S4E3 – How Userflow grew to 4.6M ARR with a team of 3 With Esben Friis-Jensen

How Userflow grew to XM ARR with a team of 3

In this episode of the Grow Your B2B SaaS Podcast, Joran Hofman interviews Esben Friis-Jensen, the founder of Userflow. This successful B2B SaaS company grew to 4.6 million ARR with only three people and was later acquired by Beamer.

Userflow has been the second startup from Esben, where he founded Cobalt first and took his learning to Userflow. Going from a funded startup with 200+ employees, to starting a bootstrapped company with only 3 people and being acquired.

This is a value-packed episode, as he has done & seen it all.

Startup journey

Bootstrapping vs. VC Funding

Esben discusses the decision to bootstrap Userflow instead of pursuing traditional VC funding. Drawing from his experience with Cobalt, he emphasizes the benefits of bootstrapping, such as maintaining autonomy, operational efficiency, and greater flexibility in decision-making, including the option to be acquired.

Userflow was born out of a pivot from a previous project by co-founder Sebastian. The idea stemmed from the positive response to an in-app guide he had built for a different product. Recognizing the market need, Userflow was founded to provide a superior solution for in-app onboarding.

Userflow’s Growth Strategies

Userflow’s success can be attributed to its focus on building a great product, leveraging SEM for acquisition, and implementing a solid product-led growth strategy. Esben highlights the importance of automation, self-service features, and a seamless onboarding process in driving customer acquisition and revenue growth.

Lessons Learned

Esben shares vital insights from his entrepreneurial journey, emphasizing the value of thought leadership, pricing strategy, and adopting AI technologies like GPT-4 to enhance customer support. He stresses the significance of continuous learning, adaptation, and staying customer-centric in scaling a SaaS business.

Reflecting on pivotal moments in his startup journey, Esben recalls the challenges faced during Cobalt’s pivot and the decision to transition from a larger organization to founding Userflow. These experiences underscore the importance of resilience, adaptability, and aligning personal strengths with organizational goals.

Advice for other B2B SaaS Founders

For founders aiming to reach $10K MRR, Esben stresses the significance of customer acquisition, revenue generation, and feedback collection in the initial stages. He advocates for a customer-centric approach, focusing on getting paying customers and iterating based on their feedback to drive early growth

As Userflow approaches the $10 million ARR milestone, Esben advises founders to prioritize scalability, process efficiency, and product-market fit over excessive hiring. He emphasizes the need for strategic growth initiatives, product innovation, and continuous optimization of pricing and go-to-market strategies.

Future Growth Opportunities

Looking ahead, Esben sees Userflow’s potential to expand into new use cases and industries, leveraging AI, automation, and product-led growth principles to further scale the business. He encourages founders to embrace innovation, adaptability, and strategic planning in pursuit of sustained growth.

Esben’s entrepreneurial journey with Userflow exemplifies the power of a customer-focused approach, strategic decision-making, and continuous innovation in building a successful SaaS business. His insights, experiences, and growth strategies offer valuable lessons for aspiring founders and established entrepreneurs navigating the complexities of scaling a tech startup.

Key Timecodes

  • (00:39) Getting to Know Esben
  • (02:15) Esben’s Background and Motivation
  • (02:59) Starting Userflow and Idea Generation
  • (05:05) Bootstrapping vs. VC Backed
  • (06:26) Lessons from Cobalt and Userflow
  • (09:16) Scaling Userflow with a Small Team
  • (11:30) Managing Customer Requests and Enterprise Clients
  • (14:18) Leveraging SOC 2 Type 2 and Pricing Strategy
  • (26:06) Leveraging AI in Userflow

Transcription

[00:00:00.000] – Joran

In today’s episode, my guest is Esben Friis-Jensen . He’s the founder of Userflow, a three-person bootstrapped in-app onboarding product and survey tool without using any code. They grew to 4.6 million. Arr have been acquired in February 2024 by Beamer, which is creating an all-in-growth toolkit. Before Userflow, he started Cobalt, which is a VC-backed company with 37 million in funding with over 200 employees. So he basically seen all aspects growing a startup, VC-backed, bootstrapping, and Getting Acquired. In this episode, we’re going to talk about his journey as a founder, his learnings, his mistakes along the way. Welcome to the show, Esben.

[00:00:39.870] – Esben Friis

Thank you very much. It’s a pleasure to be here.

