Omer (00:09.760)
Welcome to another episode of the SaaS Podcast.
I'm your host Omer Khan and this is a 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 Andrew Guthomsson, the co founder and Chief Revenue Officer at Circle, a platform for creators to build communities and memberships.
Andrew and his co founders spent five years as early employees at Teachable, where they saw firsthand how creators often struggle to build engaged communities.
So after Teachable's acquisition, they saw an opportunity to build a community first solution that was tailored to the needs of content creators.
The plan was to grow slowly, maybe even bootstrapping the business.
But when the pandemic hit in 2020, demand for online community tools exploded.
The founders raised a small seed round and worked tirelessly to spread the word, engaging with potential customers on social media and building a wait list for early adopters.
Andrew personally did over 1500 demos in the first 18 months and their efforts paid off as Circle skyrocketed to to the first million in ARR in just four months after launch.
But the journey wasn't without challenges.
The founders faced a major blow when an influential customer publicly shared his negative experience with Circle and why he moved to a different platform.
For Andrew, it felt like a punch in the gut.
He and his team had to swallow their pride, confront their shortcomings head on and work overtime to fix them.
Also, as they started bringing on enterprise customers, they struggled to adapt their approach to customer success and support.
Despite those challenges, the founders kept listening to their customers and quickly improving the product.
Fast forward to today.
Circle has over 10,000 customers, generates $19 million in ARR with a team of about 150 people, and has raised $30 million in funding.
In this episode, you'll learn how the founders built early traction by doing things that don't like jumping into Twitter threads and doing one on one onboarding calls while landing a few key anchor customers can create a halo effect for your brand and product.
We talk about how Circle aligned its pricing and packaging to grow with customers and maximize lifetime value.
What Andrew learned about building a sales team and go to market engine with no prior sales experience and how a product LED approach with a viral loop baked in propelled circle to $19 million in ARR.
So I hope you enjoy it.
Andy, welcome to the show.
Andrew Guttormsen (02:54.630)
Thanks Elmer.
I look forward to this.
Omer (02:56.870)
It's been a while.
We were just talking earlier before we started recording and I was like I don't know why I haven't done this sooner.
Like, you and I have known each other since probably the very early days when you guys were starting Circle.
So it's been great to see that journey and finally kind of get you on the show.
But first I have to always ask, do you have a favorite quote, something that inspires or motivates you that you can share with us?
Andrew Guttormsen (03:25.450)
There are two that come to mind.
So one of them is a friend of mine, Brendan Burchard.
He has this quote which is who, like, you gotta like, figure out, like, who's the person, who's the person that like really needs you to be at your best today, Which I think is like, there's always a good one.
Like whenever I'm like having a day or there's like a challenge or whatever it is, I think about, I think about that quote.
By the way, the other one, Scott Belsky shared this.
But whenever you need to make some hard decisions, I don't know if you can read that.
Dyfj, do your effing job.
That also is a helpful one.
Post it up there.
Love it.
Omer (04:10.380)
Awesome.
So for people who aren't familiar, tell us about Circle.
What does the product do, who's it for, and what's the main problem you're helping to solve?
Andrew Guttormsen (04:19.260)
So Circle is really like the easiest way to create a home for your community, your people.
So you can do your live streams there, you can do your like real time chats, you can bring people together, you can host courses, have like member directory, private messaging, you know, drop into like a, like a video call room.
But people that, you know, tend to use Circle are creating membership experiences and, you know, it might be somebody who's got a small backyard gardening community, brings, you know, 100 people together up to.
It could be a company like Adobe or it could be Oprah or somebody, you know, really big and everything in between.
You have about, you know, 10,000 customers and it spans all sorts of different types of communities.
Omer (05:05.040)
Is Oprah using Circle?
Andrew Guttormsen (05:06.800)
She's about to be, yeah, she just, she just became a customer.
Not, you know, Oprah is not the one signing the contracts.
It's her team.
But yeah.
Wow.
Omer (05:16.720)
Give us a sense of the size of the business.
Where are you in terms of revenue, customers, size of team?
Andrew Guttormsen (05:23.120)
Yeah, so, you know, we're about 150 people today.
We are about $19 million in ARR right now.
And so, you know, we're growing quickly.
We, last year we grew from about 8 million to 16 million.
So we a little bit more than, than doubled and yeah, you know, things are, things are good.
You know, we're about four years into it at this point.
So, you know, it really was about March 2020 when we started working on the product.
And then from there we launched after being in a six month wait list, kind of like private beta period to the public in that summer.
Omer (06:09.300)
And you guys have raised about 30 million to date.
And in terms of customers, you think you might actually hit a big milestone today, right?
Andrew Guttormsen (06:23.260)
You know, it's 4:00pm New York time right now.
I think by midnight tonight we will officially Bring on our 10,000th customer today.
Omer (06:34.940)
10,000 paying customer.
Andrew Guttormsen (06:36.700)
Yes.
Omer (06:37.260)
That's amazing.
That is awesome.
Great.
So let's talk about how this all started.
Early 2020 is really when you guys kind of got the show on the road.
What were you doing before that and where did the idea come from?
