How Hotjar CEO David Darmanin grew Hotjar to $27M revenue and 21K customers in 2020.

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 help bent on global domination we just broke our 100,000 unit sold Mark and I'm your host Nathan Latka okay top tribe this week's win of the $100 is Zach Thon he's a 22-year-old Apple employee and he's listening to the show and loving it for your chance to win 100 bucks every Monday simply subscribe to the podcast on iTunes now and then text the word Nathan to 33444 to prove that you did it to enter all right guys I talked about this earlier but I schedule like so many meetings it would blow your mind I mean all my podcast interviews right hundreds of bunch mors I talk to monthly I schedule and you know what I do it so efficiently I get them all to agree to my calendar so all the calls are back to back to back that means I'm not switching in between tasks all day long I get them to batch so I can be very efficient it's so critical and I use a tool called Acuity scheduling to do this at Nathan la.com schedu it eliminates back and forth between me and people I'm trying to meet with it makes it very simple and most importantly they help me keep my not show rate very low because they send out reminders helps you look very professional so go to na.com schedu to sign up and you get a great deal you know you guys know this I hit people hard I make great deals and Gavin the CEO has given us a great deal if you sign up like normal people okay on their website you only get a 14-day free trial you use my link na.com schedu to get 45 days free okay it's the best it's free go to Nathan la.com schedu right now to sign up and I'll see you there if you enjoyed David today go back and listen to Ramy yesterday they found it a pointless and it just passed 35 Grand in monthly recurring Revenue the founding story is very interesting the two co-founders found each other on a Reddit thread now they're serving over 1100 customers good morning everybody Nathan lka here our guest today is David Daran and he is the CEO and founder of hot jar over the 12 years before founding hotar he generated hundreds of millions of dollars in growth Consulting small to Fortune 500 businesses he's built multiple teams develop Brands and run hundreds of tests for his clients spanning across 19 languages 12 currencies and 13 different Industries hotar is now used on over 150,000 sites around the world and the company has grown to 3 million euros in ARR in under just one year we're going to dive into all of it David are you ready to take us to the top yes I am and thanks for having me you bet thanks for coming on all right this will be a lot of fun so tell us first for those not familiar what does hot J do and how do you generate Revenue sure so hot jar is a tool um that allows site owners site managers right so designers marketers um to pretty much see exactly how their users are using their site right so what does their experience look like so it takes the form of a heat map of how people interact with a page or replay their recordings or ask them questions so it gives you that knowledge and the way we see it is once you know how they're actually using your site then you kind of really know what to change what to improve next right so that's that's what haar does really well I have never in my life David felt more like a Russian spy than I did when I installed hot jar on my new company the top inbox.com I'm like swatching these you guys can see how I do this in screenshots at Nathan la.com hotjar but David I installed it and I'm going there's no way he's actually going to give me a video of a user on my website and show me where they click and where they SC scoll and sure enough that's exactly what I get it's amazing yeah and in fact like from a privacy aspect point of view um it's not really a video right so we're kind of recreating the HTML of what's being done and in fact we're super careful to avoid any like sensitive data or stuff that's shown but it is spooky right because it's we we like to use the word empathy it's like it's the perfect way to get into the shoes of your users and see what they're experiencing look my options are use hot jar right or and do and record these automatically or set up a, 101 Skype calls with every yeah potential person who visits my site which you can't contact them it's hard to find them and it's hard to schedule and it's hard to show up and so I mean it's it's great that's one of the reasons I want to have you on so now that people know kind of what hot jar does what's your business model how do you make money so we well a little bit of background on this right just to give the context um so in the past when when I was starting off in my career and I was still very early on in learning there was a lot of this technology already available right so it's not like we created this stuff but it was incredibly expensive and was not accessible so you had to do demos and you'd need to be qualified by an Enterprise sales team and all that stuff so what we wanted to do is we wanted to eliminate that right disrupt that aspect and make this accessible and available to anyone even if you're a student or an early stage startup or make it suitable even if you're a big business so what we did what we've done is we've done a premium model so premium means there is a free package uh which has some data limitations but it's sample so you still get juicy insights and then you can scale up your data collection rate that's kind of the premium side of it yep that makes sense so what is the average customer kind of paying you per month on average um so on average the number is going up and we are so I'm going to say Euros right sure that's fine yeah so we're we're just shy of the 50 range so it's it's it's relatively low we are a volume company but that's typical when you do premium um but if we do well we expect that number to constantly go up so when we started was it was in the 30 EUR range yep so about 50 about 50 or about 52 us um people start using you as they get more Addicted to You their usage goes up their addictiveness goes up and they pay you more for more data and more features that's correct that's great and give us a sense of kind of scale how many custom are you currently serving so we are serving just over 10,000 customers um and yeah you mentioned how many sites it's around 180,000 now running hard dve got it so what each each C that's that seems like a lot each customer has on average 18 sites well no because since it's a premium model um of the 180,000 um so if we have 10,000 customers 17 ,000 would be either free users or not using anymore got it okay inactive yeah that's the freemium model right you have a lot of people are coming and going um it's it's very consumer oriented so I would argue you're I'd argue you're beating by the way most consumer startups I mean you have about what a 10% free to paid rate versus most get like a three or 4% right yeah and it's typical to see when you apply the consumer model to the B2B it is typically higher actually yeah okay got it so and then is the math simple can I just take you mentioned you had3 million EUR in AR that was that last year in 2016 yes we're pretty much double that now yeah I was about to say so if I take 10,000 customers times a $52 arpo is it fair to say you're doing about 500 Grand in monthly occurring Revenue that is correct okay great so um so again three million last year um what what do you think you'll do I mean obviously it's the beginning of the year what do you think you'll do 20 uh 2017 what's your go that's a good question that's a good goal that's a good question Yeah we actually just had our leaders Le leadership session um earlier this month so we're looking to to to more than double hopefully that's great double the monthly uring Revenue yes that's great and what tell me more about the team so how how big is the team size today and what's your executive team look like so we're quite a small team right so we're definitely on staffed for what we're doing so we're roughly around 22 people now um and the leadership team we're eight great okay and how did you pick that I mean that's an interesting concept why is a leadership team important for hot jar and how do you think about who's in that and who's not that's a good question so we we were quite a big founding team so we're five people so we are yeah we're automatically in the leadership ourselves right and in a way it was I'm so happy that we were five people because it kind of feels like the more complex the the the product the more complex the business the the better it is to kind of be a bigger team I I tried to do onean show before or we were two people at a certain stage as well and other projects and I much more prefer being five obviously the advantage is that we had all work together so there are less risks of kind of having...