Going from $0 to $2 million in ARR in 7 years (the Missive story)
Hello, and welcome to build your SaaS. This is the behind the scenes story of building a web App in 2022. I'm Justin Jackson, one of the cofounders of Transistor DataFam. And this week, I'm speaking with Philippe Antoine Lehout. He's from Quebec City here in Canada, and he is the CEO of Missive, which is an inbox collaboration tool for teams.
Justin:Really interesting story on how they grew in a pretty competitive category. I really enjoyed this chat. I think you're gonna get a lot out especially if you've wanted other stories of people building indie SaaS apps. This is a team of 3 cofounders, really Small company, just a perfect example of how you can make it as an indie SaaS. Let's get into it.
Justin:How's it going?
Philippe:Fine. Thanks, Justin.
Justin:I should have tried to do a little bit more. Philippe Le Who?
Philippe:It's perfect. Felipe, Philippe. I don't really care.
Justin:And you're in you're in Montreal. Right?
Philippe:Quebec City. Yeah.
Justin:In Quebec City. Oh, great. Yep. We're actually we're planning on doing a transistor team retreat, our first one, and we're Going to go to Montreal. Is it possible to do a day trip from Montreal to Quebec City?
Philippe:It's, like, 3 hours To go and to to go back to 6 hours trip. So
Justin:It'd be a 6 hour trip.
Philippe:But it's a really nice and beautiful city. I would do my retreat in Quebec. It's it's it's better.
Justin:Yeah. Well, I'd I'd like to.
Philippe:Next month.
Justin:I'd like I'd like to go to Quebec for sure. Because I've only been to Montreal and, but I hear great things about Quebec City. And Quebec City, I've heard, has, Like, Montreal has old Montreal Mhmm. But I've heard Quebec City has way more of that.
Philippe:Yeah. Well, it's a different geography. Right? Quebec is a rock. Like, the old Quebec is at the bottom of a rock.
Philippe:Right? And then there's the Citadel, which is the English army post at the top. So With the Saint Lawrence River, so it makes for a really, nice place to visit for a few days. Usually, our our team retreats. We go in place with Beautiful landscape or, like, nice activities.
Philippe:So it's, like, it's refreshing for the team. So, usually, we we don't go to big cities because We found it's kind of hard to to get most out of it out of it. So we so I I would say Quebec has a really nice spot for.
Justin:Yeah. Yeah. No. I I if we like it, well, it it's kind of like a a midway point for all of us because I'm out here in British Columbia. Helen is in the UK.
Justin:John's in Chicago. Jason's in Ohio. And so Montreal is actually
Philippe:Yeah. Makes sense.
Justin:Enough, like a midway point. And so you've been building Missive for how long have you been building Missive for? When did you start it?
Philippe:Yeah. I think the first line of code dates to, like, 2014, but it was really just an experiment at the beginning. So I'd say really 2015 was the start of the real project.
Justin:Okay. And what was the the impetus for building it? Your your Tagline for Missive is the team inbox and chat that empowers teams to truly collaborate around email. How did you get the idea? What was kind of the motivation to experiment and build it and write that first line of code?
Philippe:Yeah. So the idea at the beginning was to actually collaborate on draft. Really, the the first park, the first experiment, and we were kind of The the 3 of us, the 3, cofounders were experimenting with different projects. And, we also at that moment created A startup called Conference Badge, which was a service to design and print name badges online. Right?
Philippe:And it it it started to get traction, and we were at the point, like, okay. Now we need a help desk or a way to do support and collaborate. It's just, like, all solution at that time was, like, woah. Like, feels, like, pretty rigid, and we just wanna do email and be able, like, to collaborate. And, I don't know if Slack was a thing at that point, but I don't think so.
Philippe:But, or yes. It just started out. And Just the idea of being, like, quickly able to chat around an email. Like, that that was just a spot. Right?
Philippe:And and then we could even, like, be, like, the Google Doc of of of email. Right? You can draft an email together as a team. And so we're 3 French Canadian and, English is our 2nd language, and I my my colleagues, my 2 cofounders are really great in English, but I make typos after Typos after typos. So in a way, all this project was about being able to quickly filter what I send to people to prevent me from doing all those stupid mistakes.
Justin:So what was it like customer support emails that were coming in, and you're and you're like, okay. Let's We we need a way of, collaborating around our replies, or was it Sales emails, was there a specific use case where you were like, man, it would be great if this email was like a Google Doc that we could all collaborate in.
Philippe:The first Really important, let's say, trend that we did in Messev that we found with, wow, it's quite powerful is that at that time, the project conference badge, like our main partner, Evan Bright. So we had a special relationship with them and a lot of email exchange, about the partnership, and that's really at that point, we said, like, at that point, we didn't have missive, so it's just like copy pasting emails. Like, wow, that'd be so damn nice if, like, that those long emails that we all need to validate as cofounders, if we could just, you know, chat around in the right context of it. Right? And even being able to draft it together.
Philippe:Alright? So so it wasn't really customer support. And that's funny because given it was not our own first use case, it's not something we push, like, until, like, a year after we launch it. And that's really where it started to work. Right?
Philippe:Where people kind of saw that there's a potential and they wanted to pay for that solution. For there was no assignment. Right? There there was no Things related to customer support. So, it was a big like, people didn't really, at first, Saw potential for the use case that we did see a potential.
Philippe:Right?
Justin:With Missive, you have this idea, and it's Just kind of a guess. Like, oh, man. It'd be great if we could collaborate on this. What was the 1st use case where you saw the market respond and say, Oh, wow. I need this.
Justin:I'm searching for something like this.
Philippe:A lot of excited user at first. A lot of early adopters Try it, missive, because the UI was nice. It was really like, we we craft a nice email client from the 1st day. Right? People, It's nice, but a lot of those early adopters are solo users or excited programmers or, you know, people that we knew about what they knew about us and they were following what we did.