Andrew Guttormsen (06:59.390)
It's funny, we, you know, really technically started Circle in March of 2020, right when the pandemic was happening and all of that.
But before that, my co founder, Sid and I, we spent and I have another co founder, Rudy as well.
But Sid and I, we were at a company called Teachable for almost five years, right?
And Teachable's a course platform.
And so, you know, we were there.
Sid was the third employee, I was the seventh employee.
He was the ultimately like the VP of product there and I was the VP of growth marketing.
And so, you know, we, the whole time, you know, I think we just really respected each other.
We had very complimentary skill sets.
Sid eventually left Teachable about a year before I did and I was still there.
And then ultimately Teachable was sold.
So Teachable was acquired by a company called hotmart.
You know, really good outcome for Teachable and really great people at.
Teachable is one of the best times in my career.
I learned so much there.
But then after, you know, Teachable was sold, you know, there was this.
I was trying to figure out what's going to happen next, you know, from here.
And so, you know, at the time, you know, it's like you start to become really close to the markets that you serve.
So I really understood course creators and just creators in general and how they thought, what they needed.
One of the things that I saw at the time and I, Sid, I know, saw as well, but it was also, frankly, I think kind of obvious is a lot of the best course creators, they were having these like slack groups or they were earning a lot of money.
Well, why were they earning a lot of money?
Well, they had these premium offerings because they had These Facebook groups alongside them.
And so there was a lot of the best creators using these community experiences and there was no product to actually do it in this holistic way.
And so we thought, what if we start a business here?
And so I had just left Teachable and Sid had been know, doing his own kind of thing, exploring for like a year, just building products and stuff like that.
He was actually at Gumroad for a bit and then we're just like, let's start a business around it.
Let's build the product.
Omer (09:12.820)
And did you guys, at what point did you raise money and did you kind of bootstrap initially?
Like what was the process you went through to kind of get started five
Andrew Guttormsen (09:23.540)
years in at Teachable we were really tired and actually we had no interest in raising money.
Like we were, we were ready to, we were, we were so excited.
We're like, we're gonna do slow growth.
We're just gonna maybe bootstrap this thing.
It'll be me, Sid and Rudy.
We'll have a little three person company, we'll go really slow.
Then Covid happened and all of a sudden there's also just pull in the market from people wanting that type of product.
So we were starting to kind of get pulled into the market.
Actually, you know my close friend from Teachable who was the CEO and founder of Teachable Encore, Nagpal, you know him and I sat down, I getting lunch and I remember, you know, walking him through, you know, hey, I'm gonna going to leave Teachable or think about starting this business and all of that.
And so he's the one who kind of said, well first of all, I'll, I'll invest, right?
I'd love to invest.
Have you guys thought about investing?
And we didn't really want to, but then he was like, I can line up the investors.
And so we did raise, you know, a small round, relatively speaking.
It was about $700,000, right.
And then from there we decided to raise another round a few months later because things were really taking off.
Remember we went from zero to about a million in ARR in like four months.
And so there was a lot of investor interest.
It was also pretty frothy time in the market when, you know, we're talking 2020.
Our product was a community product.
And because of the, I think like the small reputation we had just from the success at Teachable, it was easier to have those conversations and there was, there was interest there.
And so we did end up raising a $4 million seed round, kind of like a Big seed round.
And then eventually we did raise.
Two years later, we raised a $25 million rap.
Omer (11:17.280)
So let's talk about those early days.
So you guys decide you want to build this new company.
Initially you're thinking about slow growth.
How long did it take to build that first version of the product?
And you'd seen the opportunity, but what did you do to validate this idea?
Like, did you do the lean startup thing and start trying to interview customers?
Did you put up a landing page?
What were you doing to.
To kind of help you, you know, be confident that you were going in the right direction, building the right thing?
Andrew Guttormsen (11:58.450)
You know, it was, it was pretty organic early on, because at the time we'd worked with tens of thousands, literally tens of thousands of course creators.
We knew course creation that space so well, we knew how, what the folks needed.
But yeah, we just had friends in the space.
And so look, here's what we're thinking.
A lot of people say that when you create a new product, it needs to be like 10 times better than whatever the existing product was.
In our experience, it was not that we knew actually, like, if we could just make that thing, like 10% better and that thing 10% better, like, that would be a huge win for our folks.
And so we wanted to kind of de risk.
And what we did is we said to certain customers, like, look, you're already using a Facebook group and a Slack group.
You're already creating courses.
What if you just had it as a little bit of a better experience or as we're holistic and we got rid of some of the pain points that come with having a separate community experience that's different from your course.
We didn't say, like, we're going to go out and invent some brand new concept.
And so that really helped.
And so we went to these customers who we understood we had relationships with.
We had to like five of them, 10 of them, and we just kind of showed them some designs.
And then to Sid and Rudy's credit, because I'm not the technical person on the team, like they were building the actual product, they would have that conversation, the next day, they would go and they would build that in and they send that person an email and be like, hey, what do you think?
Was this what you were talking about?
And, and that feedback loop was really important.
Omer (13:35.120)
Love it.
Now, just one clarification.
When you said, like, you know, bringing it all together for these course creators, in the early days, you didn't set out to build Circle as a platform for your Online courses.
Right.
