DocSend's $0 CAC Product-Led Growth Playbook

Omer (00:10.000)
Welcome to another episode of the SaaS Podcast.
I'm your host Omer Khan and this is the show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business.
In this episode, I talk to Russ Heddlestone, the co founder and CEO of DocSend, a SaaS platform that lets you securely share your documents with real time control and insights.
When Russ was an intern at Dropbox, he found that many people still shared files as email attachments even though it wasn't secure or easy to track, and he decided to change that.
Being engineers, Russ and his co founders wanted to build a product right away, but they resisted the temptation.
Instead, they decided to meet with potential customers to get feedback on their idea, which resonated with a lot of people.
Once they'd had enough customer conversations, they built Docsend as quickly as possible without putting much effort into design or marketing.
And to get the word out, they gave away free accounts in exchange for feedback.
It didn't take long for Docsend to become a quick success, but they weren't charging anything for the product.
As Docsend's growth continued, the founders realized they needed to change their model.
It was hard to keep growing without any revenue, so they created a $10 a month plan and the business kept growing it.
In 2016, the founders built a sales team to help generate more demand.
While it felt like the right move, their sales efforts failed.
Eventually they gave up on doing outbound sales and instead went all in with a self serve model.
Just two years later, the team increased their prices and reworked the product positioning, but didn't actually make any changes to the product.
Suddenly their most expensive plan was the most popular one and the more they charged, the better they seemed to do with free to paid conversions.
Today, DocSend's growth is driven primarily by word of mouth and SEO, and the team continues to focus relentlessly on building a great product.
To date, they've raised over $15 million and have a team of around 55 people.
This story is a great example of how to learn from your mistakes and why product focused models can succeed.
I think you'll find it interesting and insightful in many ways.
Russ, welcome to the show.

Russ Heddleston (02:51.830)
Thanks Omar.
It's great to be here.

Omer (02:53.670)
Do you have a quote, something that inspires or motivates you or just gets you out of bed that you can share with us?

Russ Heddleston (02:58.950)
I don't really have a quote necessarily, but something that's inspired me for a long time is just Building great software.
Like, at Stanford, I did a master's in human computer interaction.
And, you know, the cool thing to do is to, like, go into, like, OPERATING systems or compilers.
But I liked HCI because there's just a lot of software that gets built that's just not the right software.
You can usually build it.
It's just a question of will they use it.
And I just think there is a lot of work to be done in the software world building great software that people actually like to use.

Omer (03:28.990)
Great.
So for people who aren't familiar with Docsend, can you just kind of give us the overview?
What does the product do?
Who is it for?
And what's the main problem that you're helping to solve?

Russ Heddleston (03:39.150)
Yeah, sure.
It kind of depends on who you ask.
So We've got over 15,000 customers for DocSend today.
At a high level, it's basically just a way to send a link instead of an attachment and see how long someone's reading it and to have security specific to that link around, like, who can access it, who can they forward it to?
And the recipient never needs to log into a system, so it's just a better way of sending documents.
And we started it because I was like, why are people sending so many attachments?
There's so many ways to not send an attachment, and people were still sending attachments.
So we just kept following that thread, and it's kind of led us to where we are today with the product.
And we always talk about it as a horizontal product that we market vertically, because it could be a cfo, could be a CEO, could be a salesperson, someone in customer success, someone in banking.
Lots of different ways to use a product.

Omer (04:25.540)
So DocSend is your second startup, which you founded with your founders, Dave and Tony.
But can you tell us a little bit about your first startup?

Russ Heddleston (04:36.160)
Yeah, for sure.
So my first startup was called Pursuit.com.
we bought the name off a guy in, like, Massachusetts who's just hoarding the domain.
And I had two co founders for that one as well, and they were all engineers.
And I started Pursuit while I was in business school, and we raised 500,000 for it, ran it for a little over a year, and ultimately ended up selling it to Facebook as a talent acquisition.
We shopped at LinkedIn and Facebook, and so it was actually a good outcome to it, But I just learned so much going through that experience.
Talk about like a year of accelerated learning.
I made so many mistakes, but in the end, it ended up being just really productive for me and I was at Facebook for a couple of years running product for the Pages team, and then, as you mentioned, loved to start DocSend with Dave and Tony, my two current co founders.

Omer (05:21.830)
So how did you guys come up with the idea for DocSend?

Russ Heddleston (05:25.120)
It was an iterative process.
Sometimes I talk to founders and I get the sense that, like, you know, since age 4, I knew I had to.
This was my destiny, to solve this problem in the world.
And whenever someone has that, I'm like, wow, good for you.
Like, I don't remember anything about when I was born, and I certainly had no such desires.
So for.
For me, Dave and Tony, one lesson I took away from the first startup pursuit was to really be thoughtful before building something.
So as an engineer, there's always a tendency to just get in and start writing code, but then there's a lot of inertia to that.
So for Docsend, even before we knew we were going to work on Docsend, we basically had a big spreadsheet of a bunch of ideas that the three of us had.
And without writing code, we try to go sell things, we'd go talk to people, we'd really get out in the world.
And we just kept knocking items off the list that was like, nah, bad idea, bad idea.
With DocSend, I always say that you can't prove something's a great idea, but you can, in a relatively short period of time, show that something's probably a bad idea.
And so for Docsed, we just interviewed enough people where we were like, yeah, this just seems like someone should do it.
Like, I don't know if this is going to be a huge company or not, but someone should solve this problem.
And so after doing that for a few months, we kind of broke ground and just started writing code.

