much. Mm-hmm. uh, and, and so I'll, you know, and, and that is important because there's a difference between our top users and the users that just share and, and contribute to our, to the word of mouth. Of course, our top users are the most excited and, and they contribute a lot to our word of mouth, but it's the. No, the everyday users that are not very sophisticated that drive word of mouth, uh, as well. And that, and it's important because there's a trade off between that sometimes and encouraging other growth channels that can be easier to measure. So for example, I can have a referral program and we do, can have a referral program. I can send emails, I can create incentive. To get them to become paying customers and so on. All of those can somewhat hurt the user experience of the casual user. Mm-hmm. And so we're investing a lot of time and effort and thought into how do we keep the casual user experience great. So it doesn't. The word of mouth and we sometimes. Yeah, so I, I get that you're,

Upendra Varma: 00:09:00

you're nailing your value proposition and your, your users are absolutely loving it. That's okay. Right? But it just, I'm trying to understand what's that incentive, right? So for example, if I'm a user and I love your product, I'm using it on a regular basis, but why would I go and spread the word? You've gotta be incentivizing me somehow. Right? Or maybe you are doing something. No, but,

Dan Barak: 00:09:17

but that is the key. That, and that is the difference between word of mouth and referral, right? Like referral. And we have a referral program. We provide an I. the word, the incentive to do word of mouth for the most part is because you can't believe that your colleagues are not using this app. Like they should just use it because it's great and it's free and it adds so much value. Mm-hmm. and that is what I think a lot of people get wrong, because if I incentivize you, then some people. That would otherwise refer me or, you know, through word of mouth, will not do it. Sure. Because there's an incentive program, because I tell them, please do it. I'll pay you. They will not do it. Yeah. Uh, and so that is, and, and so that is, that is key. Most of our growth comes from users that are not incentivized to drive it.

Upendra Varma: 00:10:14

Alright. So you are saying, apart from building an amazing product, you are literally doing nothing to sort of, uh, you know, make that, I'm doing a lot, I'm doing a lot. What, what is, what is it that you're doing?

Dan Barak: 00:10:26

But I'm also always trading it off against the initial user experience and the value proposition and how. Extra, uh, growth channel can hurt that initial thing. No, no, no.

Upendra Varma: 00:10:36

I understand. I'm not talking about your other growth channels. I'm talking about your, your word of mouth success that you've been experiencing so far, which almost drive 50% of your, you know, it, it, it's driving a lot. Right? So now the question is, apart from building an Amma amazing product, is there anything that you're consciously doing apart from obviously not doing, not investing in other growth channels that is, you know, sort of giving you this huge.

Dan Barak: 00:10:58

Yeah, so, you know, there is a, you know, so after I made that point, there's some, you know, so the, the multiplayer of course is, uh, a big driver of that as well. Um, we, you know, takes place by definition is very personal. Like it allows you to automate your work. Multiplayer is not that natural of an expansion, but we do allow, um, snippets to be shared. You can turn them into like shared documents where multiple people can collaborate on the same snippets, and that really helps because that allows teams. To align and that, and we

Upendra Varma: 00:11:35

allow to, and do, do you have any powered by something like that? On, on, on

Dan Barak: 00:11:39

that plan? No. No, because snippets, we try that, uh, you know, we, we wanna create as much virality as possible. But again, like people can use snippets, not, you know, for example, to send full emails or full messages. Sometimes it's just a sentence within an email. So we can't, uh, inject power by text place anywhere. Uh, we, we looked into, Um, but we do allow, uh, multiplayer where you can collaborate on shared snippets. So that really allows teams. To use text place as kind of the database of how, sorry, the database of how they communicate with customers. But, but is, is

Upendra Varma: 00:12:14

that the primary driver or is it just working as a secondary one? It does

Dan Barak: 00:12:20

drive it and so it does drive, um, uh, word of mouth. It also helps. People adopt the business plan because that's a huge value proposition for teams and companies being able to align on shared language, being able to help new, uh, members of the team onboard faster. Yeah, so it does drive growth. Uh, but it, but admittedly, It's not the main driver. The main driver is just, this is great. I'm gonna share

Upendra Varma: 00:12:48

it with you so there's no secret here. Alright. No. So before, before we, no,

Dan Barak: 00:12:52

I think that that's the secret,

Upendra Varma: 00:12:53

but yeah. Alright, so before we close the stop of final discussion, I just wanted to understand one thing, right? So when you say word of mouth, right? So what are those primary distribution channels that people use to sort of spread the word? Do you know about?

Dan Barak: 00:13:06

So it's, it's mostly people within work. Uh, they just turn around and tell their colleagues. And again, like I think the, a big one is when, and that happens regularly, is when it comes to become one of the standard tools that a team use within the company. So anyone that joins the team, um, immediately, uh, gets onboarded. And then when someone. Leaves the team, you know, it goes to another company they're already used to take place. They, they get that team to adopt it. Um, I also, so another top of channel, uh, uh, top of final channel is s e o. Um, and I'm happy to share some of my,

Upendra Varma: 00:13:49

uh, so I, I actually, so in the light of time, I wanna kind of move on to, you know, your conversion part and how you're sort of selling it to teams, right? Yeah. So, so one question here. So you mentioned you got around 50,000 paying users on your platform, right? How many Yeah. Approximately. And how many teams do you have? How many unique businesses?

