How Loom CEO Joe Thomas grew Loom to $50M revenue and 120K customers in 2023.

hello everybody my guest today is shahid khan he's the founder of loom he previously worked as an entrepreneur in residence at nfx a venture capital firm focused on investing in networks and marketplaces prior to that he was an analyst at los angeles-based venture capital firm upfront ventures shahid you ready to take us to the top yes all right very good yeah so you're building loom now which i think a lot of people have heard of you guys have really taken off kind of asynchronous video communication for teams um what am i missing anything else you want to add in terms of what you do nope that's that pretty much nails it um loom is the easiest way for people to record a quick video of themselves and share that video with the team member uh whether people are remote or distributed um it's easier than hopping on a video conference call or sending a very lengthy email or you know screenshots with air with arrows kind of scattered for them there was i think the way i came across you is um i buy and sell companies and one of my little tactics to find companies to buy is to go to the google chrome web store sort by productivity look at highest users to fewest and then if the update date by the developer was more than like a year ago i assume it's inactive and they think it's worthless so then i go out and try and buy and i remember coming across you guys earlier when you had like 100 000 users clearly very active though now you're up at i think almost a million on chrome is that your number one growth channel uh so i would say our growth channel is pretty organic if you send someone a loom video they'll watch it they're curious and they'll sign up uh there are a couple of growth tactics that we have implemented uh such as once a user is done watching a video we try and prompt them to sign up uh to either reply to a loom video with another loom video but we use those different product hooks and triggers to kind of continue the um the growth uh loop have you actually gone deep into kind of k factor invite sent and then try and figure out how to shorten the viral coefficient cycle yeah we so we experimented quite a bit with like a referral system where we would give say like five dollars in loom credits for every person you'd refer back to loom um and that kind of encouraged people early on probably when we were at 100 200 000 users uh to invite their co-workers because there's like inherently you know a network effect when if i invite another person from my company who's also using loom and we share videos with each other um we're kind of like in congruency when it comes to like relaying information back and forth um and now it's just part of our process so we experimented with uh to-do lists checklists um various formatting we actually had a growth engineer at one point whose uh job was solely to launch an experiment once a week um and a lot of those experiments those that you know exceeded uh we launched into production those that did not work um we ultimately just moved move forward what was the frame so i'm always interested in testing frameworks because if you believe that whoever tests the fastest today wins and you look at amazon that we're probably running a billion tests right now facebook same thing then you want to understand testing frameworks so how did you set this growth mark you know whatever you want to call him or her what structure did you give them so they could get the velocity of test as high as possible yeah so we we came up with a bunch of ideas you know there's there's a lot of things that we can experiment around whether it's um triggering someone to record a loom video giving them like jobs to be done specific use cases or if they're writing up an email um it's like hey you know we noticed that you're spending a lot of time drafting up an email just record a loom video it'll take you two minutes to you know convey your message inside gmail uh inside gmail yes so we at one point we actually had a um so anyone who had the chrome extension was able to uh either compose a new email with text or create a loom recording and then that video would natively insert uh into the uh the compose window and for anyone who uh had the chrome extension they'd be able to watch the video in line in the email and for those that didn't have the chrome extension which was obviously most of the users or sorry most of the recipients are receiving the email um it would just be a thumbnail with the play button that they would click on and it would take them to loom's website got it really interesting yeah there's something to be said for this i mean i even find myself now when i get texts i'm just busy it's just so easy to hit the record audio button and literally even if it's only a three second audio i'm way more likely to do that than try and like knock out a text i mean there's something about the like communication and moving away from even text like video audio thing and you're potentially in a very interesting spot to go after that what feels like it's going to be a natural big market yeah so the one thing that we talk about quite a bit um here at loom and also uh to our customers is you know we we see that consumer behavior tends to lead the path of enterprise by around two years so what we saw with instagram snapchat where people would pull out their phones and they're pretty um you know like they're social it was socially acceptable to record yourself uh and send a video of yourself speaking to the camera and like these bite-sized video uh like video recordings files um we're starting to see that trend and behavior kind of come into the workplace and that's why we feel you know with video and as more companies are becoming remote and distributed you know synchronous calls aren't always the best answer um so sending an asynchronous quick message that takes you just two minutes three minutes to record um tends to be the better option guys there you have it shaheed is saying he is snapchat but b2b right that's how it works uh so he'd walk me through okay so we've talked about a lot of stuff here um what do you care most about right now i assume it's just it's so much just free user growth right uh yeah right now so it's completely free user growth and we've you know as we've been uh launching experiments um we haven't necessarily paid anything uh there hasn't been any paid marketing done on our and it's normally been like the community uh has been talking about loom and you know if i'm a designer at one company um and i hang out with one of my other designer friends i'll bring it up in conversation so word of mouth is also very key for us um is there a paid model though uh so right now we've been completely bottoms up and actually as of february 19th we just launched loom pro which is our first premium product um wait so how does that code for your first paid product correct okay yeah so it's at ten dollars per user per month and that basically allows you to do um things on top of uh the existing free product such as if you're a salesperson and you record a video for one of your clients um and you're trying to you know upgrade them or if you're recording a video for a lead and you're trying to convert them you can basically attach a button um at the end of your video that'll allow them to go straight to say your upgrade uh page so there's a lot of things that were allowing um we're trying to take the behavior of people recording videos and making them more tactical in nature um so there is like a call to action or there is you know analytics in terms of who watched the video how long when did you launch the company what year uh so we launched loom the product itself june of 2016. okay and so here's what i'm going to ask you right um people listening well how did he have the luxury of not having to worry about you know revenue and a pricing page until now right he's two and a half three years in so what's the answer to that i'm gonna guess here you potentially raised right out of the gate because you were in the ir uh yes so i would say we started off the company my two co-founders and i uh we i mean obviously very humble beginnings we lived in a apartment in san mateo my co-founder joe actually stayed in my room with me and it was basically us just bootstrapping in fact we actually launched um loom used to be called open test which was a completely different idea that we spent three months building couldn't find product market fit pivoted into a different idea uh same scenario built a product didn't find product market fit and then at the very end as we were running out of cash uh we had to come up with some hail mary and that's when we realized that people were actually using the chrome extension we had built um that was mainly targeted towards user testing uh people were actually recording these videos and sending updates to their co-workers with the exact same extension so we decided to follow that path and then launch the product in june of 2016 and then in two and a half years we went from zero to now 1.1 million registered users in about 21 on about 21 000 companies around the world okay so 1.2 registered users and sorry how many companies uh 1.1 million registered users and on 21 000 companies around the world and and so the the question i have to follow up with there is that number is great it's a good it's...