Webflow was a proud sponsor of Startup Grind, a yearly conference dedicated to tech, startups, and the future of innovation. Joined by thousands of people online, this year’s event inspired energy and inspiration through knowledge-sharing and community-finding.
Startup Grind 2021 kicked off with the Startup Summit, where our CEO & Cofounder, Vlad Magdalin joined Bevy and Startup Grind’s CEO, Derek Andersen for a fireside chat: The most impactful decisions for an early-stage founder. You can find the recording here, or read the transcript below.
Later, our VP, Marketing, Ashley Brucker-Stepien joined Skillshare’s CMO, Liana Douillet-Guzmán for a fireside chat called Building a values based brand. You can find the recording here, or read the transcript below.
And if you’re a startup in the market for the best tools, consider Webflow for startups.
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The most impactful decisions for an early-stage founder
Vlad Magdalin, CEO & Co-founder, Webflow
Derek Andersen, CEO, Bevy & Startup Grind
Derek: Welcome to Startup Grind, thank you so much for being here!
Vlad: Thank you so much Derek, it's amazing to be here. Hey everyone!
Derek: So I wanted to just start - Webflow’s raised $215 million, which for most people and even maybe to some degree yourself is sort of just strange to even say...
Vlad: Actually I don't think I've ever internalized that number. I thought it was somewhere in the hundred to two hundred range but I haven't done the math yet.
Derek: So just knowing your history I feel like you more than most founders can really relate to the struggle and the difficulty of getting something going, getting this creation off the operating table and getting it a pulse. What sort of early things did you and the team relentlessly focus on just to get from zero to one state?
Vlad: That's such a broad question, since Webflow has gone through four different iterations of trying to start up with different founders. Two of those times were just myself being solo. I think the thing that has been the biggest factor that has weaved in through all of those attempts and has kept me going is just the sense that something is broken in the world and it can be better. Having gone through near-bankruptcy, working on Webflow and just not even nights and weekends — we had kids at the time, we were very young, so nights were taken up by kids — it was like what is there outside of the day job and nights and weekends? Basically sleep time that went into some early iterations of Webflow. Which I don't always recommend. These days you start talking about that kind of schedule and it just — especially if you're imposing it on your team — that's definitely not something that you want to promote from a work-life balance perspective. But for me the thing that has consistently been the biggest drive is just knowing that this needs to exist and that pushes you into trying all sorts of things to get it off the ground.
For us it was, “how do we get one customer to use us?” We wanted to be a product company from the very beginning but we didn't have a product. So you have to find one client that you freelance with and then try to solve that problem for them and slowly iterate on the product so that the next client is using more of the product and then maybe you're 95% doing custom freelance work and then 5% is solved by the product. And maybe the next client is 6% using the product and then 94% custom development. But that was all very early, so I’ll jump into the final version of Webflow that actually worked with the current co-founders, the one that we started in 2012.
I think the biggest thing that we learned there is that we have to ship often. Starting as a designer, I was in 3D animation and graphic design and you always want to get things perfect. Every icon, every screen just has to have perfect harmony and has to fit the brand. But then you spend months and months polishing this stuff and sometimes you have this vision of what the product will be but you're never quite happy with it. I'm just glad that along the way we had advisors and people who just forced us and said, ‘hey if you don't ship you're gonna die. Even if you're not proud of this thing, even if you're super embarrassed by it, even if you don't think anybody's gonna pay for it you've gotta ship it and you’ve gotta iterate.’ That was the biggest reason why I'm probably sitting here today. We were forced by other people to get something out there to show the world some idea of what you're building to build momentum for it.
Derek: I really appreciate you sharing that experience. I think lots of people here can relate. About half the companies, or maybe about 20%, are pre-customer launched but just trying to get going. 50% are early traction and then 30% are growing and scaling beyond that. In the beginning, at least this was my experience, you're juggling lots of balls and you're trying to figure out what things are going to stick. How did you know when was the right moment to stop juggling some of those balls and start focusing on the one thing? How did you finally decide that or figure out that it's time to just go all in on this one thing?
Vlad: This is a bit of survivorship bias, and what worked for me so, I don't know if it's a learnable lesson for everyone, but this is a little bit of Webflow lore. The second time we started Webflow, in 2007-ish, I started with a couple buddies from Intuit. We were all brand new grads from school starting as they had what was called a rotational development program (RDP), where you would spend six months in different business units to learn and see what you want to do. There's a bunch of us that just started into it, first job out of college and the whole startup web 2.0 movement is happening. People are getting funded so we're like, ‘yeah this is the dream, sure we'll work at Intuit on the side, but we'll start this company!’ So we create the corporation and we file for a trademark and then we find out that some company in Florida has the trademark for Webflow and it cost us thousands of dollars and at the time, lawyers were giving out $10,000-$15,000 credits, so you would start with them and then they would charge you —
Derek: at 3X their normal rate!
Vlad: Exactly! So we spent all of that money plus more trying to fight this trademark thing and then just kind of gave up. We almost called the company “Markd Up” because you had to do stuff with missing vowels because domains weren't available and it lost steam and we went back to our jobs. But there was this trademark application that was rejected and then later I kept working at Intuit. I had two kids, we moved to Sacramento, we were about to put an offer on a house, so basically settled and out of the blue — I had moved two times — a padded envelope arrives that says “don't bend” and I open it up and it says “trademark certificate for Webflow granted.” Which I had way back then as an individual proprietorship and it was like, how is this not a sign that I need to start this whole thing?
So that's when my wife and I started talking about what it would take to move back to the Bay Area and try to apply to Y Combinator to do the whole startup thing. We started planning what amount of savings we would need to do this full time for at least a few months, and that's when I knew — remember how I said ~5% was built in Webflow? I was still at the 7% range or something like that — I had no product built and I knew that if I kept at that pace of just freelancing on the side while working at Intuit, I was going to take ~20 years to get to an actual product. So that's when it was just like pulling a rip cord, it's now or never and our kids were very young at the time, one and 3, so it's a really big bet to take, but just that serendipitous moment of, how can something like this arrive six years later, out of the blue? It's gotta be a sign that this needs to go full time. It was just that small catalyst that gave me enough confidence, even though it wasn't really traction, it wasn't really anything happening in the business. I wasn't financially set. I was still going more or less paycheck to paycheck. It was just that confidence that something in the world wants me to make this and go full time. And that's how the ball started rolling.