[00:00:43.300] – Joran

Cheers. I’m going to fire off a couple of questions right away, so to get to know you and the company a little bit. Who is Esben?

[00:00:51.000] – Esben Friis

I’m a Danish person. I’m from Denmark, originally. Basically, I lived in Copenhagen and also went to university there I got my first job there at a consultancy, Accenture, one of the big IT consultancy, and were there for three years and found out that corporate life was a bit boring for me, and I wanted to do startups since that. Luckily, I found a colleague in Accenture who had the same ambition, and we decided to build a cobalt, which was the first company. And then I did that for seven, eight years, left that operationally, and then co-founded UserFlow afterwards. You I’m an entrepreneur and I have done two companies. That’s really on the professional side. On the more personal side, I’m a father of a one-year-old kid and we are digital nomads. So we travel around, mostly in the US. We’re based in the US, but travel around in different states and exploring the beautiful country.

[00:01:49.530] – Joran

Nice. How old are you?

[00:01:52.330] – Esben Friis

I’m 39, getting close to the big four. You can say I got laid into the startup game when cobalt started. So cobalt is now I think 10 years. So that was done in ’20 or 11 years, 2013. I was around 28 at that time. So pretty late to the startup game compared to some of the people I, for instance, met in Silicon Valley when I got here.

[00:02:14.170] – Joran

Nice. But I think When you look at the stats, your best startup days are when you’re in the ’40s, right? So I think you have good times ahead.

[00:02:20.500] – Esben Friis

We’ll see.

[00:02:22.630] – Joran

When you started two companies, you have a little kid. What keeps you motivated to keep going and to keep growing businesses?

[00:02:29.730] – Esben Friis

So one, I love the whole technology space, right? And I love that you can build software that solves problems in an efficient and fast way. That’s really my passion is. Ever since I was a little kid, I played with computers and loved how you could do things smarter, better, faster with technology. So that’s really why I’m in it. Why I’m in technology is because of that and really about building software that customers customers get value from. That’s really what I find amazing and what drives me to continue to build companies.

[00:03:08.290] – Joran

Yeah, we’re going to dive deeper into that because I’m really intrigued by 4.6 million ARR with only three people. We’re going to get How did you get into that? First of all, how did you came up with the idea of user flow?

[00:03:20.770] – Esben Friis

It was actually my co-founder, Sebastian, who came up with the idea. He was building another company called Studio One, which was basically an early The version of the click-through demo platforms that we’ve seen become very popular the last couple of years, but he was a bit early to the market. But as part of building that tool, he had built a product tour. So inside his product, he’s built his own in-app guide. And his customers were much more interested in how he had built that guide within the product. And because he had developed it himself, he started looking at that market and said, Okay, what exists in the market today? And he went out to try a couple of tools, and he found them very intuitive. So he decided, I can do that better. And he made a pivot, and that’s where he then invited me to join him on the journey. So yeah, it was really based on customer feedback on another product.

[00:04:15.440] – Joran

Love it. So you fixed his own problem, then people loved it, and then went from there.

[00:04:21.490] – Esben Friis

Exactly.

[00:04:22.870] – Joran

Before Userflow, you did a VC back route, right? This time you went for fully bootstrapping.

[00:04:29.570] – Esben Friis

Why? I think what I learned with cobalt… With cobalt, we were four Danish guys who co-found that company, including my colleague and his brother’s friend. When we did that, we were first-time entrepreneurs. The natural journey was you go out, you build a MVP, you go to an accelerator, which is what we did as we applied for an accelerator program. Then from that point on, you raise your angel round, you raise your seed round, you raise your A round. It was just like that’s the path for a technology startup. What I learned over the years with Qobuz was that’s a very long journey. The VC back journey is basically setting yourself up for becoming a public company. It’s all about building a big organization and so forth. You don’t have a lot of optionality in that company, to be honest. When I wanted to do my second company, I wanted to, one, make it a lot smaller because I felt there was too much operational overhead when you hired a lot of people. Secondly, we wanted to be bootstrap to have more optionality over our future. For instance, being able to get acquired as we ended up being, it was one of the options we had, which would have been a lot harder with a VC-backed company.

[00:05:46.750] – Esben Friis

I think those two things really, no pressure to unnecessarily grow the organization. Two, the optionality was really the two key things that made us decide to bootstrap in instead of raise VC capital.

[00:06:02.480] – Joran

I love it. When did you actually start user flow?

[00:06:05.810] – Esben Friis

It was started in late 2019.