Philippe:And they're not really in the crowd of looking for a solution to collaborate on, like, as this support email. So at first, those 1st user weren't really willing to pay. Okay? And then slowly through I don't know how. We're slowly trying to reach out to people on Twitter.
Philippe:We did find our, first paid customers, Which were people really interested in just being able to collaborate around email for the purpose of customer support.
Justin:Okay.
Philippe:Yeah. Yeah. Yeah.
Justin:And so you you were just, like, like, replying to people on Twitter? Like, someone would be saying, hey. I I'm looking for a way to do customer support. Or Where did those inter how did those interactions happen? Like, what were the signals you were getting on Twitter?
Justin:Yes.
Philippe:So Twitter, Product Hunt, was the kind of first obvious channel at that time. We're, and still to this day, we're we're, I would say, quite bad marketers. Most of our customer right now is or just referrals from existing customers. It's just voice. You know, it's just recommendation.
Philippe:And and, so we we ship the referral program, and it's working really well because a lot of the users were just, you know, naturally sharing the solution. Right? So Yeah. But if you look like our our SEO SEO or organic reach or whatnot, it's not really good. We're really starting to focus on that because it's just, like, wasted money that is sleeping if we if we don't.
Philippe:But, yeah. The channels the first channels were Directly pinging people on Twitter, and then reach out to people that was unsatisfied with Existing solution, that was really a good one. Right? So people complaining about their help desk. Oh, so you you enter the conversations.
Philippe:Oh, have you looked at my product? Right? I'm the cofounder. And when you say people think, like, if you reply to people on on Twitter, it feels like spam. But when it's in the right context and you say you're a cofounder, Like, usually, they are quite happy.
Philippe:I was like, oh, nice. Thanks. Right? It looks like a nice solution, and I can even ask you questions. Right?
Philippe:So At first, we were kinda shy of doing this. Right? But now it's like, at some points, like, we we saw, like, the response was really good. So Yeah. For us, it's also hard to, at first, have the confidence that our product was good enough.
Philippe:It's very good that this is based on our personality, but, you know, you have founders that's like from day 1, even if the product's not really good, it's it's it's the best one. Right? For us, like, as early adopter ourselves and has a really high standard, it was really hard for us not to see all the problems you knew the product had. Right? So for us to be able to be convinced it was a really good one, took really a long time, And we were actually convinced by our own users.
Philippe:Like, we started having more and more conversation with them. It was like, no. You're like, really? It's changing our life. Our business is completely revolutionized by the product.
Philippe:It's like, it's just not for support. It's for everything. Now all our users. Like, we did Slack, and we we just chatted missive. It's our business Dashboard.
Philippe:And at that point, that's where the confidence grew to just being more active at being, reaching potential customers.
Justin:Yeah. Yeah. Yeah. And at the time, I'm I'm just looking at your product hunt launch, And it says, we're from Quebec City and previously launched conference badge, which now generates $50,000 a month in revenue And funds are development on Missive. So you had this other product that you built that was helping to fund This product here.
Philippe:Yeah. Fund Missive for, let's say, beginning of the pandemic. So 2 years ago.
Justin:Oh, wow.
Philippe:Not not not that Missive wasn't making money. It's just we back the money in Missive. So we didn't have to pair ourself with the revenue from Missive. We would just reinvest. Right?
Philippe:But for like, the pandemic, obviously, If you if you look at the name of the other business, conference badge, like, the pandemic could be anneal that that business. And luckily for us, MISIV was already profitable. Right? So we could just switch salary to the to the other corporation. But, yeah, conference batch, fund missives.
Philippe:And it's funny because, every time we're kind of post on the acronym or something that there's a debate in the comments, like, they're not really bootstrap because they fund
Justin:it with
Philippe:a previous like, that's irrelevant. But, yes, we we were actually fun by Our previous, project, which is still running and slowly get getting back into track, but we're not actively running it anymore. So it's It's a a new partner.
Justin:That one's I I love the idea of that conference badge business because it's just so simple, and you could tell With that, like, you must get a lot of search traffic. Like, most of your traffic must come from search traffic, I'm assuming.
Philippe:Yes. Still, most, customer comes from, event platforms, like Eventbrite or a universal like the platform we integrated it. So so people, like, use those platform to get, people to pay to attend the conference, and then on those platform, there's plugins. Right? And Got it.
Philippe:Is usually the best one.
Justin:So So they have their own, like, like, Shop. They have their own app store and conference badges on that. Yeah. Interesting.
Philippe:Yeah. That that's that that was the perfect business model to bootstrap. Took Conference batch took 5 months and to get profitable.
Justin:Yeah. Yeah. And you're right now, if you search for conference badges, At least when I look you up in aTraps, conference badges, it says you're number 1.
Philippe:Yeah.
Justin:So that's that's I mean, that's pretty good. If anybody is searching for, You know, conference badges. How do I print conference badges?
Philippe:And and the the funny thing is not that we even tried. Right? It's like, this is sheer, Let's say not luck, but the quality of the Google algorithm because we never really invest much in SEO. Yeah. Like, that's the story of our 2 businesses.
Philippe:It's just, like we really actively just worked on the product, and people sometimes are pissed that we say that because it Never is like that. You you can never just build a product and it works. Maybe it's just luck. But in our case, that's exactly what we did. And we did it with a simple product, conference badge, but now we also did it with a complex really complex product in a really crowded, place with missive.
Philippe:Right? So, I would say it's possible. But
Justin:Yeah. I mean, The from from my, ideological standpoint, the that the it really shows that the market dictates a lot of your success. You have people in motion. You have people searching for a solution. You have people they they're, it's even almost better because you're, like, the next step in a path where they're already in motion.