This was primarily a community platform that was integrating with other products in a more seamless way.
So, you know, people could use, still use Teachable along with Circle, as opposed to you taking Ankara's money and all these other people and then building a competitor to Teachable.
Right.
That's, that's.
Andrew Guttormsen (14:14.830)
Yeah.
So we, we really didn't.
We were pretty tired of the course space.
So, you know, we didn't want to go back.
We didn't want to be building courses and doing all of that.
We wanted to create what would be more similar and we did create what would be more similar to like essentially like a white label Facebook group or a little bit more of a Slack experience that you could though take and add into any course platform or website.
So we would just kind of create the community experience.
By the way, that's for the first few years of Circle, up until about maybe almost two years ago, maybe less than that, we didn't have a course feature.
Right.
So it was just a community piece.
Omer (14:57.920)
Okay, so I don't want to skip over what you said a little earlier, that you went from zero to the first million in ARR in four months.
A lot of people listening to this will be thinking, crap, I can't get to zero to first 10 customers in four months and these guys hit a million.
So walk us through how that happened and more importantly, what were you doing before the four month started to hit the ground running once you had the product out there?
Andrew Guttormsen (15:40.480)
So I think that's the key that you just had, which is like, what were you doing before that?
And I think I want to paint a really clear picture here and clarify.
So we went from zero to a million in the four months when we launched publicly that anybody could come and become a customer of Circle.
But before that we built up a ton of demands.
We had a ton of pent up demand from like the six months before that.
And so very tactically, here's what we did, which I think worked really well.
So we created a very simple landing page.
And what we didn't want to do is just let anybody come and sign up because we were taking a ton of feedback from people.
You know, every single customer that came through that was using the product.
I literally reviewed every single email.
And if, you know, it was a big name, I would reach out to them, get in touch with them.
But regardless, you had to come, you had to enter your email, you had to answer a couple of questions.
Then once you did that, we would.
And we would say, circle is X.
You Know, number of dollars are you, do you still want to like get access to Circle?
And then they would fill it out.
It would come literally directly to my email inbox.
I would then look up, who is this person?
Do they seem like a legit, you know, good, like a customer who would actually get value from the product that we're building.
Then I would send them an email within minutes and I would actually type it out.
I didn't like copy and paste.
I literally type it out every single time.
Personalized email.
And then I would say, hey, I saw that, you know, you're able to first of all, like interested in Circle, interested in the product, able to pay if you're open to it.
I'd love to show you the product.
Right.
Because this was just like a demo kind of like wait list.
And so then I would, if they, they would reply and again, I'd say it's $39 a month, which not very much money obviously, but do you want a demo?
Then we'd hop on a call, I'd give them a demo, I'd show them the product, and at the end of the call I'd say, if this seems like something that you want, I would be happy to set up your account for you.
Here's a link to go pay.
And that would be it.
And I would just do like 10 of those calls a day.
And so the question then becomes like, well, how are we getting that much demand?
How are we getting that many people to come through?
And what we did there was, well, first of all, just gotta be realistic here.
Like, there's huge tailwinds in terms of like the market Covid was happening, people were moving online.
Community was big already, the creator space, big market.
And but what we did though was that we really tried to be in the conversation.
So we would go and we would talk with like 5 or 10 kind of anchor customers, right?
So we would use our connections that we had.
It'd be somebody more influential who we knew would be like the perfect customer to be like a Pat Flynn from Smart Passive Income eventually with Brendan Burchard, you know, from Growth Day in those early days, and three time best selling author.
It was a lot of people who we knew if they used us, all of their customers would get exposed to Circle.
All of their customers could be potential customers of Circle.
And so then there'd be like Twitter conversation.
What community platform are you using?
We'd go in there and our whole team would reply to every single thread.
Five of us would be in there and we would Just do that all day long.
And it would drive real traffic to our homepage and word of mouth.
Omer (19:17.200)
Wait, so what were you replying to on Twitter?
Andrew Guttormsen (19:20.050)
So there'd be like a thread.
It would be, somebody would say, hey, what community platform are you using?
And there'd be sometimes 50 people in there with discord Facebook groups.
And you would go in and say, circle, by the way.
And we tag like, we have 10 customers.
We would tag like two of them that we knew would say really nice things about us today and happen to be active on Twitter.
And then they would do that.
Then people would come and they'd see that, and then they would check out our waitlist page.
They'd fill out the little form.
All we had is like a picture on there kind of describing what it did.
Omer (19:51.300)
Okay, so go back to that, that, the wait list.
So you are, you're basically finding where people are having conversations online about community platforms.
All of you guys are, you know, kind of mentioning circle and just getting it on the radar.
You're doing those kinds of things to drive people to your waitlist form.
They fill out the information.
You're using that information to basically qualify them both in terms of whether they're good fit, are they willing to pay this much, and then a subsection of those that you think are probably the strongest fit, you're reaching out to them, personal email, not automated reply.
And then you're scheduling one on one demos with these people.
I think a lot of people listening to this will be like, okay, I get it.
That doesn't sound that hard.
I could do it.
One of the differences with what you guys were able to do was the amount of effort you were willing to put in to, to make this thing happen.