[00:06:08.870] – Joran

Within five years, you were able to go from launch to acquisition?

[00:06:13.920] – Esben Friis

Yeah, basically. The great thing about my co founder, Sebastian, is he built a successful accounting software as a service company before, so he knew a lot of the baseline software as a service stuff, and that really accelerated how fast we could build product, basically. That was great.

[00:06:31.430] – Joran

For you, did it help that you had a VC background before where you maybe did some learnings and now you can implement it yourself?

[00:06:38.700] – Esben Friis

Yeah, you can say I knew a lot about how you build a go-to-market function, how you can automate certain parts of your go-to-market model. I think I had also learned that what you shouldn’t do, don’t get human involvement. Don’t get too high touch because the more high touch you get, the more manual processes you have, the more work you actually need to do. Try to automate as much as possible and push the customers to do self-service. It will save you a ton of time at scale. Those learnings were something I applied to Userflow. I would also say a second learning was that We at cobalt, when we started, we were four Danish guys coming to the Silicon Valley not knowing anybody. And we were pitching our… It’s a cybersecurity platform that basically allows you to do penetration testing on demand. It was really novel and cool. We were pitching it to everyone, but people were not listening. But then we hired upcoming superstar in the security world, Caroline Wang, who became a thought leader and advocate for cobalt. That accelerated our growth tremendously combined with hiring a great VP of marketing. For me, that was a lesson learned that grind can get you far.

[00:07:54.900] – Esben Friis

You can grind your way to a lot of customers, but what can really accelerate growth is going out there being a thought leader in your space and spreading the word. Given I had the background now from cobalt, I could be that person for user flow. That’s what I did, basically. Spend a lot of time on spreading the word, what one would call thought leadership or social selling Similar now being on podcast and being-It’s all part of the game, right? I think the fantastic thing about it is you still need to be authentic. I don’t do it just to get the marketing attention. I actually love the discussing things. I love sharing the stories. I love having strong opinions about certain topics and inspiring others. It’s like a win situation that you go out and have the possibility to be authentic about the message you want to spread, really.

[00:08:46.810] – Joran

I’m going to drill down a bit because three employees, that still baffles me a little bit because you mentioned you try to automate as much as possible, which I understand. I think everybody tries to do it, but that 4.6 million ARR still with three people plus doing thought leadership, so going out, going on podcast, going on events, speaking, things like that. How?

[00:09:05.920] – Esben Friis

One word, how? Number one, it all starts with a great product. Without a great product, you can’t do this. It needs to be a product that has an easy-to-use interface, a great UX, shouldn’t have any bugs, this stuff. That’s what really slows you down if you have a buggy product with a bad UX. That’s number one, is really having a great product. And then on top of that, what we’ve done is build a lot of other things. We have a free trial, so advocating for self-service where people can sign up, try the product, they can buy self-service. So everything is pushing towards self-service. The customer should really be able to do everything themselves without having to involve a human from user flow. So that’s been a big part of it. And then building these product-led growth processes, for instance, in-app onboarding, email onboarding, automated CRM orchestration, connecting with ChatMogel to get the metrics in an automated way, using Stripe for your billing so you don’t have manual invoices floating around. It’s all part of that game, building a really strong product-led growth and self-service set up around a great product.

[00:10:22.240] – Joran

I’m going to ask more questions in card, in case. A lot of companies probably do this. We have a good product, we’re not fully self-served. With everything yet, we who work on onboarding. But still, you have companies who have certain requests. People want to jump on calls with you. Maybe when you’re going to work with enterprises, you need to fill out these vendor forms. At one point, there has to be one more employee, right? Or how do you still keep it so low?

[00:10:47.560] – Esben Friis

Yeah, so there’s a lot of things. One, if you enable the customers to do everything, then you have a really good excuse to push back on them to do it. I think what many customers end up doing is They use humans as a stop gap solution. As soon as you involve a human for a stop gap solution, then you will start getting more and more human involvement, and it will not scale eventually. Because we make everything available self-service, we can push a lot back on the customers to actually go and explore self-service. Let’s say somebody, for instance, request a demo. What we often do there is that we share a video demo, and we also have a video demo on our website. We make it very easy to see a demo without having to jump on a call. If somebody reaches out on our support and their first request is, Can we jump on a call? Because this is difficult to explain, we always push back and say, Can you try to explain it in text? And if it’s too difficult to explain, please explain it in a Loom. Or Loom video or similar, right?