Justin:I've already created an Eventbrite account. I've already created an event. People have already registered. How do I print conference badges?
Philippe:People like, yep. Yep. They have no clue. Right? And it's a pain.
Philippe:The process are a pain, and the other Product on the market are from, like, old school print shop or really old school, like, Evan Furniture website. It's like you need to Call, get a quote, proof. Yeah. Like, how are it's just like what developers want or, like, millennials want. It's like, I drag and merge.
Philippe:I do my things. It's kind of a mail merge. And, and and I get my badge, and then you can have badge like the design for VIPs, journalists, and whatnot, and then manage, like, All this in a nice UI. Right? Yeah.
Philippe:So it's really easy to sell. Right? It's like the market is there. The people are easily identifiable. As with missives, like, it's so general.
Philippe:It's so general that it's hard to pinpoint.
Justin:Yeah. I think I think your story is actually an interesting case study because with conference badge, you have this really simple to define product. This prints conference badges from your Eventbrite registrations or whatever, and you have people in motion, And you also have a very short funnel. Like, there's no, like, work you have to do in terms of, like, let's really show people why they need this product. Let's let's, do some education and and show them how they can use this in their life.
Justin:It's The the funnel's short. It's like, I have an event. I have an Eventbrite account. I have registrants. Shit.
Justin:It's the night it's the night before the conference. I gotta print these badges. How the fuck am I gonna do that? And then it's like, oh, here's the solution. Whatever it costs, I'll pay for it.
Justin:I gotta get this. You know? It's like the just in time solution. Mhmm. So contrast that now with Missive, what as you were exploring all that I mean, you are still in a space.
Justin:Like Like you said, there was existing categories that you latched on to. It sounds like customer support was the initial one. Was that kind of the Was that the trick? Was, like, you had to at first attach yourself to an existing category to kinda get your foot in the door people would start using it?
Philippe:The honest answer is is we attach our our foot to a competitor's, not really space. Right? Yeah. So in our case, like, front half, which right now, today, if you look at both product are quite similar. At the early days, they were quite different.
Philippe:Right? So theirs was mostly, like, essential place for social media. Right? Got it. In our case, it was really about emails.
Philippe:It was a client. The ad didn't really change much, but the marketing of both product kind of converge, Right. In the sense that both are unified inbox. It's it's both are about email. Both are about not being like your old lDesk that Mhmm.
Philippe:The rigid reply using, like, HTML that people don't wanna see. Right? Yeah. And as a small player that didn't raise money, 3 cofounders, not good at marketing, the things we find is, like, if we look for those unsatisfied user, That's a really easy way for us. So none of or now it's different.
Philippe:But, like, 2 years ago, none of the people paying for missive Had not at least tried front. Right? Yeah. Most of them already knew all the product. And a lot of thing we hear We heard, sorry, is I'm so angry.
Philippe:It's like, why didn't I find you guys before? I lost my time. Like, for many reason, they were unsatisfied. Of course, they have a lot of satisfied users, but Yeah. A lot were unsatisfied.
Philippe:And there was, like, Why didn't I find you? But, like, I'm sorry. I'm trying. Lex, we we do the most so we like, people can find us, but it's just we haven't find the The the right way. And for front, it's easy.
Philippe:They have 100 I don't I I think they raised, like, more than 150,000,000. So it's just like they spend ad that Google asked. Like it's
Justin:Mhmm.
Philippe:We try. It's like $50 a click. Like, if you've done 50 buttons of click ads, it's it's it's It's quite expensive, so it's not something we do. Right? So but and and now there's more competitors.
Philippe:Now we're going with also Zendesk that is trying to evolve. Right? So we apply that same models, and so that makes it hard for us Because we never go after the, the words used, but, the people that have no experience. Right? They all know the product.
Philippe:They all know the features. They they they have, like, a hard, rigid set of things they want. So there's no bullshit. Right? They know what they want.
Philippe:It's like we don't have but we don't have to educate educate them on what's a shared inbox or commenting in under emails. So they already know those things. Oh, yeah. I I go to a freight business and, like, you're using Outlook. It's so bad.
Philippe:Now I'll show you a new way of doing things. Like, the freight business on Missive, they already did it on a a competitor's product. Right? Yeah. So that's how we we did it as a small team.
Justin:Yeah. And I think that's a great strategy, honestly, as especially when there's, an incumbent who has raised a bunch of money. A good example of this is Calendly. So Calendly kind of there's a few scheduling tools before them, but they come in and kind of with a bunch of funding, Carve out this entire space for, calendar scheduling calendar scheduling links. And if you look up calendar scheduling link on Google, Calendly is probably the first, result.
Justin:Derek Rymer comes along and says, well, look. This category category already exists. Calendly has done all of the work to define this category. There are people now who want a Calendly alternative and are actively searching for Calendly alternative. The market is massive now.
Justin:And if I can take a Small percentage of that market, that's still a great business for an independent team. And it sounds like the same has happened with you as well. There's Yeah. These larger competitors. When did you figure that out?
Justin:Like, when did you start I noticed, like, you rank for front app alternative. When did you get that intuition that you should start, looking for people like that that?
Philippe:What's funny is that we both applied to voice at the same time. Right?
Justin:Oh, okay.
Philippe:And, and we applied the year before with conference badge, and PG replied to me personally. He was amazed at our graph of revenue with conference badge. And we did the interview in SF. And at that point, it wasn't PG. It was the guy from Gmail.
Philippe:I don't remember his name. Okay. Like, a few people I don't know, and it was like they talked about mail merge at that point, and we had no clue what it is, mail merge. We had no clue at Excel or Mail Merge. It was like, well, sorry.
Philippe:Mail Merge. Yeah. And instead of saying I have no clue and you're just old. Like, nobody or customer don't know about mail merge. Right?
