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Summary:
- Vlad Magdalin, CEO of Webflow shares the experience of building, scaling, and evolving the company, while remembering the mistakes he made along the way and the lessons he learned from those.
- Cash is something that gives you, not just a lifeline, but also the ability to make core decisions on things that you truly need.
- Getting traction is life for business.
- Have your big dreams, and look at what you want to build in the future, but ship often, figure out what users need now and try to deliver that to them as soon as possible.
- Seek monetization, as a fair exchange of value, but also, be really thoughtful about, trying to charge sooner because it's always harder to introduce that in the future.
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Transcript:
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00:00:00
Vlad Magdalin
Thank you so much, Taylor, and just to reset expectations of it. I don't know if I'll have the time to share all of the hard lessons that I've learned. Just a few of them that have stood out over the last 700 years. That level has been in business, but actually what those been in business for different times, with four different teams and failed three times before this time that hopefully, is on a non-field trajectory. And, I wanted to tell of the journey that I went through in those multiple attempts in trying to get it off the ground that started all the way back to the more than 16 years ago. Now in 2005 while I was still in college, and having the initial idea, with the same exact name, same exact product, direction. It was the early days of web 2.0 right after the web one point oh.com crash that happened, there's still a lot of pessimism.
00:01:01
Vlad Magdalin
I had like all this optimism that, something like Webflow could exist and try to do it solo for a long time. I, it was my senior project. I tried to get a bunch of clients to build a product for them. It just could not find funding at the time. You really needed to have an entire team. There's a lot of skepticism around, would the tech investments work. Only like these outlier companies were being invested in and eventually I just had to find a real job. Once I graduated, I, I got a job at, into it. Very quickly, maybe six months in kind of got the itch to start working on it again. This was the early days of YC. This was when like Weebly and Wix were starting. Like the web was kind of having this rebirth moment where there are a lot of new startups, a lot of bowels being dropped in domains.
00:01:54
Vlad Magdalin
If you remember that, the flickers, the Twitters, et cetera. It started with two friends at Intuit and, we raised of, funding, but just ran into too many problems, had a trademark issue. All of us had very busy day jobs that pulled more and more of our attention, into work. Eventually it just, fizzled out, various co-founders kind of decided to work on other things and I decided to focus more on work. My wife and I moved to Sacramento and, decided to have kids and like at that point kind of thought that, Hey, we missed our chance. Wix and Weebly are really taking off, this chances gone. As I had kids, in 2008, tried to start it again, but in kind of a non, I was resigned to not creating a big company and just creating a really small agency where I could create a small product, solve my own problem, and, kind of do it that way without all the expectations of getting funding or having full founders, et cetera.
00:03:01
Vlad Magdalin
It was just too hard to keep the energy going, like with two young kids, with a full-time job. It was just not something that worked out over the course of time. I think I spent like four years on it, and eventually gave up, because I just wasn't seeing any traction. Randomly, this is like a act of Providence or whatever you want to call it. In 2011 and early 2012, from fail number two, when we had a trademark, I got in my house, we had moved like two or three times by that point, a trademark certificate from our first submission that somehow, the company that, had the trademark had gone out of business and this had like cleared some Q and I just saw it as a sign that, need to start it again. In 2012, I convinced my brother who was my, eventually co-founder to start working on it part-time so he was a designer.
00:03:58
Vlad Magdalin
I was more of a developer, and we started kind of jamming on it on the side, of moonlighting, of working with customers with, clients to build websites, but also a lot of focus on building a product. That's the, iteration that we'll want to focus on today because like, that's the one that actually took off. Where I learned most of my lessons, but like the takeaway there is that timing really matters. Like even when I thought I had all the skills in the early iterations, either technical, he wasn't ready, or I didn't have the right co-founders to keep me motivated and accountable. The sense of, luck or privilege, whatever you want to call it, like this event where I got this trademark certificate, just like kicked me into gear. And, it's just really important to pick the right partners, like people who I've worked with or people that are really trusted, like my brother and my co-founder Brian, who I've worked a lot with it into it.
00:04:56
Vlad Magdalin
I gave myself such a hard time through those first three failures of like, I missed the mark. I missed the boat on, building this kind of company because other competitors existed. Didn't give myself permission to think that actually a lot of things were kind of outside of my control. In a lot of this is, to a certain degree, luck and good timing and being at the right place at the right time. We ended up starting the company we incorporated, and I had as a reminder to very young kids at the time. My daughters were one in three or almost one in almost three. We had like all this enthusiasm, I sold all the stock that I could, that I had at Intuit had basically my entire life savings, which total about 20 grand, with the stock sales and poured it all into the company and got my wife on board, got her convinced that, were going to raise a ton of, funding and a couple of months, and it is kind off to the races.