Dan Barak: 00:14:08

Um, in the thousand.

Upendra Varma: 00:14:10

in the thousands. Alright, so, so help me understand, so as of today, what's your primary focus? Is it, uh, is it sort of growing, growing those businesses, right. Are, or are you just looking to sort of bring in more users or, I mean, my question is, is it a self-serve model or do you have sales reps in your team who are constantly chasing all of these free use users in your free plan and then our use sort of landing and expanding within a company. How's that whole, uh, funnel looking?

Dan Barak: 00:14:37

So currently we're still very much product focused and driving the top of the funnel, acquiring the users because we know and we see from experience that we monetize pretty well and like the self signup from companies work pretty well. We are, you know, as we grow and evolve, we. Are starting and we will start investing more in the sales, uh, effort, the enterprise sales, uh, effort. But our main focus is just, uh, user growth, uh, and growing the, that funnel. Mm-hmm. because, uh, you know, we'll talk more about it. We convert, we convert pretty well. Sure. We'll

Upendra Varma: 00:15:15

come into that. And so, uh, do you have any sales reps on your team as of today who are chasing this interview? No, I'm

Dan Barak: 00:15:21

the one, I'm the one doing most of the work. Alright, alright, that makes sense. I'll probably change in the next few months, but, uh, but

Upendra Varma: 00:15:26

it's, sure, sure. Alright, so to talk about conversion, right? So once somebody discuss your product somehow magically, right? What happens after that? How, how does your conversion look like? So let's talk

Dan Barak: 00:15:36

about what does convert. So text space is free forever. Sure. Uh, the free and, and we have companies with thousands of users that are all on the free plan. So that exists as well. Um, what the free version is somewhat limited in, in functionality, uh, but what typically happens is, You know, you have an individual user for a company that starts using it, and then they, through one of us, tell their team. And then you have, uh, a situation where a team uses text place as the database of how, as the database of how they co We have also have a product called database. That's why I get as the database of how they communicate with customers. And then managers become in. Why do they become interested? They want one to unlock the more advanced functionality and unlock more productivity and consistency in language and so on. So that's important for them, and that a lot of it is facilitated by the pro plan or the business plan. The other reason is that managers want to have some oversight and control. So in many instances, they want to control some of the communication central. Uh, and understand how the team communicates and be able to kind of, uh, adopt best practices. And that is all facilitated by the business plan, you know, including central team management and central billing and so on. And so that's why they will upgrade to the, to the business plan. So it's the additional features, but it's also kind of centralizing the team communications and ensuring consistency and

Upendra Varma: 00:17:08

accuracy. Sure. Uh, and. So in terms of onboarding, right? So once somebody starts with, starts a, you know, free plan with you, right? Yeah. And once a bunch of people in a, in their own team sort of starts using it, is there something that you do to sort of move that entire team or company to a paying plan? Or does that again happen naturally as of today?

Dan Barak: 00:17:29

So we focus, um, so we do a little. on the team level, but we focus a lot on the individual level. So when they first sign up, there are multiple touch points that help them discover the full value of text place and how to unlock it. Mm-hmm. Um, as part of that, we also show them the benefits of the company. So that includes in-app notifications about kind of more advanced features, including collaboration and things like that. Emails that include the same. We have guides on the page, but we also have a gallery, uh, and the, that gallery for, you know, we focus on specific verticals on specific ways. Use people use text space and we show them examples. Of how TechSpace is being used, including kind of user stories of companies that are using it and so on. So it's, um, different touchpoints. Some are more pushed, some are more poor, but they're all designed to help them understand the full value that

Upendra Varma: 00:18:33

Sure. So, but, but all, what all of these initiatives do is eventually help your user gain value from your product that I think you're doing, but. The reason that they would move to a paid land is because of all of these features you mentioned, right? That they, a manager wants to control in a centralized fashion, all of those things. Right? And that can happen only if you are sort of somehow talking to that manager and showing him the value as opposed to, you know, teams or individual members. Right. So is there something that you

Dan Barak: 00:18:58

do there? No. So, and that's, that's a challenge with product led companies. We, we don't, you know, we're starting to explore more ways to do more of that. Mm-hmm. uh, but, but that's the thing. Like we have our user is the in is like the, the rep. Right. And they get a lot of value. We don't have a relationship with the manager. We don't know who the manager. And until you start doing enterprise sales and kind of trying to navigate your way around the company, um, that is difficult. So what we do is we go to the individual rep, to our user. We, uh, show them the value of the business plan with the hope. That they will reach out to their manager and share it with them, but we don't target them unless the, the manager is a user user as well. We don't target them, uh, specifically.