[00:11:48.630] – Esben Friis

So always push back on the customer to not always take the easy way out of jumping on the call, because the more you do that, the more and more you create the anticipation with the customers that It needs to be a call every time a problem needs to be solved. So it’s really about creating that culture with your customers that this is a self-service product, and that you should expect to self-serve. And we will provide great support, but it’s going to be, to a large extent, asynchronous. And then you mentioned the enterprise customers. So what we did, and I think that’s a clever move for many businesses, want to be more self-services. We have three plans. We have startup, pro, and enterprise. And enterprise is 3X the pro-price, but it comes with all the same features. But the only difference is if you want paperwork, like a contract or security questionnaire, you need to buy enterprise. So that forces a lot of these not truly enterprises to buy the pro plan instead so they won’t come with their security questionnaires and all that stuff and act like they’re an enterprise. And what we do then is, again, make everything available.

[00:12:55.720] – Esben Friis

Because we can push back on that is because we have all Our security policies are online, so you can just go and find them, read the answers, and get the answers for your security questionnaire. We also SOC 2 type 2, so you can get that report. Again, we make everything available self-service, so there’s really no excuse to do all this manual custom stuff. But if you still want to do that, then buy our enterprise plan and pay more.

[00:13:22.020] – Joran

Love it. There’s a really good things in here. If you make everything available, then there’s no need to have that call. As you mentioned, these questionnaires are a complete hassle. We’re now going through the first ones ourselves, and they all have the same questions. A lot of them are irrelevant. If you provide the information and you put a big price on there, they can just fill it out themselves if they need to.

[00:13:43.190] – Esben Friis

Exactly. Then I highly recommend for any B2B SaaS business. I know it’s a big expenditure, but SOC 2 Type 2 will make your life so much easier. And with platforms like Vantage, Rada, Secure Frame, and so on, it’s so easy to learn.

[00:13:55.990] – Commercial Break

Are you struggling to find a cost-effective and scalable marketing channel? Check out Reditus. We help you to have other people recommend your SaaS, and you would only pay them when they deliver you paid clients, making it a very cost-effective and scalable marketing channel. Want to learn more? Go to getreditus.com.

[00:14:13.760] – Joran

To go back to the It’s a lot of hard questions because you mentioned you don’t jump on calls. I have them ask them for a Loom. In the early stage, did you do this as well? Because in the early stage, you probably want to get a lot of feedback. You want to talk to clients.

[00:14:28.680] – Esben Friis

Yeah, for sure. In the beginning, In the beginning, in the very early phases, you are much more high touch. You will jump on calls a lot more. You will do more demos. You won’t push back on doing demos. In the beginning, yes, you are more high touch, but I think you should always not make the general expectation that you’re going to be high touch. Try to make the communication flow through Intercom, so through the support channel or whatever tool you use. Don’t try to end up in a lot of manual emails, individual emails. Always try to make the single channel of communication, the support channel, really. Even though you are higher touch in the beginning, still have this already from that point on, build the natural flow that communication should really be done via the support channels.

[00:15:14.290] – Joran

Yeah, don’t open up WhatsApp, Slack, things like that.

[00:15:18.030] – Esben Friis

Yeah, I think as you bring in new people, you always have to remind them. The more you open up for answering their questions on individual emails or whatever, the more you become a bottleneck. So it’s always better be a bit tough once. Say what I do, typically, if I get a support question on my personal email is I do give them the answer, but then I also write and make it very clear, Please use support going forward for questions like this. It’s that constant pushback to the customers that you need to be a bit tough on, to be honest, to build a very efficient organization.

[00:15:55.400] – Joran

It’s interesting, though, because it’s still the same person, most likely, because there’s only three, so in the end, it’s still the same person, but at least you have everything on one channel so somebody can pick it up, whoever has this shift at that time.

[00:16:06.770] – Esben Friis

Exactly. Being three is better than being one. I think it allows you to easier scale the team in the long run because then all communication flows through that channel. Let’s say now we got acquired by Beamer, we just have to add in the support team on the support tool. Then we know all the communication is going to flow into that. We don’t need to start redirecting people who are writing me to ride the support. I think if you always think about it like that, it makes it a lot easier to one scale your team if that’s your ultimate goal.

[00:16:42.190] – Joran

Yeah, you make things less reliable on yourself, as mentioned.

[00:16:46.080] – Esben Friis

Exactly.