Omer (06:38.560)
So that's pretty unusual for engineers or developers to do what you just described, which is resist building something and instead going out and talking to people and trying to figure out if it's worth doing.
Because most of the time it's often easier to build the product.
And if you enjoy doing that, it's a natural thing that you can sort of lean into.
So where did that sort of mindset come from?
Why did you guys take that approach?
Had you already learned the lesson the hard way before?

Russ Heddleston (07:13.880)
Yeah, totally.
We had each kind of learned this independently in different ways.
Dave and Tony tried to start a mobile game previously that didn't work out.
And then, as I mentioned, with Pursuit, we had a bunch of ideas on a list for Pursuit, and we decided to Just go with the top one there because of our personal experience.
But getting a year into it, I realized it wasn't working and it probably wouldn't work and it wasn't going to work for reasons I should have known at the start, you know, starting docs.
And I was like, okay, let's look before we leap.
And you're right, it is kind of uncomfortable for engineers to go out and talk to people.
But I remember, like, one of my co founders, Tony, loves cars, really big car fan.
And so we were thinking like, hmm, I wonder if we can sell software to like, car dealerships.
And we went and talked to a few car dealerships and I was like, no, there's no way I want to sell software to car dealerships.
They had so many problems that are more important than like, what we'd be trying to solve for them.
That's just something we wouldn't have learned unless we actually went and had those conversations.

Omer (08:16.320)
What was it about Docsend?
What were you hearing back from your potential customers that gave you the signal that this is the thing for us to work on?

Russ Heddleston (08:29.760)
Yeah, for me, the idea came from when I interned at Dropbox while I was in business school back in 2010.
And I kind of assumed that Dropbox had solved the attachment problem where I used to email myself attachments.
They got rid of that.
And then while I was there, we came out with the link sending model where you can just create a link to a document and send that.
No more attachments and people are still sending them.
As we interviewed people, it became clear that if you're using Google or Microsoft, there's just not an easy way there to send a link.
And there's also not a lot of reason to send a link.
You just don't get much back from it.
We'd give people a menu of benefits.
If we did this, then would this be meaningful for you?
Would this be meaningful for you?
We just heard that, yes, it would be meaningful in a whole bunch of different situations.
And we'd record the conversations, we transcribe them, and we try to pull out common elements which actually gave us a pretty decent early roadmap in terms of what it was that we were building.
There was no one hair on fire problem.
It was just a collection of benefits that we hoped in total would be sufficient to change people's behavior, which turned out to be true.
For some people, caring about which page is read for how long is super critical for other people understanding that, hey, this link was forwarded to these three people.
Here's who they are.
Here's their LinkedIn profile.
You know, for some people, it's a security element around, you know, like, making sure that only these people can see it, but making sure that they don't have to create an account, like in Google Drive.
If I.
You send you invite you to a document and you don't have a Google account, you have to create a Google account.
That's too much work.
You're not going to do that.
So I'm just going to default to, like, sending you the attachment.
So, you know, we just heard enough consistency in the people we talked to that we were like, yeah, this is a thing that should exist.
Another thing we did actually was go around and talk to the companies that I thought should be building what DocSend is.
So we talked to Microsoft and Google and Box and Dropbox, and the response we got was like, yeah, this is a great idea.
I was like, are you going to build it?
They're like, maybe.
Maybe in a couple years.
I was like, okay, that's far in the future.
And then we got a couple offers to buy us, like, as a talent acquisition, which wasn't interesting because I'd just been through that and I wanted to create a real business.
But I asked them what we'd be working on, and their answer was something totally unrelated to what docset was.
So I was like, wow, they really aren't going to build this.

Omer (10:41.410)
So you pitched the idea of DocSend solving this problem and then they wanted you to come and join them and work on something else.

Russ Heddleston (10:51.490)
Correct.
Which is the most definitive way for me to be like, yeah, they really aren't going to build it.
I figured I had more to gain than to lose in being upfront with people.
And what I didn't want to do is I didn't want to try to build this thing, and then in a year, have a really big company I can't compete with, just, you know, do something identical.
And it's true.
I. I learned a lot more.
And, you know, there's definitely a startup fear that I don't think is warranted, where your startups will be worried that a big company will copy them.
Like, I was while I was at Facebook, you know, I would talk to these startups and they were, like, super cagey with me about what they're working on.
I'm like, listen, like, we for sure have whatever you're working on in a big spreadsheet of ideas, and I'd be terrible at my job if you shared with me what you're working on and I'm like, okay, everyone at Facebook, drop what you're doing.
We're going to go all in on whatever it is that like, no, like our roadmap is our roadma.
So I think as an early stage company, speed of learning is something that's just really important and that feedback loop can make sure you're on the right path.
Because again, I didn't want to do what I did at Pursuit where we worked on something for a year and then figured out it wasn't going to work.
If we were going to fail, I'd rather fail quickly.

