NPLG 12.15.22: Bootstrapping to Millions of ARR with 3 People and PLG
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NPLG Startup of the Week: Userflow
Executing on PLG is hard - you must build a product users love, repeatedly use and then pay for. It is even harder to launch and scale a PLG startup without external funding. When the Userflow team reached out, I was first impressed with their no-code onboarding tools to empower teams to build customized in-app tours, checklists and surveys, without needing help from developers. Not only is Userflow a PLG company in how it engages with its users, but it is also a PLG enabler in that it enables PLG companies to improve their own user onboarding flows. I was really impressed when I next learned that Userflow is at a few million in ARR with only 3 employees (!!!).
For this edition of Notorious PLG, Co-founder and Chief Growth Officer Esben Friis-Jensen shares with me Userflow’s playbook to bootstrapping a successful PLG company that also happens to enable PLG for other companies (my head is exploding). As startups across the board are working to become more efficient in this new environment, I hope you find this writeup timely and instructive:
Bootstrapping to Millions of ARR with 3 People and PLG
“Userflow was started in 2019 and is a SaaS solution for building product-led onboarding without involving developers.
From day one, we decided we wanted to be bootstrapped and 100% focused on optimizing our processes with a PLG motion. Both my co-founder, Sebastian, and I (Esben) had previously built larger organizations, and this time we wanted to try something different.
Since then, it has been a fantastic journey, and we have been able to bootstrap to 550+ customers and millions in ARR with a team of just 3 people.
Even though we are an outlier, I believe many SaaS businesses can learn from some of the ways we think about things (especially in the current climate) and therefore we wanted to share 6 key things that have allowed us to do this.
1. A Product Customers Love
Having a product that customers need and love is probably the most important ingredient to building a great PLG business. Without a great product that solves a real problem, none of your PLG strategies will really work.
My co-founder Sebastian is a 10X engineer who can build anything, and with the support of our amazing designer Jonas they have been able to build a product that is:
Easy to use - Strong focus on UX
Sophisticated - Advanced triggers, version control, localization, etc.
Robust - minimal bugs and performance issues
A major benefit of having a small team is that both Sebastian and Jonas are close to our customers and understand their needs better. This is something a lot of larger organizations can learn from, as many developers tend to be too far from the customers to understand their needs truly. Another way we do this is by dogfooding, by using our product for onboarding.
2. ICP and Product-focused Marketing/Website
Our primary messaging is that Userflow is an excellent tool for building product-led onboarding for SaaS B2B businesses to convert and retain more customers without having to involve developers.The primary users are Customer Success and Product Managers.
Some of the Userflow competitors also focus on employee onboarding, Product Analytics, and other areas, whereas we stay hyperfocused on delivering the best no-code builder for in-app customer onboarding.
In reality, Userflow can do much more than that, with features like surveys, trackers, etc. But by having this focus, we can not only build a product that is fit for purpose but also do marketing and website messaging solely focused on that problem and solution. This attracts the right ICPs (Ideal customer profiles) to our free trial, so we don’t waste time vetting through customers with completely different use cases.
Another big part of the marketing and messaging strategy is showing the actual product in video demos, screenshots, and click-through demos. Again, all of this is again a way to attract the right ICPs and filter away anyone who is looking to solve a different problem.
3. Free Trial with Automated Onboarding that Drives to Aha
When our marketing and website have attracted the right ICP, we offer a free trial as our primary call-to-action (CTA). We also have a “Request a Demo” form, but it is a tertiary action on the website, where the free trial and watching a video demo are the primary and secondary CTAs, respectively.
When the user signs up for the free trial, we use Userflow on Userflow to onboard the user and drive them to the Aha moment. For us, the key Aha moment is how easy it is to build a flow (guide), so our first onboarding guide drives the user to build their first flow in five minutes. This guide is followed by a checklist with some additional action-based Aha moments. Action-based guides (jobs to be done) like this are always better than doing boring next, next, next product tours, and something we recommend to all of our customers.
We combine in-app onboarding with automated email-based onboarding, where we both send tips and tricks as well as present ourselves and make ourselves available to answer any potential questions.
4. Self-service Procurement
When the free trial ends (and before), we allow customers to buy self-service. Besides the basics of using Stripe to technically allow them to do it, we also have three main resources that make it easier for our customers to do self-service procurement:
Transparent pricing - All of our pricing is public on our website and shows which features you get in the different packages.
Online terms and conditions - based on industry standards
Online security policies - All of our security policies (not just the main security page) are available online. We are also SOC-2 Type 2 to make it even easier to assess the security of our business.
We do support contracts and security questionnaires, but we incentivize customers not to do them by only allowing them on the more expensive enterprise package. This helps remove a large amount of procurement friction.
5. Product-led Support
Great support is essential to the success of a PLG business, and even with our small team, we are able to provide this.
We can do that for the following reasons:
We solve recurring support issues in the product. Instead of hiring more people to support, we spend a significant amount of our development time on fixing recurring UX challenges.
We have an extensive knowledge base with info on features as well as troubleshooting guides.
We provide a self-help widget as well as a support chat, so documentation and support are easily accessible.
It is the three of us doing support, so you always get a qualified person to answer questions when the documentation is not enough. This also helps keep the product team close to our customers and thereby better understand their needs.
6. Wise Spending and Tracking
As a bootstrapped business we are customer funded. That means we are very careful about how we spend our money.
We continuously track our growth and as long as we are growing MRR at a good pace and our customers are happy we do not go out and hire. We furthermore (as mentioned) optimize through documentation, automation, and better UX in the product, to reduce the need for support personnel.
For marketing spending, we evaluate the ROI based on the payback period, e.g. how many customers we should get from going to a conference or doing paid ads, and we do a lot of thought leadership and content marketing which are things we can create on our own.
We do structured tracking of our customer pipeline in HubSpot and our SaaS metrics in Chartmogul. These systems are integrated with our product and Stripe to ensure the data is up to date. A key part of having good reporting is using a standardized setup, so we e.g. avoid customized deals and instead use standard product packages.
If you want to learn more about how we do product-led at Userflow, check out the Product-led at Userflow video series.”
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Love Userflow. I was one of their first customers at Integromat and it's amazing to see how far they've come without external funding or hiring crazy number of employees. Sebastian and Esben pretty much do it all themselves and this proves that most companies can do a lot more with a lot less.