Philippe:They wanna use conference. We were like, oh, mail merge. I don't we you know? So we failed. We did we weren't a $1,000,000,000 company, obviously.
Philippe:So it's like the Yeah. We're they're just green patch. Right? So so we failed at that point. But with conference, with Missive, We were invited back, but not the 1st time.
Philippe:At that point, we were refused with missive. And then we saw the batch front. I was like, oh, well, that's quite similar, actually. And when we saw they were raising money and there was no competitors. So they're the first one.
Philippe:And we were kinda shocked. Right? Because we had been working for a year on that thing. It's like, oh, it's quite similar. We were shocked.
Philippe:And, at that point is when okay. Let's Let's do a they're gonna grow. They're in YC. Right? In our mind, YC was like, at that point in 2013, it's like every single big new business was coming out of voice.
Philippe:It's like, they're gonna be big. Are we gonna create a small page? You know, we have basic knowledge of SEO, obviously. Been, on the web for a long time. So it's just like with if we're the first, we're gonna have some points.
Philippe:Right? Even if we're a small web page. And being at first for a few years, took time also to grow. Right? No one did page comparing to front for a long time.
Philippe:So For that reason, even if you I think you search from pricing, from emails, like, missive. It's like it's it's it's so that's quite good. And Yeah. It's funny because
Justin:You're right there.
Philippe:I had calls with people. I'm I'm I'm slowly moving from coding to marketing and had calls with a lot of people doing SEO, and it's there was like, oh my god. Like, people at front must be pissed. They spend 1,000,000,000 of dollars, and You rank on their front pricing.
Justin:I mean, when you're an indie, when you're a smaller company, You have to do arbitrage. Like, that's that's the way it works. And it's it's really a great opportunity. When when a company like Front is getting I think they've got a 135,000,000 in funding.
Philippe:Or even more, I think.
Justin:140 almost. Yep. When you get that kind of money, The idea is you need to spend it to grow the market, to, create the market, to build, build, build, see what works, throw some stuff up against the wall, see what acquisition models work. They can do all that money. That money is now the category's money because they're spending it, figuring out, you know, what works, educating the customers, Getting into organizations, spending their energy doing it, and it does help to create a wave of momentum.
Justin:Because if they're successful and all of a sudden the market starts waking up and the category starts forming, Then an indie can go right alongside and just kinda ride that wave with them, and it sounds like that's what happened.
Philippe:Yes. And Our biggest fear when they raise that massive 1st round was, like, oh, they're gonna lower the price. I mean, in our mind, missive or front at that point. It's like, it's not a help desk. It's a communication of for SMB.
Philippe:Right? You want everyone in the business in it. Like in Slack, everyone is in Slack. Right? In our mind Yeah.
Philippe:Mischief is just not for support. It's for more than that. Right? So we always priced it so everyone can join. It's It's not like only the people that get the most value that you pay for.
Philippe:Mhmm. So it was our biggest fear. Oh, they're raised. They're gonna go for That vision, they never and we I actually talked with Matt Hilda a few times. A lot of time actually, and, it's probably something I could say, but they're going after bigger customers now.
Philippe:Right? Yeah. The money when you raise 150,000,000, Your investors want massive accounts. Right? Yes.
Philippe:They want 1,000 support teams, call center, and then you move to the enterprise side of things. And if you look at their pricing at the moment, To me, it's outrageous. Right? There's not Mhmm. It it's like, they have a plan at $19, but it includes nothing.
Philippe:Right? It's like it's not even a trial. Right? Yeah. And so in our mind, we still yes.
Philippe:They did the you know, they did I don't know what the word you used, but, you know, they educated people about
Justin:About the category.
Philippe:Yeah. In my mind, we still have a lot of potential growth because our Product is about SMB. That's a massive and huge market. And now I know. And after 5 years, they're not going after that market.
Philippe:They're not interested. And they're not even I would say a lot of their customer that are smart are kinda sometimes offended because, like, the their their price get jacked, and they don't even have, like, a reason. And they, Like, there's oh, your your contract is up now. It's 4 times the price you paid last year. It's like, what?
Philippe:Yeah. And now they're looking for an alternative. They find us. And I was like, oh my god. This is the perfect product for us, and it's more for a a small and medium business like like like
Justin:Totally. This is so key. Like, people sometimes get confused about especially in our space, the SMB space, the indie business space, the bootstrapping space. They'll look at Intercom's pricing moves, and they'll go, what are those guys doing? Like, are they idiots?
Justin:Like, can't they see that people are complaining? Like, our people, like, people like us are complaining about the price increases. Like, this is ridiculous. I hate these guys. Who's an alternative?
Justin:And when I talked to Des about it, the he's one of the cofounders. He just says he's like, Justin, so much of our business is big companies. Yeah. And we're just not as much for people like you. We're not for Those people.
Philippe:There's nothing wrong about that. Right?
Justin:There's nothing wrong about it. And what I but what a lot of people fail to see is, like, well, Intercom already exists. Why would I go into that market? They're big. Everybody knows who they are.
Justin:I'm like, what you don't see is there's a whole market of people that are looking for an Intercom alternative. And this is the other challenge in our in our space is we've gotten addicted to this mantra of charge more. People look at Intercom's pricing. They go, well, if I went into that market, I would have to charge more than Intercom, and it's completely wrong. Yeah.
Justin:And that was your said. It's like you've gotta charge less to make yourself appeal to SMBs, to smaller companies.
Philippe:Of course. And in your case, it's not just just for the appeal. It's also for the number of people that will join join them in missive. So if all the business is admissive, the value is optimized, and they're really satisfied. If it's just a team because it's too expensive, Then it's, they get less return on their investment, and it's more, you know, it's more expensive.