Omer (11:54.970)
Yeah, I mean, in many ways you sort of think about this as it feels like this is a feature that Google, Microsoft, Dropbox could add that would make life a lot easier.
And initially when I sort of thought about the iea, I thought, how big is the opportunity?
And sometimes it's hard to sort of see that.
But you guys have done really well with this.
I mean, Docsen is now what, like an eight figure business and you guys are still growing.
How quickly are you growing at the moment?

Russ Heddleston (12:31.900)
We'll probably grow 75, 80% over the next year would be my hope.
We've had like kind of a bump in growth since the pandemic started, so kind of TBD how sustained that is.
And then we also have a bunch of big bets that we're coming out with next year, so we'll see what that does to our growth.
But if we can just keep doubling, you know, get near, near to doubling year over year, we're also cash flow positive and have a $0 CAC.
So it is a really interesting business.
And it kind of reminds me in some ways of Calendly, which is another thing where it's like, oh, it's just a little calendar widget, like how big could that be?
Yeah, they're very big.
So I don't think you could have started this business like 10 years ago.
No one would have believed this could be a thing.
But my belief is that we're creating something that is pretty universally needed across a lot of different types of businesses and that's enabled it to actually spread pretty quickly.
I think it gives us a very large tam.
Even though to your point, you're like, on the surface, it feels like a feature that someone else should add.
It's like, well, if you combine it with a bunch of other features and have clear messaging around the value proposition, then I think it can be a big business.

Omer (13:34.520)
Yeah, yeah.
And in terms of team, you guys are what, about 5455 people at the moment?

Russ Heddleston (13:40.440)
Yeah, I think we're 55 people.
And you know, one of the things I've continually talked with our team about is that the scorecard for a startup is not headcount and it's not capital raised.
I feel like those can be kind of misleading indicators of success.
Like we've all heard stories of companies raising a ton of money and going to zero or hiring a ton of people.
Like, being at a hyper growth company is not necessarily fun and there are often just a lot of management problems that come with that.
So we take a different approach where we say, what do we want to do in the next 18 months?
And then work backwards from that plan and say, what team do we need for that?
And then what funding do we need?
And it doesn't necessarily require a giant team.
Most of what we spend is on product engineering and design.
And for anyone who's ever worked on a product team, one of the best ways to tank productivity is to double the team immediately.
Everyone's interviewing all the time.
Then you're trying to onboard people just like it doesn't actually help you for a very long time.
So we're trying to be pretty measured about how we grow the team and it just happens to be the case that our revenue is growing faster than our headcount or our costs.

Omer (14:46.190)
So we're definitely going to talk about the $0 cac.
But before we get into some of the details of that, let's talk about what you did in terms of building the product.
So you had these conversations you've identified.
This thing is worth building.
How long did you guys spend on that first version of the product and getting in front of customers?

Russ Heddleston (15:09.200)
Yeah, that's a great question.
I wish we would have focused on that word you use, customer earlier because Docsin was free for the first two, three years that we had the product.
The first step after doing the interviews and then being like, okay, we're going to do it, we didn't focus on design at all.
We just made it super ugly.
And we tried to build a first version as fast as possible.
We didn't even have a marketing site.
And then I would trade other founders a free DocSend account in exchange for product feedback.
And so one of the first use cases for us was fundraising, sending your pitch deck around to investors.
Because, you know, a lot of times investors just don't read it and they say no, or sometimes they read it, or sometimes they forward it to your competitor and it gets back to you and it's just Frustrating.
So we would, you know, if you went to Docson.com, you just would see a login, but no information about what we did.
But in order to get something to market fast enough, I won't even call it market something to beta as fast as possible.
We would, you know, give founders a login and say, why don't you try this out?
And we got a lot of really good feedback from that.
And then we also used our own product for our own seed fundraising.
And actually one of the first people I sent a DocSend link to remember, there's no information about what our company does.
And in our seed deck, the first page was our team page.
Because that, you know, like my co founders and I are pretty strong backgrounds.
So I say put your strengths first.
So that's what I did.
And the person responded back to me, I love what you're doing.
I forwarded to this colleague, I can't wait to learn more.
But he only looked at the team page.
He actually didn't look at what we were doing.
So one of the very first people was caught in a lie.
It wasn't a bad lie or anything, but it's just really funny.
So I ended up talking to this person's colleague and we kind of chuckled about the irony of what had happened there.

Omer (16:45.720)
I love your login form.
That's really excited about that.

Russ Heddleston (16:51.400)
Yeah, exactly.
Even if he went to Dawson.com but he just looked at the team page and the team was sufficiently impressive that he wanted to take the meeting, which is totally fine.
But then, you know, that's not what he said.
So after he raised the seed round, then we went back and created a marketing site and made the design better and did a lot of cleanup and then launched it at TechCrunch Disrupt in 2014.