[00:16:46.880] – Joran

Let’s zoom out a little bit again. We talk about your founder journey. Every founder hits rock bottom one day, either financially, personally. Could you share a moment of your rock bottom moment?

[00:17:00.290] – Esben Friis

The funny thing about being an entrepreneur is it’s a long grind. As I said, I started a couple of 11 years ago. It’s been a very long journey, right? And you have your… Yes, you have ups and downs, but you’re really, as an entrepreneur, you’re just in it. So you don’t really like… It’s not everything is crap or everything is amazing. You just keep going. You actually often forget to celebrate the successes because you’re just, That was natural. Let’s move to the next step. And so it becomes the same with the failures as you just, Yeah, okay, we learned from that. Let’s move I haven’t had situations where I was deep rock bottom. But I would say two situations I can mention as Stephanie. One was with cobalt. In the early stages, we were actually doing a slightly different product called Buc Bounty programs, where you invite the entire world to test your application, and then you pay them bounties. We were not seeing a lot of product market fit with that product, and we were not growing, and we were running out of money. We were We were really close to, I think we were at that point, maybe 12 employees, including the founders.

[00:18:05.010] – Esben Friis

We were about to say, Okay, do we need to let go of the team? Then we made a really good decision to pivot and try something new and move to this more structured pen testing. That saved us in the end. We had maybe two, three months where we were like, What are we actually going to do? We’re running out of money. We’re not growing. We are not able to raise capital. So what should we do? Should we just end the journey or let go of some people? So that was, of course, not fun. But I think in hindsight, when I look back at it, I think we were way too focused on the VC game. And why were we so worried that we couldn’t raise money? We should have thought about it in a completely different way. We should have said, how do we generate more revenue? And maybe we should have let go of the team because we had too many, even though that’s a tough decision. But yeah, that was definitely not a fun moment. And then you can say, it decided Starting to leave cobalt was also partially because I was a bit tired of being in a larger organization.

[00:19:05.360] – Esben Friis

So you can say that was more me learning that I’m much better fit to be in a smaller organization where I can move fast, iterate quickly. And in a larger organization, that just becomes harder and harder. That was a key part of me deciding to move back to the startup routes and do user-friendly.

[00:19:24.370] – Joran

How did you actually leave cobalt?

[00:19:25.710] – Esben Friis

I think we had grown. We were a Series B company at that point, and The founder’s role were becoming less and less. We had a management team. When I left, we were around getting close to 200 employees. There was less of a need for us. For me, who likes to be very hands-on things and so on, it was not a world that I thrived in, I think. That’s why I decided to leave. But because we had scaled to a good situation with an independent management team and so on, it was easier for me to leave without it causing any harm or anything to the company. I could just leave operationally, and the company is still going strong, and we’ll see where they go. But I left it operation to do user flow, basically.

[00:20:13.140] – Joran

You’re still part of the company, just not on a daily basis.

[00:20:16.410] – Esben Friis

Exactly.

[00:20:18.280] – Joran

If we look at user flow, maybe, what has been the biggest company challenge you had so far during the growth journey?

[00:20:29.600] – Esben Friis

You’ve supposed to be on a really amazing journey, so I’m a bit spoiled. We’ve just been growing, and we kept growing even during the recession here, or semi-recession, whatever you want to call it, that we’ve had the last year. It’s really been a spoiled situation where we just have kept growing. For some reason, we hit the right market at the right time and with the right products and have continued to grow with minimal involvement. I wouldn’t say we’ve really hit any major challenges to to be honest. It’s a very spoiled situation.

[00:21:02.870] – Joran

Okay, let’s dive in a spoiled situation. Minimum involvement, thought leadership. What else have you been doing? Go-to-market strategy. What has been? What can we learn from you? How can we be spoiled maybe as well?

[00:21:15.220] – Esben Friis

From an acquisition standpoint, besides from thought leadership, word of mouth is, of course, big because we have a great product. But also we use search engine marketing, and some people are very much against Google Ads. You can’t get value from that. But in our space, where it’s a very competitive market. People search for the right terms. It’s been a fantastic tool from an acquisition standpoint. And the predictable tool, where forward leadership and SEO is much harder to control and predict Then SEM is really easy to control and predict. That’s been a great tool for us. Then the whole product-led growth, go-to-market approach, where everything is like product-led and self-service, free trial, in-app onboarding, email onboarding, auto renewal, online terms, in-app payment. Really building that super lean product-led model. A big part of that is the onboarding piece. Luckily, we’re a tool that does onboarding, right? So we really know how it works. And we, of course, use user flow and user flow to build our onboarding. So that’s meta. So we’re one, dogfooding our own product and learning from that, which is great. So that also is how we can maintain a great UX. But two, we also built really great product that onboarding with user flow.

