How Typeform Reached 125,000 Customers and $100M ARR with a One Funnel Growth Strategy (Interview with CEO Joaquim Lecha)

Event Context and Introduction

Nathan Latka

00:00Quick context. This was recorded March twenty eighth and twenty ninth. So a couple weeks ago at my live event, saasopen.com. We had a thousand software CEOs there. If you missed it, we hope to see at the next one, September fifth and sixth in New York City, sasopen.com. But for now, let's jump into the recording.

Joaquim Lecha

00:18>> That we accelerated growth on that first brick, we added another almost 60,000,000. Can we aspire to have paybacks within the year? Six, eight, twelve months.

Nathan Latka

00:33Hey, folks. If we haven't met yet, my name is Nathan Latka. I launched and sold my first software company back in 2015 and went on to write a book about it, which you guys made a Wall Street Journal bestseller purchasing over 30,000 copies. Thank you so much for that. After the book, I launched this show and one went on to create founderpath.com. I raised a large fund to do non dilutive deals with b to b software

00:59founders. So far, we've invested in over 400 software founders totaling a $150,000,000. Here in 2024, we're doing three to four new deals per week. So if you're looking for capital and don't wanna give up equity, go sign up at founderpath.com for free to get your offer. Alright. Let's jump into the interview.

Joaquim Lecha

01:18>> Hello, everyone. Good afternoon, and thank you for being here.

01:24>> I'm fortunate in my position, I have the opportunity to talk to many leaders, other CEOs, other founders, other departmental leaders. And the question that is in everybody's minds nowadays, especially nowadays, is how can I help my company grow more efficiently?

Typeform Overview and Talk Agenda

Joaquim Lecha

01:45>> So in the next twenty minutes, I wanted to share with you our past, how we got to where we are. And to, let's say, there's two chapters to these, up to 125,000 customers globally. And more importantly, I also want to talk to you about how we are focusing and thinking about growth and efficient growth in this third chapter of the company that started in 2023. And in that sense, that is through what we call one funnel.

02:20>> I would like to also explain you the five specific steps that we've been taking since 2023 to implement that one funnel. Hopefully, with the idea that after this, you will take away some new insights and especially some actionable steps that might help you also grow your companies more efficiently in 2024 and beyond.

02:50>> Who knows typeform?

02:54>> Okay. That's good. That's good. Thank you. Thank you for being users and customers of typeform. For those who do not know typeform, the company was founded in 2012 with the objective of helping companies ask important questions to their most valued audiences. So think of a marketer that wants to know the name, the surname, the email, the contact details of somebody. Think of the product manager that wants to ask important questions about the new feature or the

03:26>> new product that is available, but needs to improve. These things are done through mainly surveys and quizzes and forms via text, via video, via voice that people embed in their web pages, in their emails. And all of that was there. But the thing that set typeform apart was excellent respondent experience. We realized that if the respondent was having a new, fresh, and great experience responding those questions, our customer would benefit from more information, better information, higher

What Typeform Does and Its Core Differentiator

Joaquim Lecha

04:12>> completion rates, and so on. It's also a moment of truth where that company and each of those respondents get in touch, sometimes for the first time. So it's a moment where that company can stand out, right, and can feel different, can start connecting via brand, etcetera. The other pillar is our focus on making sure that we give our customer superpowers. Specifically, the first two of these were the engineering and the designer superpower. So without any coding

04:48>> or without any design knowledge, everybody can easily create amazing online interactions. So that's typeform. And one of the key takeaways here in our growth story is how the product was different, was better, and the product itself helped grow a lot.

Chapter One: 2012 to 2018 Product-Led Growth

Joaquim Lecha

05:14>> David, our co founder, shared with Nathan via podcast some revenue metrics. Here are for context. But what I wanted to talk about is these first two chapters that then will lead into the third chapter. The first two chapters is chapter one from inception in 2012 to 2018. In this chapter, the company achieved, let's say, the first level, the first step, the first brick, which is more or less around this 20,000,000. It took six years. And you

05:49>> can see that at the beginning, the slope of the curve is flatter, because it is never easy to start a company and to be successful. So kudos to all of you who are in these early stages. At some point, because the product was so good and purely because of the product, the growth started accelerating. Right? And you can see that in 2016, 'seventeen. But eventually, in 2018, the growth has slowed down to that 31%. So that

Chapter Two: 2019 to 2022 Go-to-Market Acceleration

Joaquim Lecha

06:23>> was the first moment in our time when we thought, Okay, what got us here will not take us there. We have to rethink this. And that's what we did. Right? So enter chapter two. Because chapter one had been purely product led growth, we thought, what are we going to act in this chapter two? And what we thought was we have to accelerate with go to market. And in the next four years, so 2019 to 2022, you

06:57>> can see that we accelerated growth. And on that first brick, first 20,000,000, we added another three bricks, or almost 60,000,000. So let's talk about that a little bit more in detail.