Derek: A lot of times too, with your family and yourself you're trying to mentally figure out, how am I going to do this, and have the courage for myself? And then the other side of it is your family too, like your wife, you've got your kids — same situation for me, I quit my job at EA when my son was six weeks old and it was like, how do you manage the risk and bring those people along with you because if your startup could end, if your spouse or significant other tells you “I can't take this anymore,” it's not just about you, it's about them, and helping them get there too. How have you managed that with the people that you love and trust and helping them be able to get on board with you and stay on board with you when it didn't really make sense to you probably at times?
Vlad: The answer is threefold, because at first it was kind of easy, it was a lot of energy. My wife had known that I tried to start Webflow three different times before. I already was working on Webflow when we got married, so it was known as inevitability. But then when we had kids the risk that she was willing to take and I was willing to take went through the floor, and I think it was initially the combination of the energy that has been there around the idea of Webflow for 10+ years, one. Two, knowing that we're planning for it, we're actually saving money and we'll have three to four months of savings where I can operate with no income and basically the idea is so good that it's guaranteed to get customers — I genuinely believe that.
We saved up legitimately three or four months of personal expenses and about $10,000 to get the company off the ground to incorporate and to make a Kickstarter video. So to me it was the combination of, we have enough money to to get off the ground, we are gonna make this Kickstarter video, we're gonna make hundreds of thousands of dollars in Kickstarter funds and here's the plan. She's fully on board at that point, then that Kickstarter video turned out to be a total dud. We spent close to $10,000 doing it, made the whole recording, and found out at the last minute that we didn't read the terms of service and they don't accept SaaS applications so you can't even fund things that you can sign up for and we can't redo the video. Three months of savings very quickly turned into zero months of savings.
So this was in September, we incorporated at the end of October 2012. That video didn't really work out, then we applied to YC, got rejected in early November. Then my daughter got sick in October — she’s fine now but it was a life-threatening situation where we had essentially what was called catastrophic health insurance, so to try to save money you get health insurance that saves you from, if you get cancer and need really heavy surgery, but the trade-off is it's much cheaper per month, then we find out that my daughter has to get all these tests around Christmas time, and all those tests cost close to $10,000, which is our deductible. So we spend all this money and then it rolls over to January and our deductible starts over. So we start selling cars, converting a car to a lease because you get some cash or whatever your equity is and a cheap lease that you can pay monthly.
At that point we're doing these credit card balance transfers where you write yourself a check and they charge you 2-3% interest and then you have to pay back later. So that's how we're funding family life at that point, and my brother (who’s my co-founder) and I and my other co-founder we're spending $9 a day on dinner because you can take one fajita plate at Unomas and split it three ways because they give you multiple fajitas and we were working at this free office called the Hacker Dojo in Mountain View. So at that point we had to give ourselves a deadline, like if we don't launch something by March then we have to go get our jobs back. That's what I was telling my wife. It's just unsustainable. When you sign up for three months of “the money's coming,” and then it's 6, nine months later and there's zero funding and you're going into severe debt —that's where I really want to stress the survivorship bias part of my advice here.
Some founders might be going through this and pulling the same strategy and 95 times out of 100 it actually doesn't work out the way that it worked out for me because we were able to get traction and the product worked and we're just lucky to — when we launched the idea of the product — get enough users interested in it that showed that there could be traction. So it was really tough. That November to March time frame was really precarious. I was already talking to Intuit to get my job back. My brother Sergie was planning to move back to San Diego to get his job back. We were going to start moonlighting again on Webflow. So I don't know what advice I can give there.
Derek: That experience is incredibly helpful to hear. I think it's easy to look and see somebody read some press release or some blog post and think ‘they don't know what I'm going through’ but you've clearly been through ‘the valley of the shadow of death’ and I think every founder does this at some point — you stare death in the eyes. I did the same thing. I was looking for part-time jobs and talking to friends about what to do and then by some miracle I was able to keep getting enough money to go another six months. But to hear that experience that you and your family had, just looking at some of the comments and things it clearly is something that people are dealing with right now and can relate to, and I think this is something that's also unique to use this idea of fundraising versus being profitable. You had to make money because you didn't have any money and you hadn't raised a lot of money and so could you just talk about how you have thought about that? I think it's quite unique to most startups that you see coming out of Y Combinator or the valley. How have you looked at profitability versus fundraising for growing the business over time?
Vlad: I'll tell the abridged story. We fell into it by accident out of necessity. We were in this sort of ‘valley of death’ as you call it and then in March 2013 we launched this playground which wasn't even the final product that we could charge for, but it was an idea of a product that we launched on Hacker News and Reddit, etc. And then it took off and that got us enough traction to get into YC the second time that we applied. Then we thought, you get into YC, the idea is everything else is easy from now on. And actually going through that program was really rigorous but it was sort of on rails. You now have a little bit of funding because they give you funding upfront. It's something that can really help me assuage my wife's fears and my own fears even though we're paying ourselves minimum wage at that point, it still feels like something is coming.
We went into demo day and by the time demo day hit all these other startups in our batch (like Doordash and a bunch of others) were either already funded on that day or already were off the ground or talking to a ton of investors, and we thought the same was in the cards for us. We got some early investors where all these other companies are raising $1, 2, 3, four million sometimes. After demo day in the first couple weeks we raised something like $250 or $300k and then we had 60-70 meetings with investors and this was an even more anxiety-inducing and stressful time in my life than even the fall because it was constantly going into the expectation of, it's gonna be easy to raise once you're a YC company to get either silence or “we'll see when other people join.” And I think we went almost a month of not building anything and being in conversations with investors, freaking out about, are we gonna have money to keep going?
And then we met with Paul Graham who's one of the founders of Y Combinator and he said, ‘look, you have around $300k. There's three of you, you divide that by 3, you have a year. You can't hire but you have a year and you can just focus on the product. You can't keep doing this if it's stressing you out so much.’ So the second we went back to all the investors and said we're done raising, then a bunch of investors said, ‘wait a second... now that you say you don't need more money, here's a little more.’ So we ended up actually raising a seed round around the fall of 2013. That seed round allowed us to operate the same way that any startup operates. We have a ton of money (it was $1.4 million in the bank), let's start to hire as quickly as possible, let's start building product, etc.