Omer (17:11.540)
And how were you guys sort of paying the bills in those first two, three years when the product was free?
Had you, had you raised money by then or was this a part time thing?

Russ Heddleston (17:23.420)
No, it was full time.
So I mean, that was another lesson I learned from my first startup is that if you're stressed about money or a lot of times, like people ask me, I don't even start a company and I also often ask them about their kind of personal finances and you want to make sure you at least have enough personal Runway.
So with the first startup, I was in business school, so I had like school debt and then we had company debt and that made it hard to really think long term about stuff.
It was not the best for DocSend.
You know, going forward in my career a little bit, it was nice because my co founders and I could each put in like, 100,000 bucks.
It wasn't savings.
It was just like, let's work on this for a year.
And we got our costs covered, so we only raised money when we wanted to hire more people for the team.
And so that's when we went out and raised 1.7 million that Unqork led.
And so that's what we were working off of for the first kind of year and a half.
And when we launched Oxend, there was no way to pay for the software.
It was just free because we were still just trying to figure out what would this become.
And then we were fortunate to raise an 8 million Series A from August Capital.
So we basically raised like almost 10 million and had no revenue at that point in time.
And then we needed to go figure out what the business was.

Omer (18:30.220)
Was there a plan for revenue?
Or you guys seriously was like, still, you know, figuring that out?

Russ Heddleston (18:37.900)
Well, because our theory is that DocSend is so horizontal, you know, we thought maybe it'll spread like a consumer thing.
So, you know, that's why it was like a free product.
And it was like we were going to, oh, it'll be freemium.
And it was like growing, but it was growing linearly.
It wasn't growing exponentially.
So I'm like, oh, if this is a consumer business, that's not going to work.
And so then we put in a paywall, and we noticed that conversion actually went up once we put in a paywall.
We also realized that all the people who started using it when it was free didn't actually value the software.
So that was another lesson for me around, like, oh, we know it's useful, but you kind of have to set expectations up front around kind of, what is this worth?
And so every time we've increased price, ironically, conversion has gone up as well.
But yeah, at the beginning, those first few years, like, we were just being really kind of capital efficient because we're just burning money, right?
We're not making any money.
And that was, to be honest, quite stressful.
So very happy that we're.
We're in the position we're in today.
I'm also very happy that we were fortunate enough to raise some money.
There's definitely some companies have the mentality of growth at all costs versus efficient growth.
And so one of the things that's paid dividends for us has been investing in efficient growth over time.

Omer (19:48.850)
So give me an example of that.
Because I think that's an important point.
I think we should just dig into

Russ Heddleston (19:54.090)
a little bit for sure.
So what are good examples?
So our biggest growth channel is the product itself.
So we paid a lot of attention in the early days to how people were using DocSend and how we could unblock them because there is some amount of kind of viral spread.
But even more than that is just word of mouth.
So like even today, 60% of our signups are direct people just typing in docsin.com and they come to the product.
So that is one thing that we invested in early.
And we definitely intentionally only built for the end user and just making it a cleaner and better product for them.
And that's paid off.
Like that is sustainable.
There will always be that kind of word of mouth spread.
On the marketing side, we in 2015 published research reports.
I worked with Professor Tom Eisenman at Harvard Business School on this first research report.
And we used a bunch of opt in data from founders that had been using DocSend.
Right.
Because those are some of our first users.
And it was really thoughtful, but it took a ton of time.
But that research report still gets a ton of visits.
So on the marketing side, we've since then come back and spend a lot more time doing more reports like that.
And that's a playbook that we can run, not just in fundraising, but in M and A, in sales and marketing, in customer success, in quotes and proposals.
So those pieces of content are evergreen, they take a lot of time, but they pay dividends over a long period of time, as opposed to demand gen or sponsoring a conference or up on sales, or there's just many other tactics one could use.
But the ones that have worked best for us have, have always been pretty sustainable.

Omer (21:32.200)
How did you get your first customer?
At what point did you decide that you were going to start charging?
So I think it was like, what, 2016 maybe around that time.

Russ Heddleston (21:42.280)
Yeah, I think it was.
Yeah, it was about 2016 that we started charging for DocSend.
Even before that, actually, I think the first revenue we got was a founder who used DocSend for fundraising, who gave me a bottle of whiskey as a thank you because our software was so helpful for him.

Omer (21:59.130)
It all counts, man, it all counts.

Russ Heddleston (22:01.290)
We'll take it back to the office.
Everyone's like, yeah.
And then in 2016, because again, we were trying to make it exponentially growing and it wasn't, it was a little better than linear.
So we're like, dang, okay, well, we gotta monetize if it's if it's not going to be exponential growth, we gotta monetize.
And we weren't sure how much to charge.
And so at first we just put, put in like $10 a month.
We're like, it's freemium and you can pay us $10 a month in 2016.
And then we noticed that like, yeah, people were converting and actually like it wasn't slowing our growth down at all.
Having kind of a limited free version and then this $10 paid version.
So I was like, huh, that's interesting.
I would have thought that charging would have decreased our kind of conversion rate, but it didn't.
So that was the very first step of monetization that we took.

