Circle: Scaling a Community Platform from Seed to $19M ARR – with Andrew Guttormsen [393]

This is a machine-generated transcript.

[00:00:00] Omer: Andy, welcome to the show.

[00:00:01] Andrew: Thanks, Omer, and look forward to this.

[00:00:03] Omer: It's been a while. I was, 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, I. Probably like the very early days when you guys were starting circle.

[00:00:20] So it's been great to see that journey and finally 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 can share with us?

[00:00:29] Andrew: There are two that come to mind. So one of them is a friend of mine Brendon Burchard.

[00:00:35] He has this quote which is. Who you gotta figure out like who's the person, what, who's the person that like, really needs you to be at your best today? Which I think is 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 that quote.

[00:00:52] Yeah. By the way, the other one, you, Scott Belsky shared this, but whenever you need to make some hard decisions, I dunno if you can read that. DYFJ. Do your fucking job. That also is a helpful one posted up there.

[00:01:08] Omer: Love it. Awesome. So for people who aren't familiar, tell us about Circle. What does the product do?

[00:01:14] Who's it for, and what's the main problem you're helping to solve?

[00:01:18] Andrew: 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, drop into like a.

[00:01:34] Like a video call room, but people that, tend to use circle and they're creating membership experiences and it might be somebody who's got a small backyard gardening community brings, a hundred people together up to, it could be a company like Adobe, or it could be Oprah or somebody, really big and everything in between.

[00:01:56] You have about, 10,000 customers and it spans all sorts of different, types of communities.

[00:02:01] Omer: Is Oprah using Circle?

[00:02:02] Andrew: She's about to be, yeah. She just became a customer, not, Oprah's not the one, signing the contracts. It's her team, but yeah.

[00:02:09] Omer: Wow. Give us a sense of the size of the business.

[00:02:12] Where are you in terms of revenue, customers size of team?

[00:02:17] Andrew: Yeah. We're about a hundred and 150 people today. We are about $19 million in ARR. Right now. And we're going quickly. We, last year we grew for about 8 million to 16 million. So we a little bit more than doubled.

[00:02:32] And yeah, things are good. We're about four years into it at this point. It really was about March, 2020 when. When we started working, on the product. And then from there, we launched after being a six, six month wait list like private data period to the public in that summer.

[00:02:51] Omer: 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?

[00:03:04] Andrew: It's 4:00 PM. New York time right now, I think by midnight tonight, we will officially bring on our 10000th customer today.

[00:03:15] Omer: 10,000 paying customer. Yes.

[00:03:18] That's amazing. That is awesome. Great. So let's talk about how this all started. Early 2020 is really when you guys got the show on the road. What were you doing? Before that and where did the idea come from?

[00:03:37] Andrew: It's funny, we, really technically started circle in March of 2020 which right when the pandemic was happening and all of that.

[00:03:43] 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, and Teachable's a course platform. And we were there. Sid was a third employee. I was a seventh employee. He was the ultimately like the VP of product there, and I was the VP of Growth Marketing.

[00:04:06] And we, the whole time, I think we just really respected each other and we had very complimentary skill sets. Sid eventually left Teachable about a year before I did. And I was still there and. And then ultimately Teachable was sold. So Teachable was acquired by a company called Hot Mart.

[00:04:22] 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, teachable was sold there is this, I always try to figure out what, what's gonna happen next, from here.

[00:04:37] And at the time, 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, obvious, is a lot of the best course creators, they.

[00:04:58] Were having these like Slack groups or, they were, earning a lot of money. Why were they earning a lot of money? 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.

[00:05:17] And so we thought, what if we start a business here? And so I. Had just left Teachable. And Sid had been, doing his own kind of thing, exploring for a year, just building products and stuff like that. He was actually at Gumroad for a bit. And then we were just like, let's start a business around it.

[00:05:32] Let's build the product.