[00:22:35.290] – Esben Friis

And that’s what really drives the users to the aha moments so they end up buying. Those are key things. And then I think the third thing is we’ve been really good at rising. And that is maybe also something I learned from cobalt is when we started cobalt, we sold Pentest for $1,000. But what we learned was consultancy were selling them for $20,000, the equivalent. So that was It was like a big learning for me. Okay, wow, we really sold ourselves cheap. Today, I think cobalt’s price is around the $15,000. So still not fully on the consultant level, but it’s at least closer and a lot more expensive. And I think that’s something we learned earlier on in Userflow is that if you have a valuable product, you shouldn’t be afraid to increase your pricing. And you should look at the market and see what others are charging for an equivalent product and chart something similar. If you are the cheapest product, then one, people will look at you as a budget tool, and two, you’re missing out on revenue. So every year, sometimes twice a year, we’ve been reviewing our pricing and typically increased it.

[00:23:43.960] – Esben Friis

And what we do to not piss off old customers is we always allow people to grandfather on their legacy plan, and only if they want to then get some new feature that we decide to only add in the new plans, then they need to change plans.

[00:23:57.230] – Joran

Yeah, that’s a good thing because then you can still have the option to upgrade them based on the features you add. I have to ask, but that’s probably automated as well. You probably have in-app exactly where they can just upgrade themselves to that.

[00:24:11.220] – Esben Friis

We have auto upgrades. A part of Useful as pricing model is also usage-based, which is becoming more popular in the world now. So basically, we have the base subscriptions, but then we also charge for monthly active users. So as you grow your monthly active users, which brings you more value, more people needs to get onboarded, supported, then we auto-upgrade basically when you do that. So the subscription goes with your business, you can say. And that’s not manual upgrades. It’s all done automatically. So that whole strategy around always being good at increasing pricing and also having usage-based pricing is really something that has helped user flow a lot. And I think I saw a great post actually from nick, the founder of ChetMogel the other day. And I was a bit assaulted because he wrote something like, Hiring an expensive Scandinavian design team won’t change much, but changing an integer on your pricing will. And he’s so right. Pricing is an underestimated way to change the revenue of your business. And I know you likely have a lot of European listeners here, and I think Europeans are the absolute worst at pricing. They price themselves too low.

[00:25:25.930] – Esben Friis

They seem like budget tools because they do that. And in the US, people are much better at valuing their product at the right price.

[00:25:34.470] – Joran

Yeah, it’s a really fair point. I think we even do it ourselves as well. We doubled our triple our prices a month back, but still we’re way cheaper than our competitors. For people listening, we actually had a session with Walter Reber from Unium where we dived in the pricing. He mentioned he had to have packaging, right? It’s not about pricing, but as you mentioned, enterprise has a certain package. You put certain things in there, three extra price, and that’s the perfect example of package something towards a certain ICP or a certain client type.

[00:26:06.830] – Esben Friis

Yeah, and keep it simple. I often see people making super complex pricing. Don’t do that. It needs to be easy to understand, simple It will limit how many packages you do to keep it as similar as possible.

[00:26:20.620] – Joran

I’m going to go back to the original question because I think a lot of people have issues with go-to-market or at least scaling. You mentioned paid ads. Has it been a big thing for you? If we draw it down, has that been or is that the biggest acquisition channel for you right now? Because we understand you have a good product, good onboarding.

[00:26:38.800] – Esben Friis

It’s maybe 30% is the channel we know where it’s coming from. Then the big unknown is SEO, word of mouth. That’s the rest. It’s really hard to say, Is it the biggest? Maybe it is the biggest, but it’s hard to distinguish word of mouth from SEO and thought leadership. That’s really how the US says that. But it’s definitely a part of our acquisition. Yeah.

[00:27:04.580] – Joran

Another question, I guess, you’re so processed, well, not processed, you have everything out there. People can find all the answers themselves. Would you recommend any processes, frameworks, things for people to read, check out if they want to do something similar?