Omer (22:46.970)
So you've got plenty of money in the bank at that point, but you weren't spending it on a lot of marketing.
Right.
I mean, from what I understand, like most of that money and the focus would still continue to be on just building the product.
And was that a conscious decision that you guys made or again, was that just because of your background that's what you guys sort of leaned into and decided to focus on?

Russ Heddleston (23:17.580)
I think it's probably just because of our backgrounds.
It is worth noting that we did spend a period of time trying to do outbound sales.
And so we did hire up the whole STR team and do Outbound.
And there are a ton of lessons learned from that that we can get into if you want.

Omer (23:34.620)
Yeah, let's joke about that because I think that's pretty interesting.

Russ Heddleston (23:38.380)
Okay.
Yeah.
So I think for any founder, your investors are looking at you, hoping that you, you return the fund for them, that you're going to be a huge public company.
And so there's some conventional wisdom about how fast you have to be growing to get there.
And we weren't growing fast enough.
So we were told we need to find a way to grow faster.
And so we tried to do outbound sales.
And outbound sales does work, but it is really expensive, especially in San Francisco, to hire humans that are cold calling other companies at the same time.
We're also still doing the self serve stuff.
So I think for any early stage companies, it's really a mistake to try to do 2 go to market models at the same time.
You just got to pick one.
So because we were kind of split between the two, I think for a period of time, we didn't do either especially well.
And although we were closing 50 100k deals with outbound, it's just really expensive and there's a long payback period.
To that and it's very capital intensive.
So just look at box and how much they raised and how much dilution they gave up to get to where they are versus Dropbox and how much they raised and how much solution they gave to get where they are.
So outbound sales can be predictable if you do it well.
If anything's not working perfectly in outbound sales, it's really hard to troubleshoot.
Is it the product?
Is it the VP sales?
Is it the AES?
Is it customer success?
Like there's so many things that can break there.
Then in 2018 we decided to just go back and go all in on the self serve model.
And to be honest, it's made my life a ton easier since then.
Just having that focus, both for myself, for the company.
And it just makes it really clear like what we will and what we won't do.
And we still have a lot of enterprise customers, people with thousands of users on Docsend.
But those customers align philosophically with how we're building our product, which is for the end user.
We want to be the best in the world at what we do.
Now that means building for that end user, not necessarily the economic buyer.
So any economic buyer that's like, I want some AI driven dashboard or something, it's like, well, we could build that for you, but we're building for your end user.
So you're going to get better adoption, you're going to get better usage, you're going to get the value out of it.
But it's at the expense of some of these enterprise features that we know you want.
And that's kind of an uncomfortable situation to be in, but it does give us a lot of clarity and I do expect that we'll go back to enterprise in a couple years or at some point down the road.

Omer (26:00.400)
So how big a sales team did you build initially?

Russ Heddleston (26:03.600)
Oh, let's see.
I think we had a VP of sales and then we had four AES and we had six SDRs.

Omer (26:13.200)
So that was around 2016.
So you probably did that for like a couple of years.
And then when you said, okay, we're going to kind of basically sort of stop doing this, was this because, okay, it's really expensive trying to get these enterprise type customers doing it with outbound sales.
So let's try to reach those customers in a different way?
Or was this more of, okay, that's probably not the right market for us to focus on right now.
We're going to put our energy into a different segment.

Russ Heddleston (26:48.590)
Yeah, it's kind of Both, I mean, so our average cost of acquisition was about $19,000 per account and the average revenue per account was a little less than that because our win rate, not surprisingly was highest for smaller teams because the person buying software is sitting closer to the people using it.
And so having a multi year payback period is just a recipe for spending a ton of money.
So there was that also the market changed, so we were specifically targeting sales enablement and our biggest competitors in that category raised hundreds of millions of dollars in that like two year period.
So maybe just a little bit of bad timing.
And they're very enterprise focused.
And so our products are just really different but you can't use both of them, you only use one.
So I kind of looked at these things and then I just kind of looking at the self serve and what I did was well we as a team, we looked at who was using Docs and the most and who were the biggest advocates of it.
We also had this interesting thing that would happen where our support team would get requests from, you know, signups being like, are you the service that does blah blah blah.
And they'd be like, yep.
And then they would just sign up and start paying because our website just said sales enablement.
And in talking to a bunch of our customers and users who loved us the most, what we realized was like this is actually very horizontal.
Like we've been really focused on this one vertical.
But there are a lot of people who are using us in a lot of different ways.
Specifically like a lot of financial services people or bankers or investment bankers or CEOs or CFOs.
And so that's what like taking all that information into account, we redid our plans, pricing and positioning, but not our product.
In 2018 product the same, but just how we talk about it, we changed up and then that just started to take off.
I mean I definitely take it as a lesson that you know, at each stage of your company things that didn't work before might work now.
And it's always productive to be spending some amount of your time, one, talking to your customers, staying close to them and two, like being open to experimenting with, you know, your business model basically, especially if you're not necessarily, if you're not a better mousetrap company, you know, if you're, you know, kind of Reebok going after Nike, that's, that's fine.
You kind of know what the business model there.
For something like Docsend though, we're, we're trying to build a business in something that is not really a category.
So there, you know, we can look at, you know, Dropbox pricing or Google pricing, or we could also look at like Interlinks pricing or Diligent pricing.
And we're trying to thread the needle and create a category that's kind of all of these things bundled into one.
And so it's kind of unclear how to price that.
So I'm really happy we went through that exercise in 2018, and it's paid huge dividends for us ever since because again, our conversion rate went up significantly.
Like, I was talking to an investment banker and he was like, he's like, I love your service.
We all use your service all the time.
It's the only thing we use.
I was like, wow.
He's like, I can't believe I'm not paying you for it.
And as I looked into the system, I was like, oh, your secretary is paying $10 a month.
He's like, I said, we're not even paying for it.
And so we didn't increase pricing that much.
But, you know, it's 150 bucks a month for three seats on the advanced plan, which for this investment banker is still not very much money.
He doesn't care, but that's 15x as much.
And ironically, more people trusted us when we charged them more.
They're like, oh yeah, this is a real service.
Like, I'm actually paying for it.
So we were doing ourselves a real disservice by being so far off in our initial pricing.
A lot of our customers, to be fair though, are still very price sensitive.
So we still have that $10 price point there.
And I think of that as like a simple, easy to use send and track PDF.
And I think the Internet should just have that.
That should be a property of the Internet.
So we left that plan alone, but then we put in place a couple more expensive plans that actually are the main drivers of our growth today.