Justin:There's another great Another great business started by, some folks in France, Krisp, and their whole thing is and, I mean, I love this product. They're they're not like they're not super famous on Twitter. You know, the it's not like the everybody knows the founder, but they are recommended so much by people in the indie space Because the product is affordable, way less expensive. It's like for $99 a month, you get everything that Intercom is offering for 1,000 of dollars a month. And they've just said, you know what?
Justin:We're just gonna serve companies like Transistor, and we recommend them all the time. It's a lower priced product with tons of value for SMBs, And, they're just doing a great job. They've they've built a really great product at an accessible price for SMBs. And so it sounds like this is part of your strategy as well. You're not going after the big enterprise customers as much.
Philippe:We're not going after the obvious we have demand. Right? We have bigger teams now. So, like, we're not against, you know, obviously serving, but we have limits.
Justin:You're not opposed to getting bigger customers. But We
Philippe:have a product road map and those customers usually require a lot of fine grain settings and, certifications occasions and things that are really expensive, and that needs a lot of fun to do. So those are up. If you're big and you wanna use Missive, you use it like it is. Right? We did things like single sign on, with.
Philippe:So as with SAML, so people can kind of use Okta and whatnot. But that's gonna be, you know, most of it. It's not gonna be like crazy fine grain settings. Like, I want this not be able to do that. I wanna logs every single action because my my employees, I don't trust them and whatnot.
Philippe:Right? It's not about that. Mistiff is not about that.
Justin:Yeah. And and your enterprise pricing is $26 per user, which is pretty affordable for enterprise. It looks like on your pricing page yeah. That's how you get single sign on. Yep.
Justin:Single sign on and IP restriction are the 2 main features. Yeah. I think Sometimes, people forget how people buy products. Now enterprises is one thing. Like, the the way the enterprise, Like, seek out products and hear about products and evaluate products is very different than SMB.
Justin:And, but most SMBs, you know, let's say you're 10 people or 50 people or a 100 people, They find out they they realize they have a problem or they have a need, and they go, okay. Well, Janet, why don't you go out and see what's available and what the pricing is and what the features are and try a few out and then make a decision. And so Janet goes out. She Googles, okay, You know, what unified inbox, if she knows what that is, or she googles, front alternative, or maybe they're really upset about their Zendesk. That's what's that's what's causing everything.
Justin:It's like Zendesk is driving us crazy. So Zendesk alternative. And then One of the things people look at is price. Like, for an indie, pricing is such a great lever, and Having a lower price, not way lower, but just being a little bit more affordable than the competition For an independent who might not have the same brand as an intercom or whatever, pricing is such a great lever. And if you're just a little bit cheaper, you can get a lot of customers because even a company of a 100 people, bosses like saving money, and it it becomes an easy sell.
Justin:Hey. We could switch off Zendesk. Zendesk is, like, probably $49 per user or something. And so, hey, we could switch off Zendesk for customer support. Here's this alternative we found in Quebec, Canada that starts at $19 a month.
Justin:Is that what right? $14 a month. Or we could get the mid range plan for $18 a month. So We'd save, you know, whatever. We'd save $500 a month if we switch to missive.
Justin:It's just An easy sell at that point. It's like, okay. Well, we get a better product, and we get and we save money. Perfect. Like, that's that's what we want.
Justin:And, it's funny. Even no matter how, like, how big the company is, like, Basecamp switched to us. And they one of the things they they said is they're like, oh, wow. We're getting, in their case, they wanted more privacy, Like, no tracking on their podcast episodes. They got better software because, surprisingly, indie teams like you said, You guys care about quality, so you get better quality software.
Justin:And then they're like, oh, and it's more affordable. Even even at base camps level, they're like, well, this is more affordable. You know, bonus. Right? So I I think it's super underrated as a strategy, especially when you're trying to acquire more customers to have, you know, a reasonably priced product.
Justin:There's there's nothing wrong
Philippe:with that. And I believe that, like, course, the last 10 years has just been growth for everyone. But looking at the economy, landscape at the moment, like, with the inflation and less venture capital, less money in startups. I mean, I think people will become more price sensitive. And in that case, those startup charging, like, Already $99, 50, $60 a users.
Philippe:Now people will be more price sensitive. They won't be able to lower the price. Their cost also gonna go up. And in that point, I always felt like we built for the next dumb dumb run. Right?
Philippe:We're just Yeah. Our customers are so low. We charge far less. We're established now. You know, we Yeah.
Philippe:We thought the down run would be, like, 3 years ago. Now what you know? Yeah. Not that I wish for it, obviously, but, I feel we're built for a moment like this one because, like, our costs are Pretty much. Just 3 of us are servers.
Philippe:That's it. Right? Some some other thing, and that's it. Right? Our our our price is low.
Philippe:So if people get more price sensitive, it's like we're gonna, we're gonna find more business because of those reasons.
Justin:Yeah. I mean, that's an interesting point because part of the conversation right now has been, there's inflation. Therefore, this is a good time to raise our prices. Right? Like, people are expecting that prices will go up.
Justin:But the other the this is this is the problem with, like, prognosticating and and, guessing what you think is happening in boardrooms and in Slack chats of other companies. It's just as likely that companies are going, shit. Prices are going up. Our margins are going down. It's more costly for us to hire engineers.
Justin:It's more costly for us. Slack just raised their prices. We can't give that up. Where are we gonna cut? And they're gonna look at some products and go, How come we're paying $99 per user for Zendesk?
Justin:Like, what is there a cheaper solution? Hey, Janet. Could you see if there's a cheaper solution to Zendesk? And then Janet goes on Google and types in Zendesk alternative. And if she finds something like Missive that is more affordable and looks like better software, and then she does a trial and she's like, this seems great and it's way cheaper, that's they're gonna go with missing.