Identifying the Viral Growth Loop and Setting One Goal

Joaquim Lecha

07:11>> Okay. We need to accelerate growth. We need a second engine. That first plane was a small plane with one engine, the product. Right? Now this plane becomes bigger. It already has 45,000 customers, but it needs another engine. Go to market is the engine. What we do is we go and take a look at our customer base. We realize one thing. Every customer creates forms. These forms are shared. There's three seventy submissions on average per month. So

07:49>> three seventy people per month per customer are exposed to the product. Also, customers are happy because the product is a good product. They talk about the product. So there's a viral growth. There's an organic growth. And their realization is customers bring customers. So as a company, we need one goal, one North Star, total number of customers. So that's the one goal that we set ourselves for, let's say, starting in 2019. Now, the goal needs a strategy.

Strategy Criteria and Choosing Google Search Ads

Joaquim Lecha

08:25>> How are we going to achieve that goal? I said already go to market, but what kind of options are there for us? So in terms of our strategy, there are four different criterias that we use to assess those options. The first one is if it can be something simple, better than complex. Back in the day, a lot of people talked about growth loops, right? So you had to invest in many different areas. And one thing, one

08:54>> flywheel would move a second flywheel. It was too complex for me. The second thing is it has to be scalable. I mean, we already have 45,000 customers. We should aspire to something that will bring tens of thousands, not hundreds or thousands. The third thing for me was we haven't done a lot of go to market in any sizable way. So we have to learn. So there needs to be quick feedback loops. So we have to know

09:27>> as soon as possible whether something is working or it's not working. And the fourth criteria there was, hopefully, it's not only positive ROI, but it's fast ROI. So can we aspire to have paybacks within the year, six, eight, or maybe twelve months? So those were the decisions. One goal, number of customers, strategy with clear criterias. And then we found out one tactic. The one tactic was paid marketing Google search ads. This is mostly what we did.

Results of Chapter Two and Slowdown in 2022

Joaquim Lecha

10:10>> And because we focused, we became very, very good. So our teams could learn very fast how to do that, how to improve it, how to optimize it over time, how to do automatic bidding, how to and we also, because we were focused on that, we also created very good partnerships, very good relationships with the partners that helped us achieve those results. So in these four years, we added these three additional bricks. We added 80,000 plus customers,

10:41>> and we added more than 300 submissions, 300,000,000 submissions. But you might have recalled the previous slide when last year, '22, we only grew 22%. And that was below our average. So second moment of recognition, what got us here will not take us there. Again, we went back to our customers, and this is early twenty twenty three. And we say, Okay, we don't have 45,000. Now we have 125,000. And taking a look at them, we saw that

Discovering Customer Heterogeneity and Shifting North Star

Joaquim Lecha

11:20>> they were very, very different. Right? So in company size, where they are from, how they use the product, what for, how much value they derive from this. The average of submissions per customer per month decreased to around three thirty. But we could see that that average, that applies to all customers. There were some customers that got 125 or less per month. And then within those all customers, we had a target group that got almost 1,000, something

11:53>> in the north of 900. And within that target group, there's other sub segments, specifically mid market companies that are actually using us at a bigger scale. They were buying the enterprise SKUs, and they were getting 15,000 to 22,000 submissions per month. So not all customers are the same. Some get more value from using typeform. And we should focus on these customers. Again, we needed to shift from one goal, being total number of customers, to something else

12:32>> that would support a much more successful strategy. What we did was to shift to total number of submissions. So now we want to increase, and we want to reach 1,000,000,000, 2,000,000,000, 3,000,000,000 submissions as fast and as soon as possible. And that allows us to think about those customers that derive the most value. In the end, the submission is a proxy for value, right? Because when you ask questions, the value is from the answers. So the more

Fragmentation Problem and the Case for One Funnel

Joaquim Lecha

13:00>> answers from more people, the more value you get. Another thing that happened is that we were decreasing our growth rate. We were focused on Google Search Ads. So what we did was a natural thing. Let's do more things. Right? So let's add more channels and sources. Let's kick off initially a small sales team. Let's do actions after support. Let's start maybe conversations with potential resellers and tech partners. All of those were different teams with different budgets,

13:42>> with different customer interactions, different data, and different processes, and different tools. So there was a huge amount of fragmentation that we understood was inefficient. For instance, if a lead is discarded by the AE or the SDR because it's no longer sufficiently qualified, that lead might be lost. That lead might not go to the marketing team, because these are two different teams. Second, they are looking at their job, obviously. They want to optimize for their maximum. And

Step One: Unified Team and Budget

Joaquim Lecha

14:19>> that's a local maximum. That's not the typeform or the customer maximum. So this is when we thought, Okay, instead of having so many different teams and processes, and in the end customer funnels, why don't we think about one funnel? It's one company. It's one goal. It's one funnel.