And then a year goes by and that money is just — you can see the curve going aggressively towards zero. And then we start having conversations again about raising more and they sort of fizzle out because we're not growing fast enough. We're still building the product, what we're hearing from both investors and from customers is that it's not powerful enough for professionals, but it's too hard to use for individuals. For people who are building really powerful things, Webflow just wasn't there yet. And then it was like, we're gonna die. If we keep our revenue going up like this, but our expenses going up like this… So that's when we really buckle down and out of necessity, we're like, well we can't raise more, nobody's gonna give us more money for a series A so we just have to get to where we're cash flow positive. That was the best thing to be forced into to be honest because it forces discipline.
We had to pause hiring, we had to really think about revenue. We had to think about what products and what improvements are gonna lead to revenue. We started working on our CMS, and that has since been the majority of our business. And then the next six years we're just running on that revenue. Our customers were our investors. It wasn't until we had probably crossed $20 million in annual recurring revenue where we started talking to investors again and that was all about how do you accelerate the mission and vision, and that's when we started seeing venture capital as a tool, not a necessity where you need it to survive, but more how can you use it as a tool. Just like you would taking out a mortgage on a house. Sure, you could save 30 years and then buy it with cash or you can have that value sooner, and that's how we started to see bringing in our investors.
I think if we had set out to bootstrap from the very beginning we'd be in a totally different position. We wouldn't even be able to do that. We didn't have a product that actually led to revenue and it was necessary to raise that seed round, otherwise we'd be totally out of business and getting to profitability or cash flow positivity was a happy accident because we were forced into it, but once we were there we created the discipline that we try to keep to this day where we always want the company to be default alive that we never need additional investment dollars to survive. We use that capital strategically to move faster but it's not one of these make it or break it type of decisions.
Derek: I think the thing that I'm hearing from you which often gets lost with a lot of people that are raising capital or even thinking about raising capital — this idea that, I know every time that I've gotten in a tough spot, the best advice I've always gotten is like go sell, go sell, go sell. Get yourself out there. As I have sold, and it's interesting, even that thing that you said...
Vlad: Just to clarify you mean sell the product, not sell the company right?
Derek: Yeah don't sell the company, sell the product. Sell the product, get revenue in. But creating that focus and then publicly mentioning that focus, then that got the investors...the only thing that motivates investors, which is fear of missing out. And that like pushed them to think ‘something magical is going to happen over there. They're trying to make money, they're focused.’ It’s amazing to me that whenever I have stopped worrying about how I'm going to raise and I just focus on the customer, focus on getting money into the business through those customers, I don't know that there's ever been a negative impact from doing that. Revenue solves all problems. I think that's a cliche but it's actually true. It really does solve most all problems.
Vlad: And paradoxically, investors flock to businesses that don't need them because the foundations are there and that's where venture capital can be used truly as an accelerator, not as the make it or break it type of tool. And it gives just this feeling of being in control of your own destiny as a founder, or as a company. You feel that the collection of team members and employees and everybody working on the product is actually steering the ship to where we want to take the mission and vision of the company and you have so much more optionality when it's revenue and your customers are driving the strength of the business rather than just a bunch of cash that investors happen to put in that is gonna run out at some point where you're gonna need more, you're gonna have to return that capital at some point, etc. So customer revenue is like the best way of non-dilutively funding your business and I think that's an often overlooked obvious part of running a business.
Derek: Yeah, it’s the most important part of running a business that's often overlooked.
Vlad: I would actually say it's not the most important. So one thing, I have this book on my desk called The Infinite Game because I re-read it once every month or so. I love the way it paints the true responsibility of a business because it's not just about generating revenue. It's all about advancing a cause, bringing some sort of value into the world that makes the world a better place. And where that value that you bring to the world is actually much higher to the world than it is to you. For every $20 that we get for somebody using Webflow they're actually creating $1,000s worth of value. They're either reselling their work as a freelancer or they're building a startup.
The second responsibility is to protect people at your company, protect people in the community, having a responsibility for even the planet and the environment, etc. And lastly, it's generate revenue to fund the first two. It's not generate revenue to make investors richer to make founders richer, it's generate revenue to keep doing the first value as long as you can. I love that framing because it's not just about more revenue for the sake of more revenue. It's more that you feed the ability to keep creating more value in the world and keep serving customers.
Derek: That's a great insight. I want to ask you about last summer when I saw your Twitter feed it said, ‘Hey, I'm on sabbatical.’ I thought a lot about it because there are these things that we feel like we should do when we're building a company. Like I want to make that part of my company, and then there are these reasons why we say I'm not doing that, they're really positive things but I don't have the money to do that or whatever the excuses or as Clayton Christensen would say, the other good decision or the other smart decisions that led to us not doing the thing that's actually better for us. But I just wondered, in terms of building a culture and building something that's going to be around for a long time, how do you make those trade-offs? Especially early on. Like this sabbatical, there's probably a hundred reasons why you should not do a sabbatical and maybe you could explain why you did so we understand it better? Was it something that was a sacrifice that you said, I'm gonna do this because it's important to me? How do you make those trade-offs? Should you do that from the beginning? Is there a point where you say, I caught my breath, I'm not working through the night every night, trying to just survive, and now I can start doing it?
Vlad: Underneath it all is the realization that at any company, any startup, any business, the business is this abstract concept that's actually a collection of people working on solving problems together and at Webflow we ingrain that sort of feeling of the importance of people in our mission. We actually have dual missions where they're not like one and 2, they're more like 1A and 1B. Where the first one is to empower everyone to create software without writing code — that's the obvious one, that's what our product does, we empower people to capture the power of software without having to go get a four-year degree and learn computer science, and the second part of the mission is to create the kind of company where each individual person can live an impactful and fulfilling life, and that's a much harder one to meet because it recognizes that people get fulfillment in different ways. They have a sense of impact in different ways and we try to maximize that as much as we can.