Omer (30:30.400)
So one of the challenges with going horizontal is that it becomes really difficult to appeal to everybody because you've got so many different segments of people, maybe different use cases.
And the risk is that your message can kind of get watered down.
That doesn't really appeal to anybody.
So how did you guys tackle that and if any lessons did you learn from sort of that horizontal focus?

Russ Heddleston (31:00.690)
Yeah, that's a great question.
The old joke is like, we're focused on 10 things.
So, you know, if you, you know, being a horizontal business, we can't do everything for everybody.
So we really focus on the external sending of documents like that.
So we constrained the workflows that we appeal to.
So our mission statement is to combine common workflows for sending documents externally into one intuitive solution, which in some ways is like a pretty narrow view of things.
But I'm like, we can be the best at that.
And then the challenge is, how do you represent that to a bunch of different Personas in a bunch of different industries?
And in talking to our customers, one of the things that kind of came across is that our brand promise is around control.
People really want control.
So we kind of have this lowest common denominator messaging on the website around that control.
And then we have broken out by Persona and by industry.
All the specifics and quotes and case studies for how different people use the software and get value.
Because as I mentioned earlier, some people value certain parts of what we do more than other parts.
So we have to tailor how we present that to them.
And there are other examples of this, like Vidyard is a good example, or lucidchart, where it is horizontal.
And if you go to the website, you'll see a bunch of different examples of how you can use them.
So you're like, oh, I'm in sales.
This is how I use your product.
Like, oh, I'm a cfo, so I use your product.
And that's been working pretty well for us.
We also use a piece of software called Mutiny that allows us to tailor the initial experience on our website based on the visitor.
So if we know enough about the person, we'll actually just tailor the marketing site to what we think is most likely to convert them best in terms of value proposition and how we talk about the software.
So that's also been a good optimization for us.

Omer (32:41.460)
What was that product called?

Russ Heddleston (32:42.580)
It's called Mutiny hq.

Omer (32:45.060)
Okay, I haven't seen that before.
Okay, good.
Also, you talked a little bit, you mentioned earlier about sort of selling to the buyer instead of the end user.
And obviously you learn some lessons from that in terms of what the buyer wants isn't necessarily what's right for the end user or the product that you're building.
Do you have any examples of how you learned that lesson?

Russ Heddleston (33:10.880)
Well, this kind of goes back to my time at Stanford studying computer science.
And I just remember I did a lot of internships, like interned at Microsoft, Microsoft interned at Trulia.
And I remember at the time, this is back in 2005, in the investing community, there's a lot of talk, or even amongst engineers about the consumerization of enterprise.
The question is, why is this enterprise software just so hard to actually Use and there was a theory that, oh, at some point usability will become more important.
Fast forward to today and I'd say still most enterprise software is just really annoying to use and so forth.
For me, it's just like I don't really want to be working.
I want to be proud of the product that I'm building and I'd like to be able to use that product myself.
And so that's why we've kind of made it a conscious decision to build for the end user and just make it a great experience for them.
And over time we kind of chip away at the enterprise features that we know we need like SSO or SAML or having user controls or teams of users and permissioning around that.
So we chip away at that over time.
But by staying true to that end user, that also gives us a pretty sustainable edge in the sense that we see virality, we see word of mouth growth, we even see really big deals walk in our front door where we'll be a CISO who using his personal account, his Gmail account will go sign up, play around with Docsend, have their team play around with Docsend and then come to us being like, okay, yeah, we're ready to buy.
That's very different than if we had a paywall or instead of talk to sales thing and it's like, oh my gosh, is this really any better than these other solutions that I've looked at?
I just really want to give it a try, kick the tires.
Also by keeping that kind of $10 a month plan, we do get more virality from that because we get about a million people a month visiting a Docsend link, which when you think about it, that's like a pretty good advertising channel.
Product tends to advertise itself and because it's so easy to get in and use it yourself, we see a lot of people coming in and trying it and be like, oh, I get it now.
And even if they themselves aren't a potential user, they'll often mention it to someone else as something they might want to use.