Philippe:But but but and you use the word cheaper. Right? You use the word cheaper, and, Actually, adding a lower price does come with some stigma. Right? When I have calls with potential customers, Sykes, a lot of time, they think, like, front is the better solution.
Philippe:I was like, stop. Like, everyone that switch is really damn happy with Missive. It's a really great product. The mobile app does every single thing. If you go use a mobile app on front, it's like, it's half baked.
Philippe:It's like just, I don't know, 30% of their their features. It's never released at the same time. Mis if it's always, you know? And so it comes with a stigma. It's like, oh, you're the cheaper solution.
Philippe:The product must be Cheaper. Right? It's not the case. This is software. Right?
Philippe:In their case, most of the the money is to acquire new users, to sell, is to get Use for ads. It's not for the product. Right? I'm I'm I'm pretty sure most of their money is spent on ads or marketing, not on the product. Yeah.
Philippe:So this is the downside. Right?
Justin:There's a flip side to everything. And which is why I think being I think Nathan Barry said He tries to be within 10% of Mailchimp's pricing. At least that was his initial strategy. So maybe 10% cheaper or maybe 10% more expensive, but within that range. In his category.
Justin:Mailchimp is really going to anchor the pricing. And, again, you're still in the same Universe as front, like, front is 1949 and 99. You're 14, 18, and 26.
Philippe:Those are yearly, counter. I hate that. I never I don't know. I'll never do that. We hate it too.
Justin:But on the other hand, just so people are clear, I'm saying, a lower price can be an acquisition strategy in the beginning, but that's not to say that you shouldn't be raising your prices. Like, you could maybe raise your prices at this point. Krisp, don't tell them, but Krisp could certainly raise their prices. Every day in in our Slack, we're saying, I can't believe we're getting this much value for this price. If they send us an email and said, hey.
Justin:You know what? We've added all this new functionality. We really feel like compared to the our competitor, we would be happy to pay more for Krisp. You know? So I think there is that point that once you've established yourself and once you have word-of-mouth And once you have customers and once you've established your brand, then you can charge more.
Justin:The the thing I think folks wanna be careful about is you You've got a brand new brand that nobody has heard of, and people are going in and saying, well, I'm gonna be the same price as Intercom or higher. And it's like, well, Why wouldn't I just choose the brand that I know? Yeah. If you're the same price, why not just go with the more well known brand? At the beginning, One of the levers you can pull is to be a little bit more affordable.
Justin:And, and, honestly, it can be a lever you pull forever, like, Card, by AJ, carrd.co. I think it's $19 a year or something like that, and the advantage is volume. It's just like you keep it at that price. If people keep signing up at that price and you're doing enough volume, That's fine. And, Adam Wavin told me a funny story about him.
Justin:He had an introductory price on his course, And he was just selling tons and tons of copies, and it said early bird pricing. And finally, he's like, I gotta take this early bird pricing off. And so he's like, okay. I'm raising the price. And he raised the price, which he had told people it was gonna go up to, and sales just stopped.
Justin:I mean, not stopped, but he was making way less money. And he was thinking, I had this money machine that was just slowing, And then I raised the price, and it slowed down considerably. It would have been better to keep the price low and to continue to have that volume. So there's a trade off there.
Philippe:Everything you say you're in and every other, like, markets is normal. Like, it's classic. Like, if you wanna sell your product, the lower it is, the bet not necessarily better. But in technology for the last few years was always like Raise your price. It's about stages.
Philippe:Yeah. You know, the for example, to us is superhuman, the email client. It's like, They always said we charge a lot for users. You can't use the product until you do onboarding with us. We want to train you to be the best.
Philippe:It's like the Tesla's of female client. Right? And and in a way, it's good because people accept the product to be really, really high quality, which is not, you know, They have but but they also come it comes with all eye expectation. Right? But in our case, like you said, as being India, as being small, as being bootstrap, As not being so much great marketer or a storyteller that could attract a big following, pricing was always one of, the tool we use to to get Eyeballs on the product.
Justin:Yeah. And and are you doing you say you have a referral program now. So and that's not like an affiliate program. That's a referral program. How did you implement that?
Justin:Like, how does it work? What are the mechanics behind it?
Philippe:So we did look at other solutions, but for privacy issues, we decide to implement like just a simple cookie out of self. So it's all built, by yourself. And it's actually both. It's a referral, but when you, get a at first, it's just get discount of on your existing missive invoice. But if you go over that, so let's say, You refer for $5,000, and then you only pay $50 a month for missive.
Philippe:At one point, when you reach $500 in in banked money, We can just pay you the remaining, account. So so we got people doing ads now. Doing ads on Google. Oh, wow. Yeah.
Philippe:That's so, so that that's kind of cool. And they're they say it's breaking even. So, you know, they're better than me with Google AdWords because I'm I never could break even. I don't know the shenanigans they're doing, but it it seems to be working. And, yeah, we just launched that before before Christmas.
Philippe:And now we're adding, like, people doing, you know, training videos with that before they were not. You know, there's a big market of people doing training videos for click ups or Asana whatnot. And usually those people get money with, referrals. Right? And that's Now channels were, getting traction because people now can make money by kind of training or promoting people.
Philippe:Admissions. Sorry.
Justin:Yeah. I think I think some affiliates I mean, affiliates have done really well for transistor, And, not every market is like this. Like, there are some categories that lend themselves, better to these types of things. And largely, it is those people that are like they're they're good at SEO. They're good at YouTube, and they're able to, You know, have a site that all it does is review tools.
Justin:And if you're in one of those tools, they'll recommend you, and then they get a little cut. And, I think especially for independents that are in a category like that, like it's a kind of tool that people would review, It makes sense to incentivize those folks somehow. Are you noticing, like, are most is it Do most referrals come from existing customers, or is is it now going the other way where, you know, people who are just like Tool reviewers
Philippe:That's mostly customers. Those folks. Yeah. Mostly customers. Yeah.