And I want to, I think the best way to explain that to people maybe just so they can understand that, is just tell us how many demos roughly did you do in the first year?
One on one demos with people?
Andrew Guttormsen (21:21.920)
About 1500 demos.
Omer (21:23.920)
Which is like basically spending all your day, every day doing a lot of demos.
Andrew Guttormsen (21:30.000)
Yeah, and actually it was about a year and a half.
Um, and I, I really, I want to emphasize this point because like, if you had to ask me what, obviously there's a lot of things that got Circle off the ground in the early days on the product side, on the go to market side.
What I had the most control over, the thing that truly made a big difference that is not obvious at all to any outside onlooker, is that we had great word of mouth.
But why did we have great Word of mouth is because somebody would come in interested, they would get a one on one demo with me for 30 minutes or 45 minutes.
I would do eight or 10 of them a day.
And so then they've had an experience like literally with the people building the product.
And so it's just such a great way to get introduced to a company, to a product, to a business.
And then all of them would be like, wow, I'm literally talking to the team that's building this for me.
I had a great experience on that 30 or 45 minute call.
And then again, we go back to like Twitter or social or whatever.
They would be singing our praises because they had a great experience and they know us.
So they kind of like knew the people behind the product and the business and they were rooting for us.
So all of a sudden you do eight or 10 of those today, and then the rest of the week I just did 40 conversations with amazing people building communities this week.
And, and so we, that would really help with that word of mouth, the virality, the conversation, the introductions, referrals, all of that.
It was like a big snowball.
Omer (23:03.920)
Yeah.
And I think it was around that time that you and I first met and, you know, I was instantly sold as a customer.
Anyway, my only regret from back then is I didn't find a way to invest in the company as well because that would have probably been a good thing to do.
But yeah, I just, it was like, yeah, these guys are onto something special here.
And like, I had no idea where I was going, but it was just, there was, there was just this, this energy behind it and a very clear vision.
You know, it wasn't like, oh, we're trying to build this and this and it's going to do this and whatever.
It was just very clearly people don't have this.
This is what they're currently doing and we think we can build a better experience.
And it wasn't hard to understand.
Right.
And then when you see what you guys are building, it was like, yeah, I think there is something, something potentially special here.
So let's talk about the inflow piece, influencer piece.
So you talked about Pat Flynn and Brendan Burchard and you said, you know, we used our contacts to go in, get, you know, meetings with these people.
That's great because I mean, you can use, you can use your relationships and it's smart to do that, to get your foot in the door to talk to these types of people.
But I'm sure that, you know, Pat is getting pitched on Hundreds of products, you know, left, right and center.
Any opportunity people get.
So your relationships get you, you know, some time.
But how did you.
What did you do differently for people like that to get interested enough to want to be part of what you were doing?
Andrew Guttormsen (24:52.460)
The thing that makes it less overwhelming is you actually probably only need like two, maybe three, maybe one anchor customer, right?
So let's imagine if I was starting any software company from scratch.
I need to go out and get my first hundred customers.
Let's say I was able to get my first five.
Just regular old customers who are going to get value.
Not influencer, just anybody who can pay me.
I got five, ten of those.
But now I'm trying to think, how am I to get to 500?
I would go and I would find somebody who my product is absolutely perfect for, and I would bring them in and incentivize them to help promote it.
And that's what we did.
And so, you know, the thing with Pat Flynn.
So Pat, we made patent advisor, and that comes with, you know, a small amount, relatively, at the time, seemed small amount of equity, but now, you know, very valuable equity.
And.
But the thing is, we didn't just pitch Pat on the product because, hey, yeah, you should be an advisor.
It was like, truly the exact product that Pat needed more than any other product on the planet.
He needed that product.
And we knew that.
So we didn't say, oh, let's go to Pat, because we have a relationship with Pat.
We went to Pat because we knew this is exactly for him.
It would be perfect for him.
It'll make his life so much better.
We're uniquely qualified to deliver it to Pat and we have a relationship with pat.
There's probably 500 people that we could say, hey, this is actually, like, kind of perfect for their business.
But there were only a handful, you know, maybe 10 or 20 that we thought were really great that could be that partner.
And, like, really only a handful that were.
We were close enough with.
So we just cut an equity deal.
Like, he got a small amount of equity, Advisor equity.
We built the product for him, but with him, we took a ton of his feedback.
And that's what I would do.
Like, I would do that.
I'd figure out if I started a software company, like, who are those people, you know, in my space?
Omer (26:58.690)
Right?
So that's.
That gives you some social proof.
These people, you know, are involved and did that, like, how successful would you describe those initial, like, influences?
Did it lead to, you know, a bunch of people that in their communities, like, Wanting to get on board and drive more demand for Circle, or was it more like, yeah, it's kind of opening doors, but it's not like, you know, the floodgates just open.
Like, what was that experience like once you had these people on?
Andrew Guttormsen (27:33.120)
It was transformational.
And, and that's the thing is like a lot of people, I, we had a very clear path to like what 30 or $50,000 in MRR was going to be within a few months.
Like, we knew the playbook before we even started the company.
We were like, we wrote it down.
Here's what we're going to do.
If we could just build a product, this is how we're going to market.