Omer (35:18.680)
Is that the main way that you're acquiring customers or traffic?

Russ Heddleston (35:24.440)
There are a few channels.
Like I mentioned before, the content marketing has worked really well for us.
So these reports that we put out, but that's still a minority of the traffic.
The number one channel is still direct people typing in docs and.
Com.
So one project we're doing this quarter is actually in our signup flow to ask people where they heard about us because interestingly, we've never asked them before, so I'll be curious to see what that shows.
But then after that, far distant second is just SEO.
And so we've done a good job ranking for various keywords that people might search for, and we get people in the product that way early on as well.
Answering questions on Quora, how do I Password protect a PDF?
The answer is DocSend.
And so that was actually a good way to bootstrap our SEO is to go through and answer a bunch of questions on Quora.
But surprisingly, by and large, it is word of mouth that still spreads our product.
This is just really surprising to me that we can get to this scale and still have that be such a big channel.

Omer (36:17.850)
And so that direct traffic is different to a user who might like, let's say I receive a DocSend link from somebody, I take a look at the document, and then maybe there's some link or mention there about, you know, trying DocSend and I click that and set up my own account.
Would that.
That's treated as a separate traffic?

Russ Heddleston (36:40.880)
That's treated as different.
Yeah, that's not.
That's not direct.
So.
So direct means that we actually have no prior record of having seen you before you hit our marketing site.

Omer (36:48.279)
Interesting.

Russ Heddleston (36:48.840)
So if you were, for instance, that if you clicked on a DocSend link and.
And then.
And then, you know, a month later come and sign up for DocSend, like, we would know.
We'd be like, oh, that, that's kind of that viral visit workflow.
So we track all that stuff.
So direct really just means you just typing it in.
If you come through SEO, like if Google is the referrer, when we see you, then we attribute it to that.
So we do track all these channels.
It's just the case that direct is the biggest one, which would also include, for instance, people who are turned on privacy.
And so they just do not track.
They would also look at like they're indirect.
But my understanding is that's a relatively small percent of people who fall into that.
Most of them, they just heard about us somewhere and they come check it out.

Omer (37:33.670)
I'd love to see those results when you get them.
I'm really curious about that.
I think this is interesting because that's a massive amount of traffic that's coming

Russ Heddleston (37:40.870)
through with me too.

Omer (37:42.870)
Yeah.

Russ Heddleston (37:43.350)
Okay.

Omer (37:44.390)
So the other thing I want, you know, you mentioned a few times about building a great product, and sometimes that can get misinterpreted as a really great designed product or, you know, or it could be loaded with features but what does building a great product mean to you?
Because I think it's so integral to everything that you guys have done and how you've been able to grow this business.

Russ Heddleston (38:17.620)
Yeah, because it can mean so many different things.
Right.
Is SAP a great product?
Like it's a huge company?
I think it's a great product.
It just means something very different.
Like that's not what we're building.
So for me, what I like about DocSend and products in general are ones that at first they don't make me feel dumb.
I get what they do, I can get in there and I can do something very easily.
So we try to make it as simple as possible to have someone send a link instead of an attachment and then get analytics on what's happening to that link and keep control of it and being able to update it, seeing where it's forwarded, that we try to make super easy.
That's really just a basic concept.
And like, okay, some people don't even look at the per page stats.
They just like the notification emails they get.
And like, that's fine.
If that's all you want, fine, we'll make it easy for you.
But then I like the fact that DocSend has some mastery within it.
If you want to keep digging, you can find subsequently more and more complicated workflows that you can accomplish in our solution and more nuanced things that you can do with it.
It reveals itself over time if you're looking for that.
This is also related to what I was talking about earlier with just unblocking users when they run into walls.
One of the things we found pretty early on is that some users were trying to send one link to a collection of documents.
And so what they would do is they would create a bunch of docs and links to different documents, they put those links into another document and they put that document back in DocSend and create a look to it.
We looked at our database and we're like, wow, a lot of people are doing that.
We're like, we should build that feature.
That feature is called spaces.
This is the ability to send one link to a collection of files or other things.
That is also our data room product.
It can be as simple as sending one link to three documents, or it can be organizing 500 documents in different subfolders and creating 10 different links.
And each different link has different properties and have different permissions and different visibility.
It can get really complicated.
You can dynamically watermark everything, have allow lists for who can access.
Gets complicated if you want to go that direction, but it doesn't need to.
That's one of the things I like about in my definition of great software, is that it's there if you want it, but it's not in the way of you doing something basic with it.
Ironically, Microsoft has a saying that if a user can't find a feature, it doesn't exist.
I'm like, there's so many features of Microsoft that I can't find.
You, having worked there, are aware of this too.
So, you know, in our mind, it's like it's fine if a user doesn't want to use a feature, but it's pretty easy for them to figure out what else they can do with it.
Yeah.

