How Wistia CEO Brendan Schwartz grew Wistia to $67M revenue and 50K customers in 2024.

just got done editing this interview you guys are gonna love it before i do that though i want you to know that i'm going to be in the comments for the next 30 minutes or so answering your questions if there's additional questions you want me to ask the ceo next time i interview them leave them below or if you're just loving the data points i get ceos to share click the thumbs up button below that's your way of telling me you're loving this stuff and i'll get you more of it additionally again i'll be in the comments answering any questions you have all right for 30 minutes enjoy the interview all right guys what's up nathan lackey here today our guest is chris savage he's the co-founder and ceo of owistia a web-based software solution helps marketers turn viewers into brand advocates to grow their businesses now more than 500 000 businesses across 50 countries depend on wisdos products to build their brands like hubspot mail chimp sephora starbucks and tiffany and co chris you ready to take us to the top let's do it all right man i already told you i'm envious of your video set up here you're totally putting me to shame this i'm just at my desk man this is how it looks it's not just another day in the office all right so we just said on the bio but anything you want to add in terms of wistia for folks that you know if they haven't heard of you guys what you guys do yeah i mean i would just say um we've been around for a long time we're classic overnight success you know failed security for many many years um and then figured out like how to build a freemium business and we just help small medium-sized businesses use video better and that means analytics see how your videos are performing hosting sharing tools marketing tools the ability to build channels like we have a ton of stuff to help people do that yeah now the context of this what i want to talk about is something very unique to what you've done which is an acquisition offer you got recently and decided to do something totally off the rails which was instead of taking the acquisition offer raise debt and buy the folks out so we'll get to that in about two or three minutes but first give us context in terms of where you're playing so would you categorize yourself as kind of smb min market enterprise what's the average customer looking like yeah if we're in the smb space i mean um you know there's a that's where we set our target i think like any business it's freemium you end up you end up with customers across the spectrum right like we're mostly smb there's some mid-market there's a little bit of enterprise in there um but we what it means for like how we've built the business is that like we have to be really efficient how we get customers um we have to make a product experience it's incredibly easy incredibly simple i mean i think also the other thing about the smb space as you know is it just it takes time right like it's hard to find all those folks so it's hard to build that brand equity um and so but that's the path we've chosen and it's it's been good for us so i mean fair to say sweet spot for you guys is your your 99 a month kind of pro plan it was that accurate or no yeah that's accurate okay all right so give us some let's post on a timeline and then we'll get to the recent event so when'd you launch the company what year launched in 2006. okay 2006. so how much how do you rate well first off when did you get the acquisition off for uh what year and how much did you raise prior uh we got the acquisition offer in 2017 and we only ever raised two angel rounds so for a total of 1.4 million we raised 650 000 in 2008 um and another about 800 000 a little less than that in 2010. dude i did not know it was that little i thought you had raised like five six million no no it was it was a very strong i mean especially in today uh when we see how much people race for a seed round yeah um yeah we raised very little yeah incredibly capital efficient and that was from the beginning like when we started the business uh my co my co-founder and i were both very fortunate in that we graduated college without debt uh my dad was a professor and had a good deal um and so we saved the the meager amount we earned the first year of school and that is what we used to to fund ourselves the first two years yeah now 2017 obviously was about two years ago give us before we talk about kind of logistics here give us a sense the size of company at that point how many customers are you serving and if you can kind of revenue range yeah um i think the revenue range was around like about like right at the time of the offer i think we were about like an 18 million dollar run rate or so um and i don't remember the exact customer number offhand at the top couple thousand uh tens of thousands tens up good that's that's good range tens of thousands okay so the acquisition offer comes in were you expecting it was it a surprise did you solicit it you know what's funny is that we actually had three companies approach us at the same time that all said we want to acquire you and i was quite surprised because you know people have pinged us over the years and poked around but never have we had three companies at once and it was the fact that those three companies came at once were like oh maybe something's changing in the market and so we should take these offers more seriously um and then it just kind of evolved right like you know you don't really expect to be spending your time doing that then suddenly you're spending all your time talking to people about um selling your company it took all your time i mean it was super time intensive it became very time intensive because you know there was like we were we really were not sure what we wanted to do with the business actually so it was like we had the acquisition offers coming in we also had thought maybe we would raise a growth round so we were talking to growth firms um how much what were you what were you if you did go vc that that time what would you raise i mean when i was being sold what they were trying to convince me to do is to raise you know 40 million bucks something like that um and so we were spending a lot of time like looking at our data and looking at the unit economics of like how things were changing and evolving um and thinking through what we would do in each of the different scenarios yep okay good so you're looking at kind of the vc site now did that actually mature into a term sheet or you shut that kind of down quickly um it was returning it was turning into a term sheet almost exactly the same time that um we were getting like the real offers okay were they did any of the acquisition offers turn into a real loi or a real term sheet real diligence um we were just we had gotten the numbers and like we were get i think we had gotten to one one of them like the loy to sign okay so where did i mean when did debt enter your head so it's funny because we're basically sitting there with this offer trying to decide like should we go to the next step and um we realized in that moment a couple things like well what would we do if we sold well if we sold the company we would work at this new company for two years and then we would leave and then my co-founder and i at this point we've been working together for 11 years we think we've worked together really well um so we thought we'd do something together again and we thought we'd probably try to build another company and we talked about the type of company we try to build and we're like well we really like the smb space we want to build a company with a strong brand we think there's a lot of stuff we can do in video you can see where this is going where we started to realize is that we were like we saw the business we're going to try to rebuild with and then they were like why do we need to rebuild it and that was the funny part was like i didn't expect that like you know why why rebuild and it was in that part of the conversation that we actually admitted to each other that we were not happy why we had been throwing the throttle down on growth for a couple of years and we had you know we'd been profitable in funding the business uh through having customers and we and we had cash reserves and then we had just been like throwing the throttle down like hiring like crazy spending tons of money on advertising because we gotten so much advice and we looked at the market we talked to all these growth funds and all these smart people who said if you're profitable then you're actually probably not growing as fast as you could and so we were trying to grow faster and it had made the company incredibly short-term focused because like if you lose 250 000 in february and you're planning on losing another 250 in in march but revenue is going to go up revenue doesn't go up and you end up losing 300. it ends up creating some stress how low was the bank how low was the bank account did it get in that time frame um i mean we let's that's a great question i think we we started with uh before we started to throw the pedal down um we had i can't remember the exact...