And what we figured out is we're like, all right, we want to get to 500 employees, 500 customers.
So we go to somebody like Pat and we're very transparent with Pat about our goals.
Look, we're coming from a good place.
We want to partner with you.
We want to build an amazing product and we think it'll be better if you do it, but very tactically.
So, like, I know that if we do a JV webinar with Pat where we come into his audience, we teach, he announces it to his audience, I think that alone drove 300 customers right there for us.
Just one webinar, Teach, you know, have hundreds of people live or a thousand people live, then follow up, you know, you know, over email, say, hey, come join Circle.
Pat also tells his story of how he's using Circle.
Create like a little mini course and some training content around it that was very like, timely for his audience that was just going to be joining Circle.
That's a few hundred customers right there.
And then, you know, create some co branded content and things like that.
And then by the way, because we have Pat, and to his credit, Matt and Pat are the two business partners there, they said, look, we're going to push the boundaries of Circle and your product and we're going to make you better.
And you know, so that's what happened.
And then every single sales call we have would say, by the way, here's like, what the best version of this could look like.
And we showed them the SPI community, so it helps us close all the other deals that are coming in.
So we're getting the word of mouth.
And by the way, Pat, his customers are also good customers of Circle, right?
So like the members of his own community.
So with somebody that you're partnering with, there's.
Will they help you close more of your existing pipeline?
That's coming in.
Will they help you drive new opportunities that are coming in?
Will they help you even make your product better?
Because they're super users of it?
That's three key things.
And Matt and Pat were all three of those.
And so if you can create a list of 10 of those types of people, the path to getting your first 500 customers, as long as, if your product is strong, that path is very clear.
Like how you get there, you just do a bunch of these collaborations and you really invest deeply in the select few versus going super wide.
Omer (30:13.510)
Love it.
I think there are some great lessons and insights.
In many ways, it's a good case study on how to do influencer marketing or even just generally partnerships.
And I love that you kind of made it real by saying it doesn't have to be hundreds of these people that you go and find.
You just need a couple, a few just to get things moving right.
And it's just being smart about, thinking about who those people are and then trying to build those relationships.
And then in an ideal world, it would be like once you set out to build the product, like, stop finding those people and building those relationships before you've done anything else.
Right.
Because six months down the line or whatever, it's going to be a much better, easier conversation than reaching out to them for the first time when the product is done and you're like, they're now trying to sell it and everything.
So I think great, great, great lessons there.
At the same time, there were also situations where working with these types of influencers didn't work out.
And there are a couple of examples that you shared with me.
You don't want to mention names.
It's fine.
I don't think we don't have to do that.
But tell me about what happened and generally why it didn't work out with everybody.
Andrew Guttormsen (31:46.460)
You know, the first thing is it's pretty high stakes, right?
Like, we are not selling a toaster oven.
We're.
We're selling your community platform.
For a lot of people, they're running their entire business on circle.
And so, like our team, we take it as a big responsibility because it really is.
And so the, you know, there have, there have been moments we talk about 1500 demos.
Like, I, I know these people who are coming in and becoming customers.
I ask them all the questions and then I make a recommendation to them.
Sometimes I tell them, don't use circle.
But other times, you know, I do.
And so, you know, when they come over, I always have to keep myself honest and, and Know, like, are they going to do well on Circle?
And now there's a lot of things that can go wrong.
But we talked earlier about, you know, being in the conversation and being very, like, up close and personal with, like, the real people who are using the product on places like Twitter and social, all of that.
And so, like, that's, you know, playing on the.
The knife's edge, right?
Because, like, it can go in your favor very publicly when people are talking, you know, great about you.
They're having great experiences.
But what if somebody doesn't have a good experience?
And so I can remember one time, and it was right when.
It was right when Circle was like, really starting to take off and get more attention at the time.
And back, back then, you know, we had just got.
There's a very high profile kind of influencer who signed up for Circle, moved their community over to Circle, and they had like a slack group.
And the slack group is like, very active, and people loved it.
But the, the guy running it, he hated it because it was just madness.
Couldn't, couldn't control it.
And Circle's known for having really calm communities.
So moves it over, you know, makes a nice announcement about, oh, I'm moving over to Circle.
And by the way, that's what we love, because everybody talks about, you know, the move and people see that, and that's what creates that brand, the reputation.
You know, your brand is your reputation, and, and the reputation helps.
So all of that's great, but you really have to deliver.
And what happens if somebody fails?
What happens if people come over and their members have a worse experience or the community becomes a ghost town or something happens where, like when they do the migration, there's some technical issue or whatever it is.
There's a million things that can go wrong when we're talking about something as dynamic as a community.
And so I remember one time, all of a sudden, I wake up, you know, in the morning, I have a text on my phone from Sid, and it was my co founder, Sid, and it was just he.
It was yikes.
And then a link to Twitter.
And by the way, I get those all the time.
Normally we're just.
This is some random Twitter thing or, you know, it has nothing to do with us.
And it was a long link to a blog post about why I'm moving off of Circle and how bad of a decision it was for me to make that move.
And that was, you know, that was really painful because actually I was a huge fan of that person.
Like, the work that they did.
Right.