00:05:54
Vlad Magdalin
My brother's surgery moved into, our tiny little condo where we had our kids' room that we cleaned out that he, crashed on the floor. We somehow had this kind of perception that we had to do all of this stuff to run a startup. Like we spent half a day in a park taking professional headshots, even though we didn't have a product, we didn't have a website. We didn't have anybody who cared about like what were building, but we just like somehow had this checkbook, like list of things in our minds around like what real, startups do. In retrospect it was kind of silly. We like thought that, Hey, we have almost unlimited money. That's what it felt like at the time we have 20 grand that's in this business account. What do you do with that first by brand new MacBooks, which is exactly what we did.
00:06:43
Vlad Magdalin
Here's my wife, the voice of reason saying is that the best idea, and me rationalizing Yale, like you need to have the best equipment to make that happen, but don't worry. We're going to do this Kickstarter. We're going to raise 300 grand and everyone's going to love this product and it's going to buy into it. Of course we pour in, something like $12,000 into this Kickstarter video. We have to rent like this massive flat that looks like modern. We record this entire video around the idea of what flow, the product we're going to build. Of course it's like a plea to the Kickstarter users from other videos that we've seen that were successful. At this point, most of our money is gone. We even had like this, the guy convinced us to do a little keyboard, cat, impression that surgery almost made on the internet, but I'm glad we spared the world from that happening.
00:07:41
Vlad Magdalin
Reality started to hit at this point, we're almost out of money, but we still have all this optimism that we're going to post the Kickstarter. It's going to go bonkers. We're going to get all this money and we're going to build the product, et cetera. On that emotional high, we decided to, apply to YC thinking that, Hey, we have this great idea. We have this Kickstarter video that we're about to put up. In a matter of two days, we got both a rejection from YC saying that, they're not open to interviewing us in that round and Kickstarter telling us, Hey, actually we don't support SAS software ideas. It has to be downloadable, or it has to be something that you physically shipped to people. Of course our entire videos like, Hey, Kickstarter, Hey, kicks are like, you can't just like ad-lib, or Madlib, Indiegogo lane or something like that through post-production.
00:08:32
Vlad Magdalin
It was essentially a completely shot project that we had to throw away. Went into like just deep work mode, two, we moved to this place called the hacker dojo, which is completely free, but also pretty, you kind of had to fight for space and had to be there like super early in the day, to get a table to work on. Then, we're kind of at the precipice of like nothing's working, we got rejected from, I see this Kickstarter doesn't work. Right at the end of the year of 2012, my daughter gets really sick, and with a life-threatening condition. Of course, when we started the company in September, I had personally made the calculation that like, Hey, families, healthy kids are young. If something happens, like all we really need is catastrophic health insurance. Our health insurance was of the variety where it's like a 10, $15,000 deductible, where just the tests alone to figure out what kind of surgeries she'll need, came to like $12,000 or whatever.
00:09:35
Vlad Magdalin
As it's close to the end of the year before the surgery actually happens, it rolls over to January 1st and the deductible resets and all of a sudden, like we're completely out of money on borrowing money on credit cards. Things are really tense at home. Thankfully we're able to borrow enough to like pay for the surgery. And she's perfectly fine now. Things are getting so tense that we're just like scraping together money. We sold the family car that we had of equity and converted it to a really cheap lease. And then surgery. I figured out like just to survive on the company front, we found this restaurant called the gammas where four for $8 and 30 cents, you could order one fajita plate that came with two like fajitas, but enough raw materials to make two burritos. So that was our daily sustenance. We were just like, go to this place once a day, have those, have an $8 and 30 cents meals, expense per day.
00:10:37
Vlad Magdalin
And that was, keeping us going. And, and the thing that really brought it home, like the one gift my wife gave me, that Christmas cause that's how things felt at home was this placard, like this thing where, this frame $20 bill that said in case of emergency break glass, and were such a, like hanging on by a thread where we started talking about, like surgery, my brother moving back to San Diego, getting his job back. I was already talking to Intuit colleagues to figure out if there was a place back for me, at Intuit so that we can kind of Moonlight on the side. So big, huge lesson there. Even though we didn't have that much cash, it felt like, we had enough that it didn't give us this sense of, frugality and sense of scarcity that we just in retrospect wasted it on these large projects, not really thinking carefully.
00:11:30
Vlad Magdalin
I, I would encourage every startup, like whatever cash you have, cash is king. Like, it's something that gives you, not just a lifeline, but also the ability to make core decisions on things that you truly need. Also read the freaking terms of service, cause that is something I still regret not doing to this day. We're in this kind of mode of, okay, we have to like either shut down the company or move to back to our old jobs. Why don't we give it like one last shot? So we gave ourselves two months, this was kind of a decision we made in January of 2013. We're we're can't we just don't have the time. And, energy, I wouldn't say energy. We had the energy, but we just didn't have the scope of the product we wanted to build was way too huge. Why don't we build just a demo, that will show people what the product could be.