Upendra Varma: 00:19:49

So, uh, so Dan, so what next, right? How are you gonna go from, you know, lower, you know, a million range of a r r to let's say, you know, how are you gonna 10 x your sort of overall a r r looks like you. Closing this big deal, CCR next is your only way forward to sort of grow, you know, Nutanix, right? So, so how are you gonna do that

Dan Barak: 00:20:07

and what's your, um, so, you know, to, to get to a hundred million a r you need to start doing enterprise sales. But there's a lot that, uh, you can do in the bottoms up, uh, as well. So, alright, so what are, what are next steps for me? We're going to do both. One is invest more in the top of the funnel, the user, and acquiring more users and accelerating. that is mostly focused on the product and adding more of those building blocks that people can use to mm-hmm. stitch together and create their own mini productivity apps. So just increase the value that people are getting from TechSpace and then we're going to start doing more of the kind of top down enterprise sales, uh, effort.

Upendra Varma: 00:20:50

It, it's similar to how Slack ended up doing it. Right. So, so

Dan Barak: 00:20:53

I think every product led led growth company. Uh, when done well, they all start with kind of just the, the individual users and converting them through self signup, and then eventually you start doing enterprise. So, so

Upendra Varma: 00:21:09

have you, have you started these initiatives already? Do you have any initiatives? Yeah, yeah, yeah, yeah, yeah. So how, how, how, how's, how's it been working so

Dan Barak: 00:21:17

far? No, it's working great. Uh, the main bottleneck is, as I mentioned before, just finding the right decision. And getting in touch with them. Uh, once, uh, you do that, it's not a difficult sell. The team is already using taxpayer. They already see the value. There's not, uh, long onboarding process that needs to, they need to go through. Sure. It's just telling them, Hey, you can do more. The way we typically do it is we give them a fee trial, a free pilot of the business plan. We help them onboard. We, you know, make sure that they're getting the as much value as possible for a month or so, and then, uh, sell the, the actual, um, um, sell becomes very natural.

Upendra Varma: 00:22:06

Got it. So, alright, so that, that makes a lot of sense. So let's, let's wrap this up. Alright, so let's talk about, about your company, right? How many folks on your team as of today?

Dan Barak: 00:22:15

So about 10 people fully remote, uh, All over the world really. So we work very much asynchronously. That's why we want to stay kind of as small as focus and, and nimble for as long as possible because growing a remote team has, uh, its own challenges.

Upendra Varma: 00:22:36

And how many

Dan Barak: 00:22:36

on the founding team? So, you know, the Scott and I, uh, are the co-founder, co-founders of the company. Uh, and we consider everyone out of the 10 that are part of the team

Upendra Varma: 00:22:49

today. You do. You do. And when did you start the company? What's that? When did you start the company? So the,

Dan Barak: 00:22:56

that's the origin story is very interesting. Scott actually started the company. Scott is my co-founder and cto. We worked together at Google. Uh, he's an engineering manager. I was a product manager. he studied TechSpace as kind of as a side project. Mm-hmm. um, oh, four years ago. Uh, and, and just, you know, grew it as a side project. I was advising him while I was still working at Google. And then, um, almost two years ago, uh, I left Google and joined him full-time. And then we went through Y Combinator and raised our, our seed round and so

Upendra Varma: 00:23:30

on. Right. And okay. That, that talks about your funding. And so going forward, what's, what's your, so are you gonna raise any venture based funding or how you wanna scale this company going forward? What's your vision?

Dan Barak: 00:23:42

So, uh, we will raise our, our next round, probably in the next year or so. And that will be, Invested in, in three ways. Uh, you know, first of all, accelerating our product roadmap. There's a lot that we wanna do. We don't have time to discuss it, but like, again, it's adding more and more of those building blocks. The other one is more enterprise sales, as we discussed and, and related efforts. The, the nice thing is once you have enterprise sales and you close those bigger deals, the average L t V of a user grows with it. Yes. And then that opens up the door for like paid marketing, which is something that we're not doing today. And you don't, you don't really have

Upendra Varma: 00:24:26

to. Right. I mean, you've got all of those leads just sitting out there. You just gotta pick the right person and they just close the deal, right? Yeah. Yeah. Okay. Maybe you don't really need paid marketing to. For those, for that type of funnel lead generation anyways,

Dan Barak: 00:24:37

you don't need it. But it, it is a way to accelerate growth. Uh, we don't do it today because again, like the l t V of a random user that signs up to the free plan is pretty low. Yeah. Uh, but if you convert more of them in larger deals, then uh, you can accelerate. The user growth through fairly marketing. Alright,

Upendra Varma: 00:24:56

Dan, that's, that's pretty amazing. Uh, it, it was nice talking to you. Hope you scaled, takes place to much, much greater heights.

Dan Barak: 00:25:05

Uh, I hope so too. I appreciate

Upendra Varma: 00:25:06

it.