And so, you know, then you have to kind of like dig down and really be honest with yourself.
Like where, where are the valid points here?
And like, how can we learn from this to make the product better?
You got to take that stuff, you know, really seriously.
And we do to, to add on to it.
I remember, you know, one of my.
I don't know him personally at all, but somebody who I've always been a fan of is Gary Tan.
Now he's the president of Y Combinator.
I remember one time somebody, I think he, I've followed him on Twitter forever and I always like consuming his stuff.
But I remember one time he writes, he took a screenshot.
It was a screenshot and it said something along the lines of like, I never understand why people do this or whatever.
And it was referring to, it was a screenshot of our product and like some product design decision or something like that.
But I was just like, man, Gary Tan doesn't, is not a fan of the, of the product today.
And like, you know, that stuff is not a big deal in the grand, grand scheme of things, but it's like they're very out there.
When you build a product for people, especially when you build a product that's, you know, serving SMBs and, and a lot of people, there's a lot that can go wrong.
And so it's a two way street
Omer (36:19.740)
in terms of that first person and realizing that they were moving off and not only they were moving, but they had told the world about how much your product sucked and they were moving.
How did that feel?
You used a term that you said, tell me what it felt like.
Andrew Guttormsen (36:38.460)
Yeah, so it's a, it's a punch in the gut, right?
Like the feeling that, that you get.
There's a couple feelings that come over you.
So, you know, the first one is you let this person down and they're.
Because their business, you know, again, business relies on circle.
The other one is, you know, where my head always goes is also the team, like our team state take it very seriously too.
So I know if I'm feeling something, they'll feel it too.
And then the other thing is like, we gotta learn from this.
Like if somebody else had this experience, if this person had this experience, like who else is having this experience or about to have this experience?
Yeah, but so yeah, it's deflating in that moment.
Very, you know.
Deflating.
Omer (37:33.820)
Yeah.
You start thinking who else is writing a blog post at this moment that's going to go out tomorrow or next week or something?
Andrew Guttormsen (37:42.220)
Yeah, exactly.
Omer (37:43.740)
And I think Gary Tan, it was probably like, for him it was probably like nothing, right?
It was just a tiny comment on some random thing.
But it's like someone once described to me, when you're a leader or someone in a position of influence, like you like these cogwheels that are connected, right?
And you're like this big cogwheel and you turn like, you know, one degree, but the knock on effect is that there's a tiny cogwheel somewhere which is kind of spinning because of what you just did, right?
And it feels like that where it's like, wasn't a big deal, right?
But, but you're probably like, what the hell, right?
This, this is, you know, it's, it's.
And I think you had a fair amount of customers at that time and it's still like that's the one thing, you know, you can't help but focus on.
Andrew Guttormsen (38:30.880)
And look and I'm sure like, actually I think Gary Tan was probably right.
It was probably like some, you know, crappy design decision or something like that.
So it's totally right.
Yeah.
And it's, it's just part of it though.
And I think, you know, more so to Sid and Rudy, my co founder, to their credit, like we are upfront and personal on calls with customers every single day.
And so, you know, we know what people's experiences are to the good and the bad.
We know all of it.
And you kind of just have to address it head on because otherwise the product is not going to be good enough.
Customers aren't going to get on value, they're going to churn.
And what are we, what are we all doing doing this for?
It's easier now to have the hard conversation up front and solve the actual problems than to like wait and let it stack up and have to deal with like 10 hard conversations later.
Omer (39:32.130)
All right, let's, let's talk about growth beyond the first million.
So when we think about like getting to like the first 5 million in ARR, I think you guys started to get a rhythm.
You started to get more methodical about the way that you were growing.
You started to get really good at forecasting your growth.
And tell me just a little bit about what that was, how you got to that point.
And then we'll go on to the whole lack of sales experience and what
Andrew Guttormsen (40:13.580)
you did with that thing about our software company specifically is that we do have a self serve motion.
Most people who come in, they create a free trial and then they convert.
And so for us, our business has been Pretty predictable since the early days.
But for me, I really like to feel like I'm in control.
I hate not knowing where the revenue is going to come from, what our growth is going to look like.
And I have other leaders on our go to market leadership team who I think it's a good thing.
They all feel the same exact way.
They're all, they really want to know that they're in control.
So for us, you know, what we do is we actually have like a weekly revenue meeting every single week.
We've had this since probably about a million or so in arrival, where we look at our full funnel.
How is our pipeline doing?
Are our leads closing?
How much time is it of those leads who come in and convert?
Are those customers getting value?
How many of them are expanding their accounts?
We look at the different initiatives that we're doing and are they all on track?
If there's anything that's off that's going to drive revenue like three months from now, we want to know asap.
And so we just copied Amazon's weekly business review, which is essentially the whole point of the meeting.
You can just Google it, Amazon Weekly Business Review and you'll see how they run it.
But essentially the whole purpose of the meeting is to figure out are we on track to hit our revenue targets or not.
And if we're not, each functional leader should be able to say, my area, just business as usual.
Things are good, we don't have to talk about it.
But if things are off in my functional area, I need to know why they're off.
I need to identify why they're off.
And I need to so go through the diagnosis.