14:43>> So one funnel. The five steps to this. It's taken quite some time. I mean, in the end, when I look back, it's most of last year. Right? The first step, it's simple steps. And some of these steps are simple. That doesn't make them easy. But the first step is about going from fragmented teams and budgets to one team, one budget, from optimizing those local maximums to optimizing for the global maximum. What we did was hire a

15:19>> revenue leader, and we brought in all of the go to market revenue related departments. So now marketing and sales and channel sales and customer care and customer success and even pricing and packaging are reporting to that one person. And there is a wrap ups function that takes a look holistically at all of these functions and data sets, and determines what is best for the company, not for each one of these departments. So unifying, going from fragmented

Step Two: Unified Data Stack and Zero-Party Data

Joaquim Lecha

15:59>> to a unified team. The second step here is about, now that you have one team, now that you can start thinking about what are these data or interaction points with my customer? What information do I get? Where do I get that information? And go from fragmented data sets from, let's say, that reside in different tools so there's different fragmented tool sets and also fragmented processes to a unified customer driven tech stack. We, as typeform, believe and

16:39>> this is what we promote that every company has to be very close to their customers or to those valued audiences. You have to talk to them. So we always start with this zero party data. We believe that data is very important because it's an opportunity to engage the people. It's an opportunity to ask and get their intention and the information straight from the source. So that zero party data for us is very important. It can start

17:09>> in a contact us form. It can be because a survey or, let's say, a form triggered in your web page. It can also be because it's something that opens up inside the app or inside the software tool. That is important, but it's not enough. Your companies have a lot of other data that you can use. Data about, for instance, what app this person saw, what landing page this person comes from. Right? All of that, let's say,

17:45>> marketing activity type of data. You also have a lot of product type of data. Did the person sign up? Did the person start creating a form, for instance, in our case, right? All of that data is the first party data. The data you collect from the customer is zero party data. This data is the first party data. And then you can also buy third party data. Who is that person? What company does that person work for?

18:12>> In what title or in what position? In what capacity? Right? All of that data is contextual. So you not only have the responses, but you now know the respondent. This is very important, because think about product feedback. You might get product feedback, but you might want to understand if that product feedback is provided by somebody who is an expert user in your product, or it's a basic user, novice user of your product. So you have to

18:47>> understand the responses, but also in the context of who is responding.

18:54>> With all of that, now you can start personalizing. You can start setting every individual, every different segment in the right path.

19:10>> Step three is about understanding the customer, but the customers that we like. So in the past, used to have, oh, this is not my customer because I'm in sales. This is too small for me. Oh, this is not my customer because I am in marketing and I do self serve, right? So going from those fragmented views of who our customer is to one unified view of different segments. And the other thing that we learn is that

Step Three: Dynamic ICP and Customer Segmentation

Joaquim Lecha

19:43>> while you have to start somewhere, and generally is by doing an ad hoc consulting type of analysis that says, this is your target persona. This is your ICP. This is your buyer persona. That thing is a static picture that cannot remain static. So as you collect information and you bring these fragmented sources into unified data set, you also go into what is static and a priori to dynamic, ever evolving, and based on feedback loops, what is

20:18>> really working. The fourth step is about now you can think of different journeys for different segments. For instance, one segment is people who are inbound in our contact us form. Another journey is people that marketing could try to grab their attention, bring them as MQLs, and then they need a separate type of action. In one case, it's mostly hand raisers. It's inbound. In another case, we are going outbound with a combination of marketing and sales. It's

Step Four: Personalized Customer Journeys

Joaquim Lecha

20:55>> very important to prioritize. And here, again, I would go back to where do you have the biggest numbers? Where can you achieve the biggest numbers? What is most probable that is going to have an impact for you in the short term? Generally, Contact Us shows high intent, and that has, let's say, more probability of success.

21:17>> Finally, measurement. So all of these funnels can have their KPIs. And you have to measure what is happening, how many people come into the contact us, how many people are taking the call, and so on. By doing this in a very personalized way, by bringing all this data and knowing your customer and different customer segments, the final step, or the final thing that I want to share with you, is it seems to work. It took us

Step Five: Measurement and Early Results

Joaquim Lecha

21:49>> a year to get here. But in the last nine weeks, in terms of the highest valued customers, which is the enterprise SKUs, we've been seeing record levels of new revenue generated. We have increased a lot the opportunities with the additional targeting. We have increased the lead quality because of this enrichment, so wasting a lot less time of your AEs and SDRs. And we have also personalized those interactions to make sure that more and more of those

22:22>> people actually respond to the petitions to a meeting with, let's say, surpassed, in the end, revenue numbers. So that was that for me. I think I almost made it in twenty minutes. It was twenty one minutes. And I hope it was useful. Thank you very much.