[00:05:33] Omer: And did you guys, at what point did you raise money and did you bootstrap. Initially, like what? What was the process you went through to kinda get started?

[00:05:43] Andrew: Five years in at Teachable, we were really tired and actually we had no interest in raising money like we were.

[00:05:48] We were ready to, 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 sitting Rudy, have a little three person company will 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.

[00:06:07] We were starting to get pulled into the market. Actually, my close friend from Teachable who was the CEO and founder, teachable Ankur Nagpal. Him and I sat down, I we were getting lunch and I remember, walking him through, Hey, gonna', gonna leave teachable.

[00:06:24] We're thinking about starting this business and all of that. And so he's the one who kind of said first of all 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, a, a small round, relatively speaking.

[00:06:39] 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 a RR in four months. And so there was a lot of investor interest. It was also pretty frothy time in the market when, we're talking 2020.

[00:07:01] 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 interest there. And so we did end up raising. A $4 million seed round, kinda like a big seed round.

[00:07:18] And then eventually we did raise two years later we raised a $25 million round.

[00:07:25] Omer: So let's talk about the, 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 like you, you'd seen the opportunity, but what did you do to validate this idea?

[00:07:52] 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 help you, be confident that you are going in the right direction, building the right thing.

[00:08:04] Andrew: It was pretty organic early on because at the time we'd worked with tens of th like literally tens of thousands of course creators.

[00:08:10] We, 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 we're like, 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.

[00:08:27] 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 de-risk things. And what we did is we said to certain customers like, look, you're already using a Facebook group in a Slack group.

[00:08:49] You're already creating courses. What if you just had it as a little bit of a better experience, or if 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 we're gonna go out and invent some brand new concept.

[00:09:06] And so that really helped. And so we went to these customers who we understood we had relationships with, but it's five of 'em, 10 of them, and we just showed them some designs. And then to sit and Rudy's credits. I'm not the technical person on the team, like they were building the actual product.

[00:09:23] They would have that conversation the next day. They would go and they would build that in and they'd send that person an email and be like, Hey, what do you think? Is this what you were talking about? And that feedback loop was really important.

[00:09:35] Omer: Love it. Now, just one clarification. When you said bringing it all together for these course creators.

[00:09:43] In the early days, you didn't set out to build circle as a platform for your online courses. This was primarily a community platform that was integrating with other products in a more seamless way. People could use, still use teachable. Along with Circle as opposed to you're taking on's money and all these other people and then building a competitor to Teachable.

[00:10:10] Andrew: That's, yeah. So we really didn't we were pretty tired of the course space we didn't wanna go back. We didn't wanna 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 essentially like a white labeled Facebook group or a little bit more of a slack experience that you could go take and add into any course, platform or website.

[00:10:35] So we would just create the community experience. And 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. So it was just a community piece.

[00:10:49] Omer: 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 a RR in four months.

[00:11:02] 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 those, the four month started to hit the ground running once you had the product out there.

[00:11:31] Andrew: So I think that's the key that you just had, which is like, what were you doing before that? And I think I, I wanna paint a really clear picture here and clarify. So we went from zero to a million in. Four months when we launched publicly that anybody could come and become a customer of Circle.

[00:11:52] 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 wanna do was just let anybody come and sign up because we were taking a ton of feedback from people.

[00:12:14] 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 questions. Then once you did that, we would, and we would say, circle is X, number of dollars or do you still wanna get access to circle?

[00:12:37] 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, 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.

[00:12:52] I didn't copy and paste. I literally type it out every single time, personalized email, and then I would say, Hey, I saw that, 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 because this was just like a demo, like a wait list.

[00:13:07] And so then I would, if 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 'em 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.

[00:13:27] Here's a link to go pay. And that would be it. And I would just do 10 of those calls a day. And so the question then becomes how are we getting that much demand? How are we getting that many people to come through? And what we did there was first of all, just gotta be realistic here.

[00:13:42] 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 five or 10 kind of anchor customers, right?

