How Weebly CEO Dan Veltri grew Weebly to $24M revenue and 250K customers in 2018.

hello everyone my guest today is david rusenko he's the ceo and co-founder of weebly he created the company in his penn state dorm room back in 2006 and weebly now hosts over 50 million entrepreneurs and 225 countries all around the world he's helped scale the company to 300 plus employees in five different global offices he's dad to a 1.5 year old and his hobbies range from the stunt car driving to roaring to a roaring game of bridge with his mother-in-law david are you ready to take us to the top yeah let's do it all right so here's the big question uh on an average night who wins bridge moore your mother or you uh you know it like bridge is a tough game and i've only been playing for a few years now so uh so i gotta give it to my mother-in-law she'll win every time and what are the stakes does she get a percentage of the company every time you lose what's on the table here that would not be a great bet uh you know you usually it's bad over a bottle of wine that's good all right let's jump into weeble here so i think most people obviously are familiar with the space but for the rare person who's not quickly tell us what weebly does and what's your revenue model how do you make money sure uh so weebly is the easiest way if you're starting a business and you're trying to trying to get online um and get found we was the easiest way to do that if you're trying to sell online and start an online store or even just get something as basic as a website up to get started you can sign up on weebly.com within 10 minutes you can have something online within a couple hours you can be completely finished and be ready to go and what's the revenue model is it a pure play sass or is it mix or what it's uh really easy um we're uh offer a monthly charge um it starts with free so you can get started for free um actually about eighty percent of what we offer is completely free um and it's very honest if you like the service um it starts at four dollars a month uh all the way up to um about 35 a month and um and just a simple monthly charge no advertising um you just uh if if you see value you you just pay for what you get and david is it fair to say the average is probably in terms of if you just looked at your paying customers you're closer to four or five bucks a month or is the average actually higher end 30 35 bucks a month no most people are sort of somewhere in that like 8 to 15 a month price range um so it's still really affordable okay and what different pricing uh kind of metrics are you using to drive up arpu is it number of seats is it number of pages on the websites is it number of widgets included what what leverage points are you using so for us it's entirely functionality right um and you know you get unlimited paid views you get effectively unlimited storage um so there's no limits on those kind of things but it's really just down to the functionality so are you using a more basic website that's just kind of telling your story that's probably the four to eight dollar months range are you starting to do some e-commerce and starting to sell online um that's in sort of that 16 to 25 price point um are you really getting advanced with the e-commerce you want to include our email marketing products um you know our facebook advertising products and really start to grow your business and get found that's where you get in some of those slightly higher price points and why have you chosen to take the war to two separate spaces and what i mean by that is on your website there's a clear delineation right when you start are you building a website or an e-commerce platform and on both of those sectors you have massive competitors be it shopify on e-commerce or squarespace wix and their guys on the on the you know website side why fight two wars at once sure i mean the space is huge you know i i i a lot of entrepreneurs like to um pride themselves on saying we have no competition if you have no competition that's a bad sign um you know that usually means you're in a small market so um the market's absolutely massive i think you know we um we go where our customers are and what our customers have told us more and more is that they're looking to start selling online i think maybe 10 years ago it was really about you know expectations were just a little simpler it's like hey i just want to get found i want to get that website online that's kind of our bread butter that's where we started and there's a whole host of people are just looking to do that um we're finding increasingly that our customers are trying to actually say look getting found is great but i need to start transacting online and that's where the magic starts to happen that's where you go on vacation your business is running itself right that's where you're making money while you sleep um and so increasingly that's what our customers are looking to do and we listen to our customers and we offer what they're looking for why not then go all in on e-commerce that ignore the regular hosting ecommerce is nice too because you have a direct attribution model they can see a return yeah i mean look uh you know we're continuing to push like i said exactly where um where where our customers are looking for value um i think it's you know we've delineated website and e-commerce um sort of on our home page it's not quite so black-and-white of delineation i mean you might you know even if you're gonna sell a physical product you might get started by setting up a website um you know even ecommerce functionality is on a website right so it's not quite so black and white i think for a lot of our customers um you know it makes sense as they're getting started understand are you selling today or are you gonna sell later that's kind of really the delineation um and you know i think over time a lot of people are going to be upgrading to transacting online it's just sort of the logical next step yep so you launched back in 2006 in your dorm room you've scaled to today i know you've raised capital give us a quick update there how much have you raised total yeah so uh we uh started um uh i wrote the first line of code in february 2006 it was a part of a class project at penn state um you know continued working on it throughout that class and that summer um i uh we're interning in new york city uh well applied for it got accepted to y commoner that fall moved out uh dr you skipped out i should say um from our last semester as well because we all david sorry i want to cut you off there real quick when you were doing this and you applied to y combinator what got you in were you post revenue at that point the revenue numbers impress them or your user base no the the you know this this was 2017 for simpler times uh if you will uh why commentary just gotten started most companies that were applying for y combinator at that point in time were just idea stage that's obviously very different today at the time i think we were one of if not the furthest along company um that had ever applied to and gotten into y combinator in terms of what though user base code lines written what so we had actually launched something okay um and and we had effectively launched a beta and that was at the time the furthest along but there was no way that you could pay us even a single dollar that that wouldn't come for another couple of years people actually at one point in time were just mailing us unsolicited checks for 50 bucks saying i'm really afraid you're going to go out of business like here just take some money like i love your product so much just have some money david that actually happened or that's just a hell of a good story utility and it kind of happened like it happened multiple times do you have a wall somewhere of all those just checks put up you know what like if we were smarter we would have kept the checks i think at the time we actually didn't need the money so you cashed them you're like that's what a burger tonight that's mcdonald's tomorrow night exactly that's funny right there yeah so 2006 you get into yc um to keep the story going from there yeah so we skipped us well i said we skipped high school because we all ended up graduating after the fact but we had a semester left and just and just i drove out um from uh uh penn state to san francisco um this was early january i drove 80. uh it turns out i would not recommend driving 80 in january i got stuck in wyoming for about three days um but but made it through um with all the servers intact in my car um made it out here to san francisco participate in the y combinator program um that april uh kind of a kind of a fun i suppose if you want to call it that milestone we we at one point were left with less than a hundred dollars in our bank account we just paid rent we just how many how many how many people were on your team at that point uh just the three pounders okay um and so um but but so we had food for a couple weeks and we had rent do like another two to three weeks so we basically had a couple weeks left and and we're really sure how we're going to make it through but demo day was coming up and we were sort of uh you know cautiously optimistic um...