How Docsend CEO Russ Heddleston grew Docsend to $9.2M revenue and 17K customers in 2021.

this is the top where I interview entrepreneurs who are number one or number two in their industry in terms of Revenue or customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have I'm now at $20,000 per talk 5 and6 million he is held bent on global domination we just broke our 100,000 unit soul Mark and I'm your host Nathan lka okay toop tribe this week's winner of the $100 is Rich Jones Okay Rich Jones he is stuck in corporate he wants to break free he's binging on the show for your chance to win 100 bucks every Monday morning simply subscribe to the podcast right now on iTunes and then text the word Nathan to 33444 to prove that you did it [Music] Nathan ly here this episode 581 coming up tomorrow morning you're going to learn from Calvin the CEO of simpo it's a SAS company with a team of just two people but guess what it makes a million per year and it's totally bootstrapped this is what I mean why it's way more important don't worry about being a unicorn hit singles and doubles Calvin is doing it and boy is he getting riched because of it you don't want to miss tomorrow's episode good morning guys and Nathan lad here our guest today is Russ hedleston he's the CEO and co-founder of docsend previously he was a product manager at Facebook where he arrived via the acquisition of his startup pursuit. comom Russ has also held roles at Dropbox graay stripe and Trulia he received a BS in Computer Engineering and an MS in computer science from Stanford along with an MBA from Harvard Russ are you ready to take us to the top absolutely very good well thanks for joining tell us first real quick so you arrived at Facebook via Pursuit uh what did Pursuit do Pursuit was a um system for human resources to manage their referral programs for employees and so it was a very smart way of tracking and understanding who's making referrals where those people coming from and helping companies just manage that whole process more effectively uh and after running that for a little over a year uh we shopped it to LinkedIn and Facebook and decided to go with Facebook I appreciate being transparent there and saying kind of you shopped it a lot of people say never you know never want to sell your company what what kind of made you guys decide to go through that if that was truly an intentional process it it was we looked at our own numbers and the theory that we had we had a hypothesis we wanted to test it you we got you know 40 companies signed up for the service few thousand users and then the numbers just weren't looking like we wanted them to for us absolutely so we would look at how many people were being referred and we figured out that they were going out of band like those hires were happening and then we were like why and then we kind of dug into psychology of what we're doing and without it being a separate podcast basically decided that some of our assumptions were incorrect in our product and that to change those assumptions would be a huge process and we were just kind of out at that point we' been doing a little over year raised about 500k okay and Facebook's one of our first customers so we went talked to them we talked to LinkedIn about you know you just like joining them yeah and you're you're right we totally decided to sell the company uh and to shop it around um so that that just made the most sense for us yeah would you say soft Landing Talent acquisition more or less oh yeah for sure the assets of the company weren't uh acquired but we were all incredibly happy with the outcome so you a product manager at Facebook what product were you on I was the product manager for the pages team uh so anything with a like button on it that's not a human being like a like a like a profile so uh that's a pretty big swath of of what Facebook does is is included under pages and you sorry you said you're working with the personalities versus the brands or the brands Brands and personalities both have Facebook pages U so both of them have like you can't add them as a friend and at the time it was a very small team at Facebook and uh I got to have a great experience being there and growing that team out significantly over a couple year periods so let's let's jump into doc send now so what year did you make the decision to leave Facebook and start docsend uh we started docsend in 2013 so it's you know over three and a half years ago now that we started the company and the very first version of it was uh something that came from an Insight I had uh while I interned it Dropbox while I was in Business School in 2010 and and that is that sending attachments is just really not a great way to go uh just brings up a lot of problems so we wanted to come up with a system that worked well for businesses to send uh documents as links and not attachments and there are a few properties that we really wanted that were just missing from all the other systems out there around security and tracking and being able to update things and just insight in what what is happening when I send uh content uh or documents out to people and so uh the first version of docsend was was just that that's just what we wanted very simple easy to use system sign up get going uh just hit the ground running and we launched that at Tech crunch disrupt in 2014 and what was uh because usually this is an embarrassingly low number which is which is obviously fine but do you remember what your first year Revenue was um if it was above zero uh no we didn't charge any money for the first year so it was for sure zero got it and we were just focused on growth um uh you couldn't pay us money if wanted to uh we launched the product and we just wanted to see what happens where does it go who looks at it like who's using it and so we launched it we saw a good Spike uh we saw a nice growth after that and we were really digging into the numbers around um like who is and it wasn't Facebook like growth numbers like if you look at a consumer company versus a B2B company it was clear that what Dacon was doing was a very high value um but it wasn't going to be a Facebook size in terms of like user count we just aren't consumer everyone is using docen for a business application but what happened in that year is that we took a hard look at everyone using doc end for instance people use it in fundraising all the time if you ask any venture capitalist about doc end they'll be like yes I get all Doc end links now and that was really nice for us um unfortunately that's not a great business to be in uh so we looked at some of the other cohorts of users that we had just that sample that use case is not a good use case for you that's right you can't build a big business around around like one time right yeah exactly after a few months they successfully and they're gone or didn't work which is unfortunately a transaction fee on that right right yeah this would be great we actually did get approached by a hedge fund about about buying the company and that would have been awful for everyone but I thought that was flattering in a way I guess that they were like we've seen so many of your links that we would like uh we would like access to your data like no security and privacy are obviously Paramount to us but in any case that wasn't a great use case what we saw was that salespeople do use doc end and they use it kind of forever yeah and sales people are kind of similar to fun people fundraising you're both selling something of high value you have to have assets that describe the value that you're bringing and you're trying to get a transaction done and there's a lot on the line so you want to make sure that the up-to-date thing is always seen you want to understand who's looking at it who cares who doesn't care so Russ if we if we fast forward you I assume you have Revenue today right we do so what is the when you turned on pricing give us kind of a snapshot January 2017 what's the we won't talk about every plan so just give us an average what's the average customer paying you per month uh it so it it's broken out uh in tears so there are basically two businesses we have one is the self-served business you can still come to Doc send and you can still sign up and pay us 10 bucks a month okay and that's great please do that it's an awesome product what we found was that we need to go after bigger teams and that the problem we solve is even more pronounced at large sales and marketing teams where um marketing doesn't know what content sales is using and sales has a really hard time just finding and sending the content they need to to close deals um and so all the tracking is involved in that but it's it's kind of a multiplayer game that we play and so that's the Enterprise plan we have and that's where we make most of our money today like more than 80% um uh it is uh do you see2 you see 820 kind of rules here that's right yeah exactly um yeah so it's especially we look forward to the next year as we go up market and sell bigger contracts we used to be 2080 and yeah 8020 is is a good rule of thumb in terms of what we uh look at we don't focus on the uh self- serve inbound stuff anymore it's more targeting...