And then I also need to basically say, hey, here's how I think we're going to fix it.
I need to come to that meeting prepared.
So we do that just to feel like we're always in control, we're always ahead, we're never surprised if we're tracking to miss a number.
But the channels, you know, word of mouth is really key for us.
It was since day one.
We have a product where people create the product and then they have members who get exposed to our product.
So there's actually a little bit of some virality there, a little bit of a loop.
We call it word of mouth, but the product helps with that.
And so our product actually like we're a product led company, so our product actually drives a ton of our growth, which is great.
Omer (42:57.430)
Yeah, that's awesome.
So you know, typically when you look at a company of this size and you know, chief revenue officer.
Not always, but mostly, you know, I've seen they tend to come from a sales background, although, you know, your role is much broader than that.
How much sales experience did you have
Andrew Guttormsen (43:18.650)
coming into this, the chief revenue officer role?
I would say like a third of the time.
It's like a marketing leader.
Maybe two thirds of the time.
It's like a sales leader typically oversees sales, marketing, customer success, rev ops, Sometimes it's like a very sales oriented company.
It's literally just like a sales role, right?
So I had no formal, formal like sales or management experience.
I even at teachable my role there, I was the VP of marketing and growth and oversaw the marketing side of the house.
We didn't even have a sales team there.
It was all self serve, right?
So what I did was I got real and I was like, I'm gonna have to hire a coach and figure this out because I didn't know what to do.
But I knew that I didn't know enough.
I was doing all the sales and frankly, after 1500 demos, I was kind of tired of it.
I wanted to go out and hire a couple of people, but I wanted to get it right.
And you know, I had made mistakes in the past actually hiring salespeople and I didn't want to repeat those mistakes.
And so I went out, I found a coach who was actually, it was actually a customer of ours who ran a community called SDR Nation for SDRs.
And he had previously been a VP of Sales, actually multiple times.
And so we just, you know, had a conversation, hit it off and I was like, hey, like, I know you're doing coaching, I'd love to hire you.
Like let's eight hours, let's just do eight hours together, see how that goes.
And then he became my coach kind of longer term.
And I realized the more I talked with him, how little I knew about properly running a sales team.
And so I was like, wow, I can't imagine not having a sales leader and his name is Charlie, like Charlie and so put up a jd and at the same time I sent him an email and I was like, look, we're gonna have this role and I really think you'd be a great fit for it.
He basically said no.
And then, you know, I tried to convince him more, you know, over the couple of weeks he was actually already working on another venture, exploring something else that he was gonna take on.
And so, you know, eventually I just wrote him a really long email trying to convince him to join the team.
And it still seemed like it could go either way.
I found out later.
So he flew in a week later.
We were gonna cut, go through.
All right, how would you come in?
What would you do?
He was going to test out.
Would he like working with me?
So we go to this, we work, we hop in a room, carve out like three or four hours together, go through.
He comes super well prepared.
Tons of questions around the business thinking about how he would start things up.
I left that meeting just being like, man, we have to get Charlie, we gotta get Charlie.
And it turns out he left his house a day before that.
And his wife said, you gotta go get this job.
You have to join circle.
And so we were both trying to convince each other to start, to start this kind of like relationship, you know, together where he'd come on and we landed Charlie and so he's been great.
Now he runs our sales team.
But it's a 20 person team now and he's just getting started.
Omer (46:42.740)
Love it.
It's a great story.
We're going to have to wrap up in a minute.
Just briefly, tell me like you said you were at about 19 million in ARR.
Last year you were at about 8 million.
What's driven this dramatic growth?
And I think you mentioned that it was mostly expansion revenue.
But just give us, give us a sense of like the kinds of things that you've been doing to drive that kind of growth in a relatively short period of time.
Andrew Guttormsen (47:24.430)
So I think when you want to grow, you know, at a venture scale rate, and we'll say it like this stage, we'll say, you know, it could be 70%, it could be 100% plus 150%.
Right.
You know, for us we wanted to double last year 100%.
When you want to grow that rate, you got to do multiple things.
So like you need to acquire new customers.
So like your gross, like new business bookings, that revenue, right?
So new customers, you need to be growing, but then also there's expansion, right?
And so you also need to expand the accounts of the folks that you're bringing in by delivering more value to them.
So we've done like a lot of pricing and packaging, you know, where we ship a lot of new product improvements that people can get more value from, which increases size of their accounts.
And the other things you need to retain customers, you know, you have lower churn and you know, you don't decrease churn overnight.
It just has to kind of like you need to be constantly acquiring the right kind of customers, building a really great product, delivering more value and Then over time you can see the churn slowly come down.
Right.
But ultimately with expansion and then gross churn.
If you kind of like put those together.
Like we really spend a lot of time thinking about net revenue retention and how can we increase net revenue retention.
If you look at all of the companies that become really big in software serving our types of customers, there's very few that serve very small customers like the way that we do so very.
So we spent a lot of time thinking about net revenue retention, how to increase it, how to get as close as we can to 100% NRR.
And to do that we've also made some like pretty big product investments.
So we rolled out this big workflows product which is an extra product you can add to your account.
You know, on Circle we've rolled out a mid market product.