And that's one of the catalysts that made us think about the sabbatical program, which is not just for me, it's for everyone in the company. Once you spend five years at the company, you get five weeks off. You get money if you want to go travel and take a vacation or take a class, and you get that every five years. I think a really important realization there, is that five years is a long time, especially to devote these days, people change companies like every one to 2 years and if you have put in five years working at a company, it should be a recognition of that. Not just a plaque that you get, but some time to reflect and do whatever is important to you and think about the next leg of the journey, maybe get re-inspired for the next five years. That's what it was for me. When I first started Webflow it was 100% of the time coding, talking to customers, building this product, designing, doing talks, etc. Now it's 90% hiring, inspiring, running, trying to create an organizational structure. The product is now the company and the set of people and that's a fundamentally different type of work that is much harder and for me the sabbatical was all about, how do I commit to the next five years and how do I take a step back and figure out what's important for me in the next leg of the journey? It was pretty, —I don't want to use the term groundbreaking — but I went and did astrophotography for a while, I spent a bunch of time with my family and a bunch of time alone just taking pictures of the stars in the Milky Way and it re-inspired me around why the work I'm doing is important.
Even though I have this tingling sometimes, like go move to a beach and just go fishing all the time and just take it easy, but it just re-inspired me around why our mission is so important and why it's important to keep scaling what we're doing and keep bringing more value into the world and I want that for everybody in the company. We've had over 20 people eligible for the sabbatical just because people have stuck around for a long time. The worst case that could happen is people spend a month and they figure out that maybe working at Webflow is not for them anymore. That's never happened so far, it's only been a good thing where people come back refreshed and the bonus point was that it's a stress test for what happens when I'm gone and what breaks. And not much happened, not much broke. I thought like a hundred things would break, maybe five did. And it just reinforces your confidence and pride in the team that you've built and gives you confidence that the next stage is gonna be hard, but that doesn't mean if I get sick or get hit by a bus or something that the company's not going to survive. So it was a good reset.
I think you definitely need to be at a stage of company where you can afford to do that. Everybody wants to take a break when you're just grinding, but it had to be at a specific maturity of the company where you're not just leaving people high and dry and you plan for it well ahead of time and for us, I think we implemented that program about six or seven years after founding when we were already profitable, when we had a strong team of redundancy set up across different parts of the org, etc. I highly recommend setting up that kind of program.
Derek: You may have inspired me to do something like this. I haven't announced anything yet but I'd like to do it.
Vlad: Start with a week if you can't do a month.
Derek: This comes from somebody in the audience: What would your advice be for somebody that's bootstrapping their startup, they're trying to penetrate a saturated and seemingly quite competitive market? Most big markets have somebody there and even in your own space — we won't name them but there are lots of tools I can remember that seemed like they were doing great and raised tons of money right when Webflow started to come on. So what is your advice to somebody that's in that kind of situation?
Vlad: My personal advice would be to make sure that you have something that strongly differentiates you. For us even though there were decades worth of startups or big companies at that point that were building websites, for us we were the first — or not the first but the best company to execute on responsive design at the time. It was starting to be new and Wix, Weebly, Squarespace, even Wordpress didn't really have great tools for that. Adobe was trying to catch up so we had that one hook that all these tools do everything that we do but what we actually do without code is the ability to do these breakpoints, or design for both a desktop and a tablet at the same time, and that's the only thing that got people to notice us because we were providing some kind of value that others weren't. I don't know how we would approach it if we felt that our product was not differentiated. As long as you feel that there's something that absolutely makes you a better alternative to those other alternatives in the crowded market, that's what you play up. You have to lead with your strength.
Derek: The last thing I want to ask you about is your community. Community is having its moment. More people talked about community last year than the previous 10 years combined. I think people like you or people like us who’ve instinctively been doing, it just seemed like the right thing to do. Community is now a strategy. You have these people that have this deep affinity to your product and what you're doing, and I wonder if I’m trying to just build that with that first person — you said this well, trying to get one customer to love what we're doing — then try to get five or 10 customers to love what you're doing. Is there something repeatable there? If you were doing it again, would you say I would keep doing this, or I would do this, to try to build that early community in something more meaningful?
Vlad: For us, it was absolutely important to set up a community forum in the very beginning that was the place where everything happened with customer support, every single person in the company was there to answer questions. I think people didn't actually develop this affinity for the product, they didn't become like customer advocates until they saw how responsive we were in that forum. We were obsessive about going to every single question, making sure that the founders were there, every single employee was there from day one. We should have kept investing into that ethos over time.
Right now we're reevaluating how to get more of that energy into our forum, which is now scaled to hundreds of thousands of people and it's much harder to answer every question, etc. But I think that's what created that early set of loyalists and advocates, because they knew that we were listening, we were quickly responding to their problems, building quick little features, solving bugs, etc. And that created other advocates that then became the people who were answering questions and started creating events and that organically started to sprout but it was really important to have all of us in there.
I think we were spending 20% of our days coding, 80% of the time and building the product and the other 20% just with the community actively, so that they knew that we were there listening to them. I think that any product, especially one where customers have a lot of input into what they want built, it's really important to create that kind of space. And it can't be a space where you're just running events. It has to be day-to-day, essentially a forum where all kinds of issues can be brought up and you have direct communication with the product in the company.
Derek: Thank you so much for being here! This was a great way to kick off this week and inspiring stories! So good luck with getting your new puppy today and thank you, hope to have you back sometime!
Vlad: Thank you!
Building a values based brand
Ashley Brucker-Stepien, VP, Marketing, Webflow
Liana Douillet-Guzmán, CMO, Skillshare
Ashley: Hi everyone, I'm Ashley Brucker-Stepien and I lead the marketing org at Webflow, and I'm super excited to have Liana Douillet-Guzman with me. We are going to talk a little bit about what it means to have a value-based brand today. Liana, super happy to be joining you here today!
Liana: Thanks for having me Ashley, I'm really looking forward to it.
Ashley: So let's jump right in — we don't have a lot of time and we have a lot to cover. First I think it's really important for the audience to understand, how do you define a value-based brand?