[00:27:20.030] – Esben Friis

It’s about, one, make your documentation available online. That’s one. I think Base Camp, who I’m, by the way, a big admirer of 37Signals, they It’s actually where we got our policies from in the beginning because they have open source templates for terms and stuff like that. So they are a great source for finding inspiration for your policies. So it’s really about being as transparent as possible with both security terms and documentation. But we actually, at Userflow, we have a feature where you can search in knowledge base, and I’m still seeing a lot of… Even product companies hiding their knowledge base behind a lock, and it’s because they’re afraid of competitors. To be honest, competitors, they will find out anyway, right? So don’t waste too much time on that. Make it easy for your customers. Be transparent. Then you can also grow your SEO by having documentation available online. Some of our best SEO is actually our security policies. People search for that. So that’s funny. But yeah, I think it’s about being as transparent as you can, make it as easy to policies, terms, security policies, etc. Closing.

[00:28:36.120] – Joran

I will add a link to WordCamp where people can find the policies template. It sounds like everything was, I don’t want to say perfect, I don’t know if that’s the right word, but things were progressing really nice. Is there something you regret you didn’t do looking back now?

[00:28:53.040] – Esben Friis

Now that we’re bringing on additional resources on the Beamer side, I think both Sebastian and I are learning. Maybe it could have It would have actually been nice with that additional support person in the team who could have handled part of the support, so we didn’t have to do all the support. And maybe it could have been great with an additional developer to help with some of the development stuff. But I think it would also have created additional overhead for us to manage those people. And what we are forgetting is now in Beamer, we’re not the managers of those people, right? It’s somebody else managing them. So we’re maybe we’re forgetting that there There’s a management part to that that we wouldn’t have liked. But it is definitely something we afterwards said, Okay, maybe it could have actually been good to have a bit extra hands, but the potential overhead it would have added would also have maybe not been so nice. I don’t know. But other than that, I don’t really regret anything. I think the fantastic thing about Userflow is that we could have kept expanding the product use cases, and that’s what Beamer is going to do with Userflow, is that they are going to look at how can we expand to additional use cases.

[00:30:01.960] – Esben Friis

This whole product growth and onboarding space is so big, and you can do a lot more stuff than we have done so far.

[00:30:09.210] – Joran

Nice. Just a random question. How much did you guys work before getting acquired by Bwork? It still baffles me a little bit.

[00:30:18.000] – Esben Friis

It’s not like we worked more than 40 hours a week. We worked that time to really try to keep it flexible. I worked a lot more in cobalt than I did with Userflow. I think it’s because With a team of just three people, you don’t have meetings, silly meetings like recurring meetings. You do everything asynchronous. You just slack each other and you trust each other to do the right thing. And also by reducing the number of demos, I also reduced the workload I had because I didn’t have to sit on a lot of demos. So it’s really been a minimal workload because we’ve automated too much, because we forced the customers to do self-service, and because we didn’t hire people which would have added Go ahead, the need for potential meetings and so on. I think people have this theory that the more people you add, the less you will have to work. But I’ve seen the exact opposite, that the more people you hire, the more you typically have to work. It’s not like a sliding scale.

[00:31:18.050] – Joran

Exactly. Because in the end, you need to manage them. You need to make sure that they can actually know what to do, have meetings, and that it just compounds interesting.

[00:31:27.510] – Esben Friis

Yeah.

[00:31:28.710] – Joran

Maybe a bit of a hype trend question. How do you currently, for example, leverage technologies like AI, machine learning? Is that something you currently use?

[00:31:38.370] – Esben Friis

So Useful, we were really fast to adopt a GPT form. So we made a feature right after they We used GPT-4, actually, even before we had started looking at it. We launched an AI assistance. It was similar to, some people know, Intercoms fin. We were actually before they launched. We launched a user flow AI system, which is basically able to connect with your knowledge base and website and to answer support questions. That’s been amazing. We use it ourselves and we sell it as a feature to our customers, and it’s amazing. It can answer with such high quality. It took maybe six months to get the knowledge base updated in a way so it would consistently answer correctly. But now it’s perfect. It’s really about getting that feedback loop between the AI system and the knowledge base to be working well. That’s been another efficiency we’ve done with AI, and again, dogfooding our own product, but it’s great. I often see these posts online that people hate chatbots, but I think it’s because they are thinking about the old chatbots. The new GPT-4-powered stuff is out of this world if you instruct it correctly.

[00:32:44.700] – Joran

Because in the end, you feed the information from the help center, so you need to make sure the knowledge base, you need to make sure that it’s correct. There’s a lot of information in there, so we can answer the questions however you like.