Omer (40:54.110)
So looking back over the last seven years or so while you've been working on this business, is there anything you wish you'd done differently or you sort of go back and tell yourself in 2013 or 2014?

Russ Heddleston (41:10.020)
Oh, man, there's so many things, I'm sure, like a lot of people, I feel like if I were to do it over again, I could do it in half the time.
But I would say what I mentioned earlier around trying to have two go to markets, I would strongly caution founders to not do that.
To be focused on what model is best for you.
If you're going to do enterprise sales, go all in on it.
If you're going to do self serve, go all in on it.
Know that self serve takes longer.
You know, enterprise sales is definitely the fastest way to get to 100 million in arrow.
So focus is underrated in my opinion.
There's also an element of patience.
So I think in earlier years I could have been more patient on some topics.
And then I also think team and culture.
Early on, I really beat myself up.
If we made a MIS hire or even we thought they'd be a good fit and they weren't a good fit.
And then we would try to make it work with the employee or the exec and invariably it wouldn't work out.
Either they'd leave or we'd let them go.
And then, you know, I think, man, I just wasted so many months on this, I probably could have done that faster.
So I've kind of learned to be nicer to myself if we make this hire.
And I've also just kind of expectations set with the team that, you know what, we're going to get it right more than we're going to get it wrong, hopefully with hiring, but we're still going to get it wrong sometimes.
And that's okay.
And we want to make sure that this is a really awesome place for everyone to work.
And part of that is make sure we have a good culture.
And part of having a great culture is making sure we have the right team.
And that means when there's a bad fit, we have to fix that.
That's also something I think we could have saved a lot of time with if we had taken that approach earlier.

Omer (42:41.910)
Yeah, some good thoughts there.
All right, we should wrap up and move on to the lightning round.
So I'm going to ask you seven quick fire questions.
Just try to answer them as quickly as you can.
Ready to go?

Russ Heddleston (42:55.910)
Okay.

Omer (42:56.870)
All right.
What's the best piece of business advice you've ever received?

Russ Heddleston (43:00.670)
Oh, no success in the boardroom will ever make up for a failure at home.

Omer (43:05.710)
What book would you recommend to our audience and why?

Russ Heddleston (43:09.470)
Thinking Fast and Slow by Daniel Kahneman.
Because it's just behavioral economics.
Just like understanding how people think about stuff, to me is just super interesting and really applicable across a lot of areas.

Omer (43:22.270)
What's one attribute or characteristic in your mind of a successful founder?

Russ Heddleston (43:26.630)
Perseverance.

Omer (43:29.350)
What's your favorite personal productivity tool or habit?

Russ Heddleston (43:32.390)
I mean, lately it's just been calendar.
I love not having to spend time scheduling things.

Omer (43:37.510)
What's a new or crazy business idea you'd love to pursue if you had the extra time?

Russ Heddleston (43:41.030)
Oh, man, I see a lot of these.
And just talking to various founders, I mean, I'd love to tackle some of the stuff in healthcare.
It's just really hard.
It's hard to fund, it's hard to do.
But there's some crazy ideas in healthcare that I think someone should do.

Omer (43:54.160)
What's an interesting or fun fact about you that most people don't know?

Russ Heddleston (43:57.280)
Probably that I grew up in South Dakota or that I like to go swimming in the ocean in San Francisco.
It's very cold.

Omer (44:06.160)
Why?

Russ Heddleston (44:07.520)
You gotta try it.
It's great.

Omer (44:10.080)
Yeah, sure.
And finally, what's one of your most important passions outside of your work?

Russ Heddleston (44:14.800)
Well, at the moment, I got a puppy this summer, so that's been a fun project to raise a dog.
So that.
Or probably just my wife, friends, family.
Just those.
Those personal relationships are really valuable to me.

Omer (44:27.110)
Ross, it's been a pleasure chatting with you.
I love your story, and I think it's.
It's really interesting what you guys have been able to accomplish with, you know, what is a relatively simple idea, but one you.
Once you peel back the layers, you realize how much of an opportunity there is and how much you can do.
And how much people still need help solving just this, being able to share documents more easily.
So thank you for taking the time and chatting and kind of sharing your experience and your insights.
If people want to find out more about DocSend, you can be one of those people that types in DocSend.com and if people want to get in touch with you, what's the best way for them to do that?

Russ Heddleston (45:11.850)
Just probably add me on LinkedIn.
I'm pretty responsive there.
Or follow me on Twitter rhettlestone.
Yeah, those are probably the two best ways.

Omer (45:19.730)
Cool.
We'll include links to those in the show Notes.
Thank you for making the time and I wish you and the team the best of success.

Russ Heddleston (45:28.210)
Thanks Omer.
Thanks for taking time as well.

Omer (45:30.290)
Cheers.

Russ Heddleston (45:31.410)
Cheers.