Philippe:So people getting discount on their own invoice. You know, let's say That's interesting. Or large. Like that, you know, those people networks a lot. They talked about their process of their business, and they say, I found that tool.
Philippe:It's amazing. My assistant can help me with my emails. And now he's just happy to send the referral link because even if they're making a lot of money, like, It's like Basecamp, right, with with your tool. If you can lower your price, it's always a win. So they just have that small and sensitive to actually share the link that before It did not.
Philippe:Right?
Justin:Yeah. And do you have it in your app somewhere? Like, is it is it pretty visible?
Philippe:You open the menu, you get, like, referral the options like settings referral profile, and then there's a small, like, money emoji. So it stands out. So you you always see it. Yeah.
Justin:I think people like that idea of being recognized as well. Like, I recommend products all the time. And sometimes if I don't have a referral link, it's like, man, like, They don't realize I'm sending them all this business. I just wanna be acknowledged. Yeah.
Justin:You know? I just wanna add the acknowledgement. And so, like, SavvyCal has a referral link right in their app. And if I'm recommending SavvyCal, I always I'm always like, oh, yeah. There's a referral link, and I'll, like, go and grab it.
Justin:Not because I wanna get I don't really care about the money, but It's mostly just like, I want them to know that I've recommended them. You know? I want some acknowledgment. It's just like this base human thing where we wanna be recognized.
Philippe:But in their case, you always recommend them just by using the product because in like, when we booked That I received the email. I'm mostly using Calendly as, oh, yeah. That that business, I didn't remember about it. Yeah. I just checked.
Philippe:Right? That's the beauty of those business. They can promote themselves like just the virtue of offering their service. And we always try to find feature that did that with missive, and we really, really found some something that that actually worked.
Justin:The is do you have some like, do you do have a footer that says, like, sent by missive or anything like that?
Philippe:Yes. But, like, most people remove it, obviously. Right? They put their own signature. Yeah.
Philippe:We do offer a live chat. You put can put on your website, and it used to be mandatory, like, Like Intercom, whatnot, it says, like, from missive. But, we decide, like, to add a setting so people can just remove it. It's like, yeah.
Justin:Yeah. Because transistor definitely has our embeddable player says powered by transistor, And people can remove it if they're on the, higher tier, but it does help, Again, for indie businesses, you just, you know hey. What are these folks using? Oh, they're using transistor. I just got a, In email the other day, I asked people how they heard about us when they sign up, and someone said, oh, well, I just looked at what my competitor was using, and They had a feed their RSS feed said transistor, so I just came and signed up.
Justin:Have you folks figured out a way of tracking where people are coming from. Do you have a sense of how people are finding you? How do you how do you know, for example, that most people Find you via word-of-mouth.
Philippe:It's actually the calls I have with customers. Usually do a lot of calls. So every day I do calls. And, it's it's one of the last question I asked. So thank you for, having this call wherever you heard about the product.
Philippe:And that's usually how it's the best way to actually find out for real. Right? And now with the referral program, we can see If it's coming from which customer's referral.
Justin:Yeah. Who's the that's brilliant. How did you get the insight to do those customer calls? Like, how is that structured. They sign up and then you just reach out.
Justin:Do you reach out to everybody? Or how does that work?
Philippe:A lot of potential customer will reach out with question. And usually, we can schedule a call from those early emails or they're gonna request a call. And when I send you Customers that, seems to, have at least, like like, 4 or 5, 6 or more members. I might reach out by an email. We usually all we send 1 auto email.
Philippe:We don't send, like, a really long like, we don't send 20 emails. We just send 1. And usually people reply to that email and then we can schedule a call. It's all a manual process. I hope most of my days with calls.
Philippe:And, even pro like, people ask us, what's your, strategy for product road maps The strategy is like we have calls, and then we have about what's, like, the pain. And usually, it it really comes from Either emails or calls with customers. And and sometimes there's something we knew for, like, the last 3 years. Oh, that's that's a pain. But then I have a call with someone, And he really explained to me why it's a pain.
Philippe:I'm like, oh my god. Like, I'm ashamed. Yeah. We need to fix that, like, tomorrow. And then, like but the customer are amazed because, like, hey.
Philippe:It's it's it's fixed. We shipped it because you explained it to me, and now I understand, right, why it's a pain. And that's how we do product roadmap. It's like it
Justin:I mean, honestly, keep it simple. Like, that is the the That's one of the reasons I think this blog post that you wrote, and people have probably seen it. It's the the things we did not do while reaching 2,000,000 ARR. I think what resonated with people is, you know, in our space, in startups, in In, SaaS, there's this long list of things you gotta do. We have to have you know, we have to track every single customer, the the life cycle of every single and how they found us and all these things.
Justin:And, really, you wanna market where the simple solutions work, which is like, let's just do a call and talk to the customer, listen to the customer, and you get right away. You can you can do all of these other things, like, to figure out how they found you and attribution and all that stuff, or you could just book a call and have them tell you right when it's fresh and be able to interact. And there is something about being face to face with a customer and really getting a sense of where they're at, like, what's going on in their life that brought them here today. Is there what kinds of can you give us an example of A revelation or a feature or something that came out of a phone call, like, what they said. Something came out of the phone call, and you're like, okay.
Justin:You mentioned that you had to build something right away.
Philippe:Yeah. I have an example. I think that's something we fixed quite quickly. So we we we shipped the live chat on the website, okay, a few years ago. And this really was more about marketing so people could see from.
Philippe:Right? So we really didn't want to be on the market of live chat, but we thought, like, hey. People ask for this. We'd prefer to integrate with Entercom the solution in missive. But we said, well, if we release our own simple version, we might also get, you know, good marketing for it.