[00:32:56.730] – Esben Friis

Exactly. You have limited tokens, so it’s about structuring your knowledge base in a way where it will find the right answer as fast as possible, so you don’t have to spend a lot of money to find the answer, basically. But AI has been amazing for us, both as a feature in the product, but also for ourselves in reducing our support load. That’s a place where we’ve really used AI, and I can see more use cases in the future, for sure.

[00:33:21.160] – Joran

Yeah, nice. We’re going to go to the final two questions of this podcast. I always ask this at the end, what advice would you give somebody who’s just starting out and growing to 10K monthly recurring revenue?

[00:33:35.740] – Esben Friis

I think at that stage, it’s all about finding customers, getting those initial customers on board and getting paying customers, especially now I’m speaking mostly for the B2B space, which I’m the space that I live in. But instead of chasing VC capital, chase customers, chase paying customers. That’s where you will get the real feedback. I think that’s really… I see a lot of founders go wrong in that regard that they chase VC capital, but they should really be chasing the first paying customers and get MR and feedback from those. And the way to do that is really in the beginning, it’s all about grinding, Getting connected to potential customers and getting them to try the product and so on. And then also opening up the floodgates by having something like a free trial, for instance, so people can also just find you and try it out, the people you are not able to connect with. I think a lot of people are afraid to open up and keep things behind a waitlist for too long. It’s really about opening up the floodgates, but also grinding a bit to get those early customers and get them to pay.

[00:34:41.580] – Joran

I love it. When we go beyond 10K MRR, and this is going to be a huge step, I know, but if we’re going to go towards 10 million ARR, what advice would you give SaaS founders here?

[00:34:51.560] – Esben Friis

Ten million ARR, that’s where you should start making your processes more scalable. That’s where I would advocate for building really strong self-service and product growth processes into your company. I think a common mistake when you’re growing towards 10 million ARR is you think everything is about hiring more people, which is wrong. It’s not about hiring more people. It’s about how can we How can we adjust the product? How can we adjust our marketing model? How can we adjust the pricing to grow more revenue? I think that’s the most common mistake I see when people are growing towards 10 million AR is they just hire more and more people because that’s That’s the idea. The more people you add, the more revenue you’re going to have. But I think Userflow is an example of that’s not the case. You can actually grow revenue without hiring people. In the early days, focus on getting MRR and don’t chase VC capital. And in the later days, focus on getting them up and don’t hire people just to hire people.

[00:35:51.570] – Joran

I love it. I think that’s a really good feedback. And it’s easy to say, but you actually did it. I think that’s the most important thing. So it is possible Final question. If people want to get in contact with you, what would be the best way?

[00:36:05.140] – Esben Friis

I’m pretty active on LinkedIn. That’s where you should just connect with me. I even did a LinkedIn learning course on product that growth that people can check out. So yeah, pretty active on LinkedIn. Connect with me there.

[00:36:16.070] – Joran

Cool. What we’re going to do is we’re going to link to your profile. We’re going to link to user flow to cobalt to the course. Also towards the post you said about nick and then the base camp policy so people can find all the materials discussed in the show notes. Perfect. Thanks again for coming on. I love this story and hope to see you soon live on an event.

[00:36:37.540] – Esben Friis

Yeah, great. Thanks for having me. It was a pleasure.

[00:36:41.590] – Joran

Cheers. Thanks, Aspen.

[00:36:42.970] – Esben Friis

Thank you.

[00:36:45.530] – Joran

Thank you for watching this show of the Grow Your B2B SaaS podcast. You made it till the end, so I think we can assume you like this content. If you did, give us a thumbs up, subscribe to the channel. If you like this content, feel free to reach out if you want to sponsor the show. If you have a specific guest in mind, if you have a specific topic you want us to cover, reach out to me on LinkedIn. More than happy to take a look at it. If you want to know more about Reditus, feel free to reach out as well. But for now, have a great day and good luck growing your B2B SaaS.

Joran Hofman
Meet the author
Joran Hofman
Back in 2020 I was an affiliate for 80+ SaaS tools and I was generating an average of 30k in organic visits each month with my site. Due to the issues I experienced with the current affiliate management software tools, it never resulted in the passive income I was hoping for. Many clunky affiliate management tools lost me probably more than $20,000+ in affiliate revenue. So I decided to build my own software with a high focus on the affiliates, as in the end, they generate more money for SaaS companies.
Share the article:
Scroll to Top