00:12:25
Vlad Magdalin
Cause that's the only thing we can realistically build. Our third co-founder Brian joined us at this point. We were coworkers at Intuit. We started building this product and eventually came up with this, like demo set. You can still see it@playgroundatwhat.com, which was not an actual product. You couldn't actually do anything with it. You can save or design a website. It was just an idea for an interface for how a non coder, or a non developer or a designer and entrepreneur could make changes on a canvas, that typically required code, but do that through a visual interface. We had, it just felt like such a hail Mary because, a, it's not a product that people would pay for. It's just an idea of something. On the morning that we, tried to launch it, we had like all these definitions for who this product would be for designers, and for entrepreneurs.
00:13:21
Vlad Magdalin
Where do they hang out? So we found some design forums, those like some Reddit, subreddits around where designers hang out and we posted to all of them. And nothing really took off. There was no traffic coming from them. I remember that ominous morning when, were just seeing that there wasn't any traction coming from trying to get this into the hands of designers. I went to Starbucks and there was like, this was always ominous for me or like, my name is misspelled. I just knew that it just felt that day was not going to be great. As a hail Mary, like somewhere through the day, we just decided, Hey, why don't we try hacker news, which is primarily a developer centric community. We just had every doubt that it would, take off there, but it was worth a shot. We put it up there and it's just over the course of several minutes, completely changed, flipped our world upside down.
00:14:16
Vlad Magdalin
Oops, sorry. Somehow I moved my screen. It just completely flipped our world upside down. We had in the span of several hours, 10,000 people signing up and then through the course of the day, almost 20,000 people signing up for not even a product for something that was going to be a product in the future. It was such a huge surprise to see the developer community, like people who typically we thought would, they were in the past, like really arguing against tools like Dreamweaver or Whitson, Weebly, et cetera, that don't generate clean code, et cetera. We're just giving us all this positive energy around like, Hey, you might've actually cracked the code around empowering designers to build like developers build. It was just a, such a huge day for us because, we're deeply in debt. We're, we're on the precipice of quitting and going back to our jobs and here we have, this amazing traction, that is just a jolt of energy and hope.
00:15:25
Vlad Magdalin
From that for, the lesson is if you can get attraction that is life for business. I also want, don't want people to walk away here, like hearing my story and think that, oh, I might be in a situation where I'm, really deeply in debt or, making decisions between family and startups. I just want to recognize that what happened to Webflow, what happened to me, there's just so much survivorship bias built in to our story, that it just happened to work out. We were at the right place at the right time and, lucked out with, being like putting one foot in front of the right people, so that we can get that traction. Like once we got traction, it unlocked so many more doors for us. So right. As, as that happened, we finally got more relaxed. We, moved to a different co-working space, started working, on the product and decided to apply to YC again.
00:16:23
Vlad Magdalin
This time we felt a lot more confident that because there's some indication of user demand that we would have a better shot this time. We applied, went to the interview and walked out of the interview feeling like completely digital, thinking, there's just no way that they're going to say yes to us. We get peppered with a lot of questions that we didn't have great answers to. So, and this was kind of midday. We decided to go to mountain view and grab a couple beers, but we're still super nervous. Just to kill time, went and, buy tickets to oblivion with Tom cruise, which was kind of how were feeling at the moment. It also happened to come out that week or the previous Friday or whatever we're sitting in this movie, nervous waiting for a call. The way YC works is if you're in, you get a call, if you're rejected, you get an email.
00:17:13
Vlad Magdalin
I see my phone buzzing with like a 65 oh, area code, which, kind of recognize that somebody in the area and I hop out of the movie theater and of course it's somebody from my SI saying we would love to invest. You guys did a great job. Do you accept these terms, et cetera? And I'm like, yes. Brian surgery ran out and obviously we really have Abby, hugs so around, we're calling our families and our significant others got dinner arranged. And, because was a couple hours from then we just went back and finished watching the movie. As we're watching the movie, I'm kind of instinctively still checking my phone. Out of the blue comes an email that says, unfortunately, we decided not to find you at this time. The reason is exactly why I'm with, think that workflow would be rejected. Like your product is too technical for non-technical users and not powerful enough for technical users.
00:18:12
Vlad Magdalin
This will make it hard for you to achieve the kind of revenues that we as investors hope to see. It was like being at the top of the world and then crashing back down to, the Mariana trench. It felt, at the time. We call our families and say, Hey, dinner's off. We'll try to call YC would try to respond to the email. Eventually we just decided, what, we're just going to drive over there. Even though it might be closed just to see if we can, get on somebody's radar and see what happened. As we're driving there, we receive a phone call that's and we're sure that the phone call was in the stake at this point, because they didn't say the word Webflow. They didn't say my name. It was like a more generic, like welcome to YC, type of phone call, whereas this is super specific.