Liana: I think for me the word is right there — it's about value. It's ‘what are the values that you stand for?’ And then on the other side, ‘what is the value that you're bringing to your end user?’ The best way to think about that is, ‘what is your north star?’ So I think if you identify a north star it can accomplish both of those things at once. Oftentimes when people talk about values they'll use these big words or big ideas like ‘we believe in transparency’ — and that's a great value but that doesn't necessarily drive a lot of what the value is that you're bringing to the users. If you think instead about your north star, you focus on ‘what is the impact that I want to have on this world? What is the legacy that I want to leave behind as an organization?’ In identifying that north star you identify both what you stand for but also what you're bringing to the audience and so for me, that's how I define a values-based brand.
Ashley: I love that so much because I think from a business mission or a vision standpoint we're good at establishing our stars but it doesn't always translate to the brand, so I think that's really important for people to take note of — it's not just about establishing the north star for your business, it has to translate to your brand I think that's a great takeaway.
Liana: Absolutely, when people think about business and brand there is often this conversation of those two things being separate. Your business is your brand; your brand is your business. I think sometimes people have this idea that brand equals marketing and actually marketing is just how you bring that brand to life. Your brand is who you are and what you stand for and what you believe and so you can't really have a business north star if it doesn't also encompass the brand.
Ashley: You've had really great experiences with building a brand and I'd love to hear a little bit about how you think about building a brand from the ground up.
Liana: For me it's a lot about starting by looking inward. Oftentimes when people think about building a brand they go from the outside in, so they think what do people want to hear from us? How should we position to have a better place in market? And I think by doing that you end up really limiting yourself. You actually fail at doing the very thing that you were trying to do by approaching it that way. For me, the best way to build a brand is really to start by looking inward and again back to that brand foundation, so ‘who are we and what do we stand for, what value are we bringing to our users?’ When you can really gain some clarity on that the rest of it falls out much more naturally and much more authentically. And when you can be more authentic, you then build much stronger relationships with your end users.
So for me it really is all about ‘what's our core belief system? What is the framework from which we will make all decisions?’ And then secondary to that is, once we know what that is, then ‘how does that come to life? What is the visual and verbal identity that we think represents these values/these views/these beliefs that we have’ versus starting from the perspective of how do we have a pretty logo? In some ways a lot of people start there because it's easier and it's not easy. I've done both ways and coming up with a logo that you're excited about is in and of itself a really hard thing, but it is a lot easier than having some of that self-questioning of ‘who are we as an organization.’ That's a bigger lift, so if you can start there it makes the rest of it so much easier.
Ashley: I think you're so right — that part is so hard, establishing the ‘who are we, what are the values we stand for.’ I'm curious from your experience who's part of that conversation and establishing those values and and the identity?
Liana: It changes from company to company, but why don't I walk you through how we did this at Skillshare because I think it is in a lot of ways the way that I think it should be done. We started with a really big group that then contracted. We converged to then diverge, if that makes sense. We brought stakeholders across the organization together — well actually we started by partnering with a company called Concept Bureau, so I'll start there. We went into a process that was led by a number of cross-functional folks alongside Concept Bureau and we essentially said we want to come to this process with no real outcome in mind. We have been around for a decade and we want to just do a pulse check — are we still who we thought we were going to be when we started this company? Where are we having the greatest impact on our end user? Where are they driving the greatest value from our platform? So we went out into market and we did a bunch of user interviews with students and teachers on our platform. We looked at the competitive landscape. We looked at the user flow and some statistics around what classes were being watched most often, which classes were being watched most deeply, where were people submitting the most projects, so we had a lot of data which we then aggregated and what we realized was that when we were founded the idea was we wanted to be a one-stop learning platform, so you could come and take a workout class or learn how to code or learn how to be a social media marketer and what we realized in doing this big data gathering exercise was that the area where we were excelling, the classes that were driving the greatest value for our users were very much around creativity.
And we define creativity pretty broadly so for us you do not have to be an artist to be creative. In fact our perspective is that if you ever held a crayon as a child you are creative. I think about myself — I work in marketing, I'm certainly not an artist, but I love painting. I do love creative endeavors. My wife is in finance and she would describe herself as the opposite of a creative person, and yet she's incredibly creative. Her job is to think about how you structure a business so that it's differentiated in market. That requires a creative mindset. So we define creativity broadly and those were the areas where we were having the most impact and then we looked at the external feedback and we found that actually diving into that creative part of ourselves yields much more fulfillment and productivity than we give it credit for. So those two things converge and we realize that's our special sauce. That is the sandbox that we want to play in — really helping to redefine what it means to be creative globally. And then also creating the platform by which you could access that experience.
So that was the ‘who are we/what do we stand for/what is our north star?’ We want to bring people in to help them inspire discovery through creativity. From there we then went into the process of creating a visual and verbal identity that would bring that to life. So we brought in folks from across the organization. We did it in the form of a five-day sprint, which I will tell you prior to this company I would have said was a terrible idea, because I think sometimes when you have too many people in the room you end up with weaker ideas. But in this form it really worked. So we brought folks from the design team, the engineering team, the marketing team, across the organization into a room and had a really structured but free-form brainstorming session.
At the end of which we had literally thousands of ideas and then we contracted that group. We took designers, marketers, brand builders to actually then take all those ideas and and yield more targeted ideas that we could all then respond to so we came out of the process with three ideas which we then pursued. We built verbal and visual identities for each of them and then voted on which we felt was most resonant and at the end of a five-day period, had built the brand that we then introduced to the world. I think we were able to do it so quickly because we did the hard work of laying the foundation first so we weren't trying to figure out who we were via a logo; we had all of that in place and we just had to bring it to life — and that's an easier path to take.
Ashley: I think establishing that hard part, the ‘who are we’ and then going into that creative part just eliminates a lot of the anxiety people have about what a finished product looks like. One thing that caught my attention you're talking about is the different players that you've brought in to help build that brand and I think everyone in the audience would probably really benefit from hearing how you build a brand team and what it might look like depending on the stage of your company?