You know, normally the average customer on Circle used to pay us $150 a month or $100 a month.
And then we added a $30,000 a year.
Your own branded apps do all of it.
Like just on Circle is $30,000 a year.
And so that really helped to us, you grow the new business number, expand our accounts that wanted to go from paying US$200 a month, you know, for their core experience having full branded apps, $30,000 a year.
Like so there's a lot like all of they kind of stack and add up to help.
Maybe instead of growing 50% naturally, if you didn't do all the stuff, add those things in, grow a hundred percent, you know, so it's more.
So like how can, what can you do to just grow marginally, incrementally faster than the growth rate you would have otherwise, just naturally without doing those things.
Omer (50:17.340)
Yeah, yeah, I know that you now you even have an enterprise plan and you're, you know, a lot of the times I see you get SaaS, companies that start to go up market, they go for these bigger customers.
It's a tough thing to do to serve enterprise customers and the smaller customers.
So like where are you guys headed and how do you, how do you kind of balance that?
Andrew Guttormsen (50:53.080)
So the truth is a lot of the people that are buying our, what we call our mid market plan.
Yeah.
Which is a whole different price point.
They actually tend to be the same type of ICP as the smaller creators.
Right.
So like a lot of times the person that's buying just normal circle plan is like a creator and they're, you know, pretty successful and all of that.
The people who buy the branded app experience where it's all their brand, nothing related to Circle.
A lot of times they're just that original person who's a few years ahead who's doing $500,000 in revenue or $5 million in revenue.
But maybe they also have an extra person or two on their team.
And so it's actually pretty similar in terms of the icp, what's challenging, but the real challenge is more so like getting them onboarded, the expectations, and making sure you deliver on that, because it's a different relationship when you charge somebody $1,000 versus $30,000.
And so just really making sure you can live up to that and deliver well.
Omer (51:58.350)
I mean, it's been incredible to see you.
Basically, it feels like I've been on the sideline watching this thing starting up and getting to the first million and then growing and kind of where you are today.
And it's exciting to kind of think about where you're going to take this business in the next few years.
So definitely we'll have to get you back at some point and talk more about this.
I feel like there's probably a whole bunch of things we haven't talked about that we could.
But for now, we've got to wrap up.
So let's get on to the lightning round.
I've got seven quick fire questions for you.
Andrew Guttormsen (52:37.150)
Sounds good.
Let's do it.
Omer (52:39.550)
What's one of the best pieces of business advice you've received?
Andrew Guttormsen (52:43.550)
Just be willing to have the uncomfortable conversations up front and early and often and don't put them off.
Omer (52:53.310)
What book would you recommend to our audience and why?
Andrew Guttormsen (52:55.950)
The one that I'm reading now, which I'm really enjoying is it's called Titan.
It's about John D. Rockefeller.
It's his biography.
It's super long, but it's a great story.
Omer (53:08.670)
What's one attribute or characteristic in your mind of a successful founder?
Andrew Guttormsen (53:12.750)
Resilience.
Just staying power.
The ability to just really keep going and go through pain and do it for a long period of time.
Omer (53:23.230)
What's your favorite personal productivity tool or habit?
Andrew Guttormsen (53:26.770)
Long walks.
Omer (53:28.050)
I've had quite a few people say that I should try it more walking.
What's a new or crazy business idea you'd love to pursue if you had the time?
Andrew Guttormsen (53:37.490)
Honestly, I'm so focused on circle, I never even think.
I don't even want to do any other think about other businesses right now.
I do too much business right now.
Omer (53:47.330)
You know what's an interesting or fun fact about you that most people don't know?
Andrew Guttormsen (53:52.620)
I played a lot of too much online poker Competitive poker, higher stakes poker back when I was 18, 19.
Omer (54:03.580)
And finally, what's one of your most important passions outside of your work?
Andrew Guttormsen (54:06.860)
I love going to cities like New York and doing a bunch of research on, like, the streets and what were, like, interesting locations there and kind of, like, understand the history of some of these cities.
I started a little app company, which basically you would do scavenger hunts through, like, cities and zoos and aquariums, and it'd be like a game because it was a hobby of mine, passion of mine, Understanding, like, what was happening in the city, like, 200 years ago.
Omer (54:41.180)
Yeah.
And these days, with AI, you can probably see it as well.
Andrew Guttormsen (54:45.580)
Yeah, totally.
Omer (54:47.180)
All right, Andy, thank you so much for joining me.
It's been a pleasure.
If people want to check out Circle, they can go to Circle, so.
And if folks want to get in touch with you, what's the best way for them to do that?
Andrew Guttormsen (54:58.620)
Yeah, so you just.
You can find me on Twitter.
It's just a Guitarmson.
It's my last name.
And just feel, literally, feel free to reach out anytime.
It's just my email is just andrewircle, so.
But Omer, just really appreciate you having me on.
I feel like we could literally talk for hours and it would be a blast.
So thank you.
Omer (55:18.130)
It's been a pleasure.
Thank you so much.
Always great to catch up with you, and I wish you and the team the best of continued success.
Andrew Guttormsen (55:26.890)
Thanks so much.
Yeah.
Good to catch up.
It was fun.
Omer (55:29.210)
Cheers.