Philippe:And then we really ship like a nice it's quite nice, but it's simple. Like, it's basic. There's no buts. There's no, like, complex questions or whatnot. But it's it's a nice little one.
Philippe:But we had no way. So when you chat on the live chat, and, So if if you are the customer support guy, you reply. What if the person is not on the website anymore? Right? So they don't get like, they have to go back on the website to see that there's a new message.
Philippe:Right? So you need an email receipt. And we were always for, Like, a year or 2 even, it's like, ah, it's like we want a simple like, it's just a live chat. It must be simple. We don't wanna invest too much time in it.
Philippe:But then I had a conversation with someone. It's like, look. I love missive. It's like life chat is just like a shoe conversation a month I have on those, But it's useless. It's like people are angry about me because now they think we don't reply to their message.
Philippe:It's Like, they don't remember to go back on the website and then, like, she's like, you don't like, you're like, true. It's like, now that you explain it to me like a machine that we offer the live chat without this functionality. Right? So this is one example.
Justin:I love that example because as you're telling it, I'm getting often, I think, especially with with, like, it sounds like you have a lot of people with strong opinions on your team. And, you know, our team is the same. We have we have our own personal philosophies. We have our own personal ideologies, our own personal things. And in our bubble, we could say, this is stupid.
Justin:Like, that that idea or that feature, who needs that? Like But when you come face to face with a customer and they can really let you in to their space and say, like, this is my world and emotionally convey why they need something, it just hits so much harder, doesn't it?
Philippe:It does. Yes. And and and then I think that's one reason that missive is is is is is good now is because all our preconception That make miss it quite rigid and usable just for us at the beginning slowly went away and we expand, you know, our vision. And by talking to people and, yes, microfounders don't take call. And usually it's me.
Philippe:And sometimes we agreed previously. I'm like, Well, now, like, I talked to that customers and I talked, like, to many others, and they're saying that. It's like even if we believe that It's not true anymore. Like, I've talked to them. They don't want that.
Philippe:They don't accept the solution we provide because it's too long or it's Or one example is they they don't some business don't have a high level of trust with their employees. In our case, Our founders, it's like, we trust, like, the you know, it's like the features about trusting your employees. For some customer, it's really important. And now that they explain it to you, like, I have a new employee every month. The Process of removing it must be simple.
Philippe:Health is a pain. Right? And I well, that's true. We never actually deleted a member of our own organization and miss it. Right?
Philippe:So we were not good at that process. But by having the conversation, you're like, well, now I understand why it's really important. Now I'm shit a solution.
Justin:It removes those blind spots. Have you figured out a trick for conveying That to your cofounders, like, when you learn something and they still have a conviction that runs the other way, how do you navigate that?
Philippe:A lot of discussion. Yeah. We were 3 quite well, especially me me and Rafael. It's like the CTO. It's like usually this Etienne is always like you will understand all positions.
Philippe:The kind of guy that can actually kind of Understand the positions like, well, I kind of agree with you, but also with you. Like, I'm not gonna take a side here because both makes sense. Right? I know where you're coming from YouTube, But then we have, like, a heated conversation, and usually we come to a common ground. But, I mean, I guess it's the same in all, like, tech companies.
Philippe:It's like a lot of conversations or debate.
Justin:I mean, I think what what's great is that if you have those conversations, The customer's world becomes so much real more real, and then you'd it it it is easier like, when it's just like your own convictions about something, like The button should look this way or, you know, why would you need to remove a team member? We've never had to do that. But when you have a customer and you can say, listen. I'm just Advocating for the customer right now. This is no longer about what I want as a cofounder or a team member.
Justin:This is about what's gonna be best for customers. And if that's and, really, the way that we are competitive is to understand the customer better than our competition. If we understand the customer Better than our competition, that's how we win. When we can hear something on a Monday and have something deployed by Wednesday, That's where the indie SaaS company wins is if front, that might take them 6 months to do that, but we can do that now in a week. And we can take these learnings from the customer and synthesize them so much faster.
Justin:So, yeah, That's great. I I I that's amazing that you're doing that many phone calls.
Philippe:Yeah. And still, that's something with I did for for a long time, and and I I I still wanna do it because it's kind of a way to keep we're a small team, obviously. Like, if I'm not doing them, nobody's gonna do them. But Even if we grow, I see myself still doing them. Right?
Philippe:And I think, like, Jason Freed from Basecamp still do some of them. I'm not sure, but I think I heard him, say something like that at some point in the past. I think it's important to to just keep being grounded and not being like, You know, we something think we're really clever. Sometimes we think we're really clever. And, we just Build solution, like, from our imagination and we think they're good, but it's like having real conversation with people with real issues like ground you and then It helps you focus on the real pain of your customers.
Justin:Totally. I think well, I think that's a good place to, leave it for today. I I really enjoyed this. This is great to hear about, you know, what you've done, the journey. I think also getting into the the nuance of how Indie companies really do kinda get started and grow.
Justin:Super awesome. Where can people Catch up with you. Your missive is missiveapp.com. Anywhere else you want people to check out?
Philippe:Well, you they can go to my Twitter. Twitter, it's p lehou x, So, pillow. And, yeah, that's pretty much it. And we're looking for a a Ruby on Rails developer. Someone is interested to join a really, small company, but at this, active and doing amazing things.
Justin:Sweet. Well, we have lots of rails people that listen. So I'll I'll I I can even put a link to any job posting you have in the show notes. Thanks for being here.
Philippe:Amazing. Hey. Thanks, Justin. Thanks a lot.
Justin:Alright. So thanks for tuning in to that interview. If you wanna get ahold of me, I'm m I Justin on Twitter. Wanna say thanks to our monthly Patreon supporters. Jason Charnes, brand new supporter.
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