Liana: Absolutely— stage of company is really important for this. Broadly speaking there are 2 traditional ways that people think about building brand functions. One is the agency model where you bring in a senior marketer, maybe one or 2 junior folks on the team to support but then you rely really heavily on an agency to yield all of your creative ideas. The other model is you build a really big in-house team: lots of designers, lots of brand marketers. We have actually settled on a middle of the ground approach. I think the advantage to having in-house is that you get people who really understand your brand and are living it every day and so you're not having to go through the exercise of getting people to understand your challenges. They understand them in real time; they're living them. I think the benefit with an agency model is that you have folks who are bringing fresh thoughts. They're not living in the everyday and so you get people who are going to think outside the box and who are going to come with fresh ideas and who are frankly leveraging other experiences from their day-to-day and bringing that into whatever they bring forth. For me, creating a hybrid model allows you to leverage the best of both worlds, and so we have built a fairly small but mighty core team.
We have a VP of Brand Strategy, a creative, incredibly impressive guy who really helps to set the brand strategy and the vision for the company when it comes to how we bring our brand to life and he is supported by a couple of producers, a couple of designers, a copywriter and those are the jobs that are the always-on jobs. Those jobs span the smallest things we need to do to the biggest things we need to think about. Those are the people we're turning to when we're thinking about a really big campaign idea. Those are the people we're turning to which is why we have opted to to build a team that is full-time around those roles, and then we flex up and down throughout the year. We continue to do the sprint model twice a year. We bring a varied group of folks together from our extended network that help us think through our thematic approaches for the next 2 to three quarters, so you've got all the folks from the team in the room. They have all of the insight and the insider knowledge that can help you get to the right answer more quickly. Then you supplement that with folks who have that outsider's perspective and can bring new and fresh ideas that may not have occurred to us otherwise.
There is a difference based on your stage and based on your funding, so I have worked at companies that had very little funding and in those scenarios you have to build a really small team. You likely can't afford big agencies and so you focus on getting one really good generalist, somebody who is maybe not the world's best designer, maybe not the world's best brand marketer, maybe not the world's best social media manager, but very good at all three of those things and and can bring those things together to drive the impact that you need to drive and then you can supplement that with freelance support if you can't afford agency support. As your budget grows and as your company grows, the need for a generalist actually diminishes and you start to want real subject matter experts who are focused on very specific parts of the business so you have to be really cognizant of where you are and focus on building the team accordingly.
The other thing I will say to this because it comes up a lot when folks are thinking about ‘how do I build this from the ground up and I don't have a big budget and where do I focus?’ What I would say is a lack of budget can actually yield tremendous innovation. When I reflect on my career, a lot of the things that I am most proud of were actually things that we created when we had really shoestring budgets and it forced us as a small team to figure out — well we can't do the big super bowl ad or we can't do the big out of home experience, so what can we do that will have real impact? Early on in my career we couldn't afford big out of home spend so I built a little gorilla team of folks and we went and did flyers on people's cars and it was a very targeted audience and within that audience there was a lot of talk about it. We figured out how to stand apart from others and we did it primarily because we didn't have the budget to do the big idea. So as I have gone into companies with bigger budgets I've really held on to that idea. Even if you have massive budgets, forcing yourself to think ‘what would I do if I didn't have this massive budget?’ can really help you do things that are more interesting and stand out from the crowd.
Ashley: So many good nuggets in there and there are so many things I want to double click into. One of the first things is — I think the concept of a brand marketer is something that people start to think about probably in later stage companies. In the beginning we're looking for Swiss army knife marketers, people who can do everything and I think you've been that person — I've been that person — but a brand marketer is a different breed. I consider myself more of a revenue marketer. Brand marketing is something that has always fascinated me and I always look for a strong partner in brand marketing. What do you think makes a great brand marketer?
Liana: Such a great question! It's funny you say that, I'm actually the opposite — I consider myself more of a brand marketer. Partially because I grew up in that very traditional brand marketing role and also in the era. I started my job right as Facebook was coming to be and they had not yet figured out their advertising and I'm old enough that revenue marketing was more a sales role than it was a traditional brand role. I think one of the magical things that has happened in the marketing industry is that we have figured out how to have both of those functions within the marketing team and I often talk about the power being really in having those two things together.
I think what a lot of companies do is focus on the growth marketing or the revenue marketing first and and then the brand side of it is an afterthought and what ends up happening there is you actually make the revenue marketing folks have to climb up a steeper hill because you haven't given them the right foundations or tools from which to really succeed. When you have that growth marketing function in the context of a really strong brand vision and a really strong brand identity, that makes their job so much easier. We've seen that for us at Skillshare. We were, when I joined, primarily a performance marketing function. Immediately when we launched the brand our email and engagement increased by 50%, our CTR has doubled, we saw incredible growth metrics that made the job of the performance folks much stronger. To your initial question, which was what makes for a really good brand marketer, I think there is no singular thing that a brand marketer should possess. For me it's about somebody who can balance vision and impact so I think one of the risks with brand marketing is that you can get into the mindset of ‘we're going to do these really beautiful brand moments’ and they can be really beautiful brand moments but if they don't drive the bottom line to some degree, it's like if a tree falls in the forest and no one hears it, doesn't make a sound. I've done that as a brand marketer — one of my favorite campaigns did not drive a single new client and I still love it, it's a beautiful brand campaign but it just doesn't work if it didn't resonate for anybody else, if it didn't drive the bottom line then it didn't impact.
For me, what makes for a really good brand marketer is somebody who has that combination of art and science, who really has an appreciation for the impact of longer term plays and is able to articulate that value to folks who may not necessarily feel it innately, because a lot of good brand marketing is playing the long game. We did a brand life study at Skillshare at the beginning of last year and again this year and we doubled our unaided brand awareness which is a very hard number to move, but it took a year to do that and if we didn't have a team in place that could really convincingly share why it matters to do these things, even though we're not going to have immediate membership, we would have missed out on the opportunity to genuinely move those numbers.
So you want someone who can who can understand that bigger vision, understand more of those long-term plays, but can articulate them in ways that can convince folks who are totally focused on revenue to take that bet and then who also have enough of that science in them that they're putting the right measurement tools in place so that at the end of a year or at the end of a campaign they're not coming back and saying, ‘but it was beautiful, didn't you love it?’ They're able to say, ‘it was beautiful, didn't you love it — and also let me show you what it drove.’