00:18:55
Vlad Magdalin
We knew for sure that this was the real rejection and the phone call was a mistake. As we're driving to their office, we'll get a phone call that says, Hey, we're really sorry. Like the email was a mistake. I wish we had taken a photo of that moment because it was like the most elated feeling ever. Like if were feeling high at getting in, knowing that were almost rejected and then, like truly getting in, felt, were over the moon. The only thing I could find was a stock photo with three guys. High-fiving, that's all you can get at this point. We go through YC and it was really grueling, where, we had to wrestle with a lot of our own sense of, we, most of us were designers. We wanted to create this perfect product. We had this idea for what people would pay for what people wouldn't pay for it.
00:19:46
Vlad Magdalin
Cause every one of our competitors at the time like Squarespace and Wix and Weebly and Adobe had a, blogging and publishing and multiple pages and a lot of other things that we didn't, and our tendency was to, delay launching and delay charging for it until we had all those things, which could have taken years. One thing why C I'm so glad that one of the partners did was like, they just said, Hey, if you don't launch this thing, if you, even if you're, embarrassed by it to a certain degree, then we might actually kick you out. Because that, this is the point of YC to make sure that we get to some, marketable product within a very constrained time period. It was such a key lesson for us because the product that we wanted to the product, were comfortable building and releasing and charging for it, we didn't end up building for another couple of years.
00:20:39
Vlad Magdalin
There was, much more demand than we thought for the product that we filled super lightweight product that we launched, around demo day. The big lesson I learned there is like, have your big dreams, and look at what you want to build in the future, but ship often, figure out what users need now and try to deliver that to them as soon as possible. Also at every step of the moment, we're very uncomfortable what were charging. Every step of the moment we found out that people were willing to pay much more, in many cases. I would encourage all startups to a seek monetization, as a fair exchange of value, but also, be really thoughtful about, trying to charge sooner because it's always harder to introduce that in the future. We're in YC, we finished demo day. Of course you think, the story in our heads is, all these, other success stories you hear before, once you're in YC, you're going to have no trouble raising money.
00:21:38
Vlad Magdalin
We start doing all this pitch training, where, extreme or at least was an extreme introvert were going up on stage, was the most anxiety inducing thing. Like the fact that I'm even talking to this group right now is kind of a modern day miracle, but we did all this, kind of speech training. We launched the product, we had a, a tech crunch, announcement, and we thought surely like the investor dollars are going to pour in. We did find some early investors that put in, about $250,000 or just shy of $300,000. Every, a lot of the startup, the VCs we pitched after demo day were either like, no, but most likely a, no answer or a delay, or a, can you come back again? And I just remember those days being, really anxiety inducing, where we spent more than a month, not really building product, not really, focusing on anything that was important for our users.
00:22:42
Vlad Magdalin
Just like waking up every day in like cold sweats, pitching more people. Not really knowing where the company is going to go in terms of runway. Eventually we met with, Paul Graham at YC and he just gave us permission and said like, Hey, look, this is obviously really hard for you guys. Like, you're seeing a lot of resistance, from many investors. And, you can just make the decision. Now you have $300,000, there's three of you, there's enough runway for three people. Sure. You, you might not be able to, hire the team that you want, or it's not going to look like all the other startups that are raising, $3 million rounds at the time. You can actually focus on customers and on users when they need you most, because were really starting to hit a, a wall where like people noticed that weren't improving the product.
00:23:35
Vlad Magdalin
We were just out, raising money. The second that we did that just decided like, Hey, we're okay. Not raising more, we're actually going to revisit that conversation later and told that to a lot of the investors that, or either, kind of a wait and see then immediately a lot of, conversations started happening really quickly. The moment that weren't desperate for the cash, and we felt like really in control of, being able to survive for another year, it just like a remove the sense of desperation from us and the signals that we send to other investors, a sense of FOMO kicked in with a lot of, where, we really rounded out, a pretty healthy seed round of $1.4 million. Soon after we decided not to raise more, so maybe the lesson there is like investors, want to invest disproportionately to how much you need them to invest.
00:24:28
Vlad Magdalin
So, so the less you need their cash, the more they're willing to invest. Again, we just felt really happy that we had at least that financial burden from, yes, but then we switched back into normal. We got an office, went to Ikea, I got a bunch of desks, but then together got a ping pong table, got some interns, built a Kanban board, wrote down this big, hairy, audacious vision that 50% of the internet is going to be powered by web flow. Started doing retreats, got another office that was a lot fancier got like a started having Christmas, parties. I had this like big moment where I was sitting down and looking how fast our revenue was growing, which was not that fast and how fast our expenses were growing, which was really fast. The curve for how much w how fast were losing cash, was really scary.
00:25:25
Vlad Magdalin
I figured that we would be, out of cash in 11 months if something didn't change, because it was actually starting to accelerate, like were hiring people much faster than were growing revenue. That's when I decided like, Hey, we really have to focus on sustainability and being default alive, rather than having to go back through that same experience of having to raise money just because we have to. We're really focused on defining our pricing. We started working on a product, our visual CMS that we thought was going to be a major revenue driver. We launched that. I remember this one moment, coming over after the launch of the workflow, CMS coming to the office over the weekend with my wife and kids, because we would sometimes go to the city and kind of go to the zoo and stopped by the office. I was sitting there, at my desk, looking at revenue dashboards in QuickBooks, where we could see expenses.