Ashley: Awesome, that got me thinking about something — I suspect in our audience right now we have a pretty interesting mix of businesses represented and I think depending on your type of business and your go-to-market, brand plays a different role. So in my mind if your business is incredibly transactional or self-serve oriented, brand is mission critical. It almost does a lot of the work for you, versus a more traditional B2B sales motion where there's multiple sales touches involved, brand can sometimes take a back seat to your go-to-market plan. How do you look at those 2 things and how brand plays a role in the type of business that you're building?
Liana: A big caveat here is that I am a brand marketer and so my answer probably will not be unexpected. I think it is mission critical regardless of the kind of business that you're driving. One of my first jobs was at a company called Axiom which was very much a targeted B2B play. There was a B2C component in terms of building our platform, but we had 500 companies that we were targeting and there were probably three to four people within each company that we cared about, really targeted B2B. So that's an example of where you could argue that brand really doesn't matter, that if I know that I'm going after three people in a particular company I'm just going to get to know everything they care about and then I'm going to target them.
We didn't find that was the case. We found that when we cared about building the brand more broadly, getting in the room to have those conversations became a lot easier and then the outcome of those conversations was much more favorable. It's because ultimately people want to know that particularly where it's not transactional, where it's usually a bigger purchase price and when there is more money involved, people want to know that they're investing in a company that they can believe in, that's going to be long-term sustainable, that is aligned with their corporate values and goals. I think they are equally important but for different reasons in either one of those businesses and that's true of all businesses I think.
Ensuring that you have that strong brand foundation is tremendously important. That's where the difference between brand and marketing comes in. It may be less important to spend budget on marketing initiatives that drive the brand. You can focus on different, less expensive levers for bringing your brand to the world in a company that is much more targeted B2B versus a bigger B2C transactional company. There are certainly differences to how you bring those brands to life but I think the brand foundation is important across the board.
Ashley: Great distinction there, that brand importance is not equal to brand budget per se. I think that's a really important distinction that we need to make, which leads me to the next question: one of the pillars of a value-based brand is being able to stick to principles over profits and that can be a really hard conversation to have with stakeholders and people at the table who are looking at the bottom line, so how do you have that conversation? How do you think about principles over profits?
Liana: Two things here: I think one is if you've genuinely built a values-based brand, it will not be hard to convince folks of this because you didn't start with the bottom line. You didn't start with the service or the product. You started with ‘how are we changing the world?’ So it becomes very easy to draw a straight line back to that. I know I'm beating a dead horse here, but it comes back to why it's really important to build that values-based brand from the outset because the values-based brand is a great framework from which to operate when things are going well.
It is monumentally important when things aren't going well. It is the singular thing that will allow you to make decisions with some sense of security because you're not making things up as you go along. You have a clear framework to point back to and say, ‘wait a minute this matters to us, we said that this is why we exist, so we have to make the decision that honors who we are as an organization.’ I would start by saying that if you do that hard work at the outset, it makes those conversations frankly either non-existent because no one's asking the question because everyone understands what everyone is working towards, or when those questions come up it provides the framework from which to say, ‘wait a minute, this is what we said we cared about, you agreed with this’ is a straight line.
For the record this is true not just of stakeholders for private companies but even on the public market. I know people care about their share price but you look at a company like Amazon where there is a trust that this company will make investments that will improve shareholder value in the long term even though it may lead to some dips in the short term.
The other thing I would say is this can be a real brand differentiator and actually lead to long-term value so you look at companies like Hershey's or Ben and Jerry's where in the last year a lot of companies have stepped in to demonstrate that they care about certain social issues. You have companies like Hershey's that produce PPE. That wasn't a one-off, they've been doing that since World War II, and so and over time there's a reason that I think we know Hershey's more than other chocolate brands. It's those decisions that over a long time, when you build that pattern, build an affinity, so folks feel like ‘this is a company that cares, not just about profits, so I'm actually going to improve their profits.’ We see this over and over again.
We saw Nike — people felt like they took a big risk with the Colin Kaepernick ad and it was a risk but it was true to who they've always said they were and it ended up yielding tremendous value for them as an organization. In these moments when you have these conversations with folks who maybe don't see that vision, I think it's about being able to point to organizations that have gone before you and demonstrating that it may hurt in the short term for some but it will drive much broader impact in the long term.
The only other thing I will add to that is (and this is something I think a lot about) you're only as good as the team at your company and I think increasingly as the new generation comes up, this is a generation that cares deeply about working for places that they believe in and that are doing the right thing. I see this in my team every day. That's the other thing that sometimes won't have as direct a tie to that shareholder value, but your ability to do the right thing is going to attract better talent that is more passionate and more committed and more hardworking and that ultimately will drive more shareholder value than any other decision that you make. That's another part that folks don't often think or talk about.
Ashley: A huge takeaway there — I totally agree that the talent piece and being mission-driven and having employees that are genuinely invested in your mission makes all the difference in the workplace and your output, so thank you for that. I'm picking up on a common theme though and it's really about the long game. A book we read at Webflow is The Infinite Game and how you kind of have to take yourself out of the day-to-day and keep that long-game vision going. That's a healthy reminder because when you're in that startup world, you're living day to day a lot of times and it's hard to keep that long-term vision.
Liana: It's the classic ‘I'll do it when I have more time’ — you will never have more time! I've worked in startups; I know that you don't have any time but you don't also don't have the bureaucracy or the weight of having been around for decades, so no better time than now as a startup to really be thinking about these things and taking the time to set that foundation as I said earlier. It makes everything easier, but it becomes a lot harder to go back and do that.
Ashley: Absolutely, important takeaway there. I want to click a little bit more into how you think brand is showing up in this pandemic era. It does seem like it's more important than ever so what's your take on that?
Liana: So much of what we saw in this pandemic is that it has stripped away a lot of the noise just generally in our lives. I can't tell you how many times I talk to people who say I can't believe I was on a plane every other week — turns out I didn't need to be, turns out I am just as productive working from home. I talk to a lot of parents who say I'm working 70% of the hours that I used to because I have to in order to make my life work, and it turns out I'm actually more productive.