00:26:19
Vlad Magdalin
I realized that like art, the graph was inflecting, like, revenue was starting to grow faster. We really, since we decided to, slow down hiring, our expenses were growing much slower. I finally had this realization that we might be sustainable without any additional cash input. I looked to the side where I saw my daughter and I took this picture, where she was writing the wall. Web flows is the best because my dad works here and I had this moment of like realization of freedom of like, Hey, this is actually something that can last and endure forever if we choose 42, because we are now in control of the two main variables of revenue and expenses, because we can make the choice to be sustainable. That felt like the ultimate freedom at the moment, where we just felt that maybe we'll grow slower, but we have, the, that lever to pull of how quickly we grow and how well we serve our customers.
00:27:20
Vlad Magdalin
Don't work ourselves into a situation where we're desperate to raise, just because we have to just because our expenses grew much faster than our revenue. That just puts you in the driver's seat. It gives you the ultimate freedom to optimize your people, your mission and vision, and less so just the sheer survival of the business. Just as a little tidbit like that, when we launched that CMS, the inflection we saw in revenue, we thought was going to be, game changing. In retrospect, if you look back over the course of time, like that's the blip that was, which maybe there's a little mini lesson here around, this is really the long game. No single feature that you're going to launch is going to be, and make it, or break it thing focused on overall, bringing value to your customers and listening to them and it compounds over time.
00:28:16
Vlad Magdalin
Now that we've had this sustainability moment, we really started focusing on building an enduring company, like one that would last on its own accord. We started hiring more people, but in a way that was very thoughtful, like as we got more revenue, we'd hire another designer as we've got more revenue, we'd hire another developer. We started having larger retreats where, the team grew over time, but it was very much scaled to how were serving customers, because our customers were our main source of funding. We're getting like these mini funding rounds from Stripe every week, when, customer accounts were cleared. Eventually we reached, almost 150 people. That's when we instill on our own terms where we're running in a very sustainable way, where we're cashflow positive, profitable in certain quarters. It really put us in the driver's seat, like I mentioned before. That's when we started thinking about, okay, like, what is, what does it mean, to scale the, our ability to have, a huge impact in the world? Oops, I'm sorry, this keeps happening.
00:29:31
Vlad Magdalin
What does it mean for us to scale as a team, to take our mission and vision and actually bring it to more people sooner, like the path, guarantees that you can do that for as long as possible. There's also a, non conflicting path where you can augment that with more capital to accelerate that trajectory without risking the sustainability of the company or the long-term endurance of the company. That's what I really started considering, adding partners that are true partners, that are, first and foremost, firm believers in the mission and vision of the company and join essentially as, extended co-founders or extended team members, that help us get to that, climb that intimidating mountain that we're climbing, because they have the experience to do that. Even though we talk to, I would say hundreds of investors across many different firms, especially as workflow became more and more, profitable, more, kind of sustainable, only a few.
00:30:41
Vlad Magdalin
You have these relationships really, rose to the rose, to the bar of like true partners. People who really believe in our missions. First and foremost, they want to make the internet, a lot more, rich and help it come to its full potential, by empowering more and more people to build for it right now, the power to create for the internet is kind of locked up unless we're talking about like YouTube comments or, a medium post or something like that, the power to truly create software for the internet. It's still locked up in like one out of every 400 people, like 0.2, 5% of the world. And, and we found partners that truly don't find that acceptable and want to do everything possible, to bring that kind of empowerment, into the world. Also create the kind of company where, each individual on the team can feel like they're having impactful and fulfilling life.
00:31:37
Vlad Magdalin
It's not just about the business or what we're doing for customers. It's also that the kind of team that we want to build internally and what kind of feeling that we want to have with the people that we work with and how we prioritize people overall. In, as a, it thought through like how to partner with these folks, it was really important to like level set, with each partner first, it was a ruined at Excel then, later on Layla from capital G joined us, around the importance of, like reframing this idea that a board or set of investors is like a boss to a company. They're there to, kind of, keep a company in check or whatever, but truly as partners and equals people who have had more experience, scaling companies have a lot of, resources and connections to help us on block, certain problems and tackle certain, challenges as we scale.
00:32:35
Vlad Magdalin
Not see it as a, sorry, this keeps happening. Not see it as a, primarily a financial outcome that they're seeking. Sure. That's important, right? There's there should be a return for a, an investment, but truly the most important thing that we're solving for is the expansion of what flows, mission and vision. I even took it to the degree of signing, social contracts with each of these partners, things that go far outside of a term sheet. And, and that even challenged the very idea of the Friedman doctrine, where it's like, if you solve for shareholder value, then everything else kind of solves for itself. Instead, we look at this, there's this perspective called the infinite game. We're kind of playing this game where, it's not like a basketball game where there's like a score and then there's an end. We're really playing an infinite game where our goal is to expand, and, promote this cause that's much greater than ourselves and create a company that will outlast all of us.