We're learning a lot about what we're capable of as individuals but also as a global society and we see that every day in the way that we have stepped up for each other and so I think stripping away that noise has left us with a more authentic experience across the board. Friendships have become more authentic, people are talking about more real things. I think that's true in our relationships to corporate entities and I think that is something that will remain. We've also seen — and this isn't pandemic related but — a lot of the systemic racial injustice that we've seen for hundreds of years has really come to a head across the last year. I think there's an understanding that we can't stay quiet anymore as individuals and as companies and I think our audience is going to demand that of us.
They are going to demand an understanding of who we are and what we stand for. We've seen companies put out very empty messages and get called out by their audience saying ‘I want numbers behind that’ or ‘hey, you said this six months ago and we're not seeing a lot of change’ or ‘you've made this comment but your team internally is not feeling this way.’ I don't want to shame any brands but there are certainly plenty of them that this has happened to and so as I think about the way that the pandemic and the experience of the last year shifted brands, it really is around that realization that it's 2 things: one is the need to be more authentic and the willingness to take the risks.
A lot of companies care about the right things, they were just too afraid to say it and they were forced to do it and in doing so they realized some of the benefits of doing so and it has opened a door that we are not likely to close, which is very exciting. The other thing that has happened is it has made clear what things we really need to do to drive a brand. We've realized, I used to do all of these things that it turns out I don't actually need to do, but also it lets us take new risks. People who couldn't pull the levers that they were used to pulling had to find new ways to connect with their audience. It has resulted in new and interesting ways to connect with each other and so I think those are things that we will continue to see now. As we think about what happens when most of us are vaccinated and the world returns to some semblance of normalcy, I really don't know what that looks like.
I think it could go either way. I mean, do we end up leaning into these virtual innovations? Do we find that people actually don't want to get on airplanes every week and don't find that they want to be at these big conferences and they actually would love to dial in and we're just going to keep innovating in that space so that these experiences become more personal and connected? Or are we going to go the opposite? I hear a lot of folks talking about the roaring twenties... is it going to be where everyone says, I cannot wait to get on an airplane and out of my house and to be around other people that I have not been looking at for the last 12 months? We don't know which direction it's going to head and it's our job as marketers to be prepared for either scenario.
We have the benefit right now of being able to take the time. I think once it opens it's going to be quick and those brands that are taking advantage of this opportunity now to build a number of paths that they might pursue will be better off when the time comes because they they'll be enacting ideas that they believe in versus rushing to make something happen because they feel like the opportunity is there and they don't want to lose it.
Ashley: One last question for you that came to me while you were talking, and I think that the audience would really benefit from hearing because I know there's more than a handful of people out there who have this question: where where do you start if you want to change your brand?
Liana: I think you start looking inward. You have to come at it with a real sense of curiosity. One of the things that happens in these exercises is, people walk into a meeting about confirmation bias or desirability bias — they know where they want to land and then they're going to have a bunch of meetings that will validate that's where they should be.
I've seen this over and over again where you talk to a CEO and he says ‘this is what our list of four values should be’ and then they'll go through this big exercise and you end with those four values. It's not that those were the best four values necessarily (sometimes it is) but I actually think it's more that they put people in the room and build processes to ensure that that's where they would land. And I think that's a big mistake. The way to do it is to come with a blank slate sense of curiosity, like first principles: if we were to do this all over again, where would we be, what would we stand for, and then once you reach that answer then you can build the business process around it.
The thing that I think about a lot is Amazon — and for the record, I think there's a lot about Amazon that could be better in terms of some of their practices around people, etc. but — one of the things that they have done correctly is, they were never going to be a bookseller. I think if they had started with that as their goal they would not be the behemoth they are today. They started with the idea of we want to connect people to commerce, we want to be a one-stop shop for everything that you need and that was a very big goal. There are some folks who would say that's too big of a goal but I actually would argue start there and then figure out where do you start because that's how they got to the ‘well, if we sell books we're actually tapping into the exact target audience on an item that is high intent and then we're going to learn from them and then we're going to be able to layer on and layer on and layer on.’ I think that is the right way to think about your brand.
Again, it's not marketing; it's brand. So who do we want to be not in five months, but in five years and 50 years? How do we get there? Companies like Kodak didn't focus on this. At some point somebody should have said ‘we're not actually about film, we're about capturing memories’ and that opens you up to try new products to take new risks to innovate differently versus if you're really squarely focused on ‘here's what we do versus here's what we stand for.’ You really eventually no matter how successful you are, will draw yourself into a corner.
The way to start is: who do we want to be in 50 years? Then there's the natural question of the great big picture. Let's say we've identified that, how do we bring that to life? There are so many ways to do this. One thing that others may disagree with: I think names are stupid. When you think about Facebook, it is a stupid name. But it's about the power that they have imbued into the name that is the power of the name. So now it's not a stupid name but if somebody said, ‘I want to start this thing, let's call it Facebook,’ you probably would have been like, ‘I think we can do better.’ They were so focused on the mission that they weren't focused on the name. They cared more about what they were building and I think that's the right way to think about it.
A couple things on the bringing it to life:
- Take some of the weight off of whether your name is the thing that will differentiate you from succeeding or not. A really great company with a hard name or name that isn't great will still do well. Some of the weight is taken off of your shoulders on that front.
- Just know that there is no exact way to do it and it's very budget-dependent. Skillshare grew for 10 years with a logo that our co-founder helped to put together and it was a very different process. It was much more scrappy in terms of building that brand identity, but it didn't matter, we knew what we were and what we wanted to be. The brand is just a way to build some quick association with that vision but I think how you get there, it can be a freelancer off of Fiverr or Upwork. It can be a big amazing agency and the work will vary accordingly, but your ability to build a strong business will not.
Ashley: I love that so much and it's just pointing back to the long game, The Infinite Game, the vision, the mission. And if you stay true to that and build everything around that, that's the sign of a true value-based brand and I appreciate you giving us all that reminder, so thank you so much. I have truly enjoyed chatting with you! I kind of forgot for a minute that we were at a conference and I would chat with you all day long, so thank you so much for all of your insights and I've really enjoyed it.
Liana: Thank you, me too! Ashley, I will say I don't I don't miss getting on airplanes but I do miss in these moments not being able to go grab a glass of wine afterwards, so someday when the world opens up we'll have to do it.
Ashley: Absolutely, thank you so much.