00:33:44
Vlad Magdalin
That requires a, a focus on relationships, the focus on people, a focus on sustainability, that might not be, the most natural, when you see a business opportunity and you can say like, I can pour all the money we have into that, but if it risks the sustainability of the company that becomes a problem, and you have to find partners who really aligned to that perspective, because then they're truly partners. They're not like people constantly disagree with. The kind of takeaway there that I came to is that it's so important to focus on what you do for people, which people you partner with, and what kind of people that you work with and who you serve. And, and finding those, key individuals that not only can bring value to, expanding your mission and vision, but also are completely aligned with the values and principles that you hold so that you're not constantly battling on the things that are so important.
00:34:48
Vlad Magdalin
You should be, you should be working through challenges that are outside of values and principles. Like it's so hard to, align on values and people are so different, in the values that they hold. Biggest piece of advice is to really take the time to pick the right people that share your values as you partner with them. I know I'm probably way over time here. My top takeaways here, in how at least up to this point, I feel we've gotten to building a sustainable and during company is to seek becoming a default alive as quickly as possible, which means like, be getting enough revenue and cashflow where you feel that you're in control of your destiny. You can move the levers of, either growing revenue or controlling expenses, and spending, really wisely to where you feel that you can, the company can survive forever, without additional, investment.
00:35:51
Vlad Magdalin
That just gives you so much optionality. Most importantly, it gives you the time to do number two, which is to choose your partners wisely, because if you are not in a place of being default alive or not in a place where, your business can sustain, on its own, then you could be in a position where you're pretty desperate to, pick any partner that will give you money. That's almost like, rushing into a marriage just because somebody is, might have some like factors that make your life easier for a moment. But, over the long course of time, it's not a, a partnership that had the time to develop and align on values and really understand like where each individual in each person, kind of fall in terms of principles. So, really like we spent so much time, I spend time with my family in a rooms, family, like, unfortunately with COVID, Layla's family and our family weren't able to get together yet, but there was a lot of like conversations, virtually et cetera, where really like these are multi-decade type of relationships.
00:37:06
Vlad Magdalin
Choose them really wisely and make sure these people really care about the future mission vision of your company and are not just solving for some financial return, but again, being default alive, it gives you the optionality to do that for years, right? Because you're not rushed into that decision and you can make that decision thoughtfully. And finally, it's all about people. Like a lot of people will say, oh, it's a businesses goal is to, increase revenue and build shareholder value. Really like, where's the purpose in that? so one thing I've learned is that, everything about this business, the business is just a vehicle, to advance a cause greater than yourself, to bring more value into the world that hopefully makes other people's lives easier. And, to serve the people on your team, like this is a group of people who are committing so much of their life to building a product or building a company, that is, such a big part of their lives.
00:38:06
Vlad Magdalin
So, so those people matter too. And, the people that you bring on as partners, like first and foremost, they're people relationships. Not like business relationships, the business is just a vehicle, to, or a structure, to organize around. To me, or at least to me personally, thinking about a business just purely as a business is, has never been really all that inspiring, but thinking about what, who are we solving for? Who am I doing this with? what, how are we making other people's lives easier? And what value are we bringing to the world that truly, empowers others, and enables others to succeed? It's ultimately about the people. So, with that, I think that's all I have. I just want to thank you all for listening and we can open it up for questions, if there are some, actually I see that there are some in the chat already.
00:39:05
Taylor
Yeah. Thanks for a great presentation. Blaton just from the event platform, you have some OG folks in the room too. David andrew. They've been using Webflow since 2013, so that's really cool.
00:39:16
Vlad Magdalin
Nice. That's longer than I've been using it. All right. I see some questions here. How to investors react to brother co-founder? honestly it was, there's a lot of precedents set with, Patrick and John at Stripe, and other places where, no eyebrows raised. There's a lot of trust that's built in to a sibling relationship. We didn't have any red flags around that. I have four other siblings and I think surgey, and, Natalie, our sister also works at Webflow. There are some siblings that would be much easier to partner with than some siblings that, were not quite on the same page. We didn't have any kind of feedback from investors on that. I see Misha asked, what do you think is the biggest difference between being a founder now versus 2012 for those starting companies who, first of all, I think terms are much better now. There's just, the technology companies are valued much higher.
00:40:21
Vlad Magdalin
You have to, sell much less of your company in terms of equity, in order to get a, similar investments. That's something that is really founder friendly. There's also a much bigger recognition that founder led companies are, long-term most sustainable and successful. Before I, in the multiple times that I was starting, like that story shifted quite significantly where it used to be like, Hey, founders who are not experienced, I wasn't an experienced founder at all. I was a software engineer before starting Webflow. Didn't really have experience managing people or hiring people or, leading larger teams. There was kind of this theme that you can go through the early years, but then you have to bring in a professional CEO or an adult in the room or something like that. I think that trend has, more or less gone away, thankfully. There's been more and more trust placed in founders, given the right support to scale companies into, IPO territory, et cetera.
00:41:26
Vlad Magdalin
So, yeah, and it's, it feels like even despite, COVID, and a lot of the setbacks we had last year, it's just a great time to start technology companies. Like there's a, the entire no-code trend, not to kind of do a shameless plug, but it's so much easier to build things now because a lot of, things are abstracted, that weren't before. It takes fewer people to build the same things that it took, 10 years and definitely a lot fewer people to do the same thing. To 20 years ago you had to like rack your own servers and, buy all this equipment and hardware just to launch a little web app today. You can do that with one person in AWS. There's just fewer obstacles, and, a very rich environment, funding for the most part. There's still a lot of areas where there's under a lot of underinvestment, especially, with, historically marginalized or underrepresented founders.
00:42:29
Vlad Magdalin
There's still too much of a reliance on, individual connections and network effects, that I hope to see a lot of change around, but, the environment is really friendly to start a new venture. Right now, at least from what I'm seeing in the market. Another question came in, it seems like what flows sometime 2016 or so became a designer's favorite? What changed if anything? I'd say the slide I had, where we had an expectation that at some point there would be an inflection point, but it really was gradual. I think it's so much of, it was word of mouth and people seeing success with building websites and applications and style guides and like building things that actually go to production without requiring an engineer to translate those things, to reality more and more of those stories started being told, where you could just do a lot more, with what flow in.
00:43:29
Vlad Magdalin
Of course we kept innovating on, new features and things like that. So it wasn't really any one thing. It's just the combination of a lot more people being successful, with the product for me, a community where people are helping each other, combined with just more capabilities that were releasing. It didn't feel internally that there was like a magic moment, like aha, where we're a designer's favorite now. It just kind of started happening slowly over time, and hopefully we can keep that designation for as long as possible.
00:44:11
Taylor
Anyone else have questions for loud? We have a few more minutes with them here. If you're in the room, feel free to, pop on your camera and unmute yourself. If you'd like to ask live loud, we are seeing, a couple of folks in the chat. Chris Bowen said that he's been to Animosa many times.
00:44:29
Vlad Magdalin
It was literally the reason we're, one of the reasons we're Still here, just because that saved us so much money. When, when Brian joined as a co-founder a few months in, he was like, no way, can we do this? So we switched to specialties, which was like a sandwich shop that had more variety.
00:44:53
Taylor
Alan's asking what helped you develop the people management skills you didn't have as a software developer?
00:44:59
Vlad Magdalin
The biggest thing honestly, was, the biggest unlock for me was reading a book called leaders eat last by Simon Sinek, which is all about, how do you understand the needs of your team, and serve those needs, versus just like directing them to do something. That was a big unlock that, led to better understanding, like what, where people find impact fulfillment, sense of autonomy ownership, a sense of purpose, et cetera, and just really having that as a conversation, rather than just like seeing people as, worker bees, or people to direct, resources to direct. I hate that word resources. That was really a, a big piece of inspiration for me. I know a lot of people like mentioned high output management and, other things like that. For me, it was that book that really helped me develop into, a leader that really empathizes with people and their goals and their own careers and tries to motivate folks to focus on the right things.
00:46:13
Vlad Magdalin
There was another book called drive, by Daniel pink, I believe where it really tries to frame what motivates people to do the best work of their lives is having autonomy, having a sense of mastery or mastering their craft or their chosen profession, and a sense of purpose. Like why is the work that you're doing? how is it helping other people and making the world a better place? that really helped too, but this is like an ever evolving journey. Like every moment, every day at Webflow, there's like, this is broken or that's broken. I wish I was a better manager. I always wish I was a better leader. Like, why do people trust me to even be in this position? not having done this before. So it's a really messy process. Just those two books have really helped shape my, perspective in terms of management. Awesome.
00:47:06
Vlad Magdalin
There's another question. How early did you create your company values and have they evolved at all in your growth trajectory? we actually ended up creating them about, four years in something like that. Our values were kind of, we call them core behaviors, values, you can state something that you believe in something or that you value something, but how you behave is truly the, what proves that you're living those values. We created them in 2017, I believe, and we articulated the second part of our mission. So we have a, a two-sided mission. One is to empower people to, create software that code that's the, what we're kind of bringing for others. The second part of the mission is to create the kind of company where each individual can live an impactful, fulfilling life, whatever that means to them. That was defined at the same time that we defined our core behaviors.
00:48:04
Vlad Magdalin
And, and that was really key in, kind of helping bring on the right people. They have been like shifting over time, where we're talking about, some potential tweaks to them. Like we used to have one that was, called move uncomfortably fast. That was very like, move fast and break things. We changed it over time to move intentionally fast, especially as you move through scale, you don't want to break a lot of things, and you want to, proceed with intention, but still, keep speed for customers as a top level principle. So there's, there've been changes like that. I think, as the company grows and scales might, tweak them even more. The most important things have been kind of the combination of these two missions, that live side by side, that value both the product that we're creating in the impact on the world, but also the kind of company what we want to create, which is a product in itself.
00:48:59
Vlad Magdalin
Very important to a lot of people, including myself,
00:49:05
Taylor
A few more questions coming in through that platform. Ahmed's asking, how do you think the designer's role will evolve in the next few years?
00:49:14
Vlad Magdalin
Oh, this is interesting. I think designers will become, closer and closer to production. They will be what I believe, what we call visual developers or software designers, where what they create is not just an idea for what's going to go live. In many cases it is the thing that's going to go live. We're kind of removing more and more of the translation layers, which doesn't mean that we get rid of developers like there's, we're going to need way more developers than we have right now. In fact, the rise of designers who are able to take things to production will actually necessitate a lot more developers, because there's all will always be custom things that will need to be done through code that can't be done through no code or visual development tools. Designers will play a more and more critical role in the creation of the actual software.
00:50:03
Vlad Magdalin
What, it's not just like here's a mock or here's an idea, and somebody else will build it. It's going to be like building the actual thing and pushing into production. I mean, that's happening with web flow every day where like designers are not driving all of the marketing, experience and in many cases like even applications, because they have like a visual development environment that helps them, push that kind of power out to the world without relying on developers. That trend is well on its way. There'll be more, designers will be able to do more, but also the expectations of designers will rise where it will, more and more companies will expect that designers will need to understand kind of the core principles of software and how to take things to production. Not just, you know, build an idea.
00:50:51
Taylor
Awesome. Thanks for your question, Ahmed. A couple of questions are coming in about enterprise related things. Jason's asking what are the biggest customer use cases like? Are you going more enterprise?
00:51:05
Vlad Magdalin
Yeah, well, the way we look at enterprises, a hundred percent of our enterprise accounts come through self-serve so people at companies start to use Webflow. They really love it. It expands to larger teams. Some of the biggest use cases, our entire marketing departments run like removing their dependence on engineering. Usually like marketing has to borrow engineers from a product, and it's something that nobody really likes, like product engineers love working on product and marketing. Doesn't like being beholden to engineering or waiting, weeks if not, months to get a change made. The biggest use cases is teams of designers and content folks like running all of, a marketing presence, the primary website, primary.com, et cetera. There's a bunch of other use cases around like building prototypes and like fast, kind of product vapor tests, and, things like that. Primarily it's how do you take the entire marketing function and give them the tools to go live to production very quickly and iterate very quickly, by giving them the tools to do it visually, without that translation layer.
00:52:15
Taylor
Awesome. As a followup question to the enterprise stuff, and she was asking, do you have sales teams selling to enterprise or sales, but all bottom up, if you do have a sales team, when did you start hiring them for enterprise specifically?
00:52:29
Vlad Magdalin
Yeah, we have a new sales team that we started hiring last year. Just as COVID was starting, that was unrelated. It was because we saw so much demand from self-serve folks saying like, Hey, we need, an SLA or security or better roles and permissions, or we just don't want to deal with seats, or like credit cards. We want to do things with invoices or whatever. It's like organic that, we saw more and more of a need for like sales assisted, a sales assistant motion. We started building that team last year, right now, I believe, all in, cause it includes like our partner emotion or, experts, program, like that team is, a bit over 10 people, more or less. That revenue has been scaling very quickly. I think we 10 X that over the last year, kind of on a smaller base, but our 10 X again this year, so it's a big opportunity for us, but we always see enterprise as a, like we don't see ourselves becoming an enterprise company where we want Webflow to be a fundamentally empowering technology for everyone so that everyone can build software.
00:53:44
Vlad Magdalin
And as can enterprises. Right. Just because they're willing to pay more, does not mean that we just like cater to those use cases, but thankfully the vast majority of like the features and things that you need to build, whether it's a user at an, a designer and an enterprise company or a designer, that's a freelancer that's working for, small businesses, it's the same product. We, we build for both a lens that, serves both needs. Far it's been, a really great kind of start to our sales team. It's all, kind of inbound kind of taking over inbound leads, people who are already using Webflow, kind of showing them the power of it, and expanding into larger accounts, but it's still pretty early for us, to see where it'll go.
00:54:33
Taylor
Awesome. Well, glad thank you so much and thank you to everyone for joining and for all your great questions. We just really appreciate your sharing, your incredible story with us. For joining us on faster, there are a few more sessions throughout the rest of the day, everyone. Definitely check those out and we'll see you soon. My pleasure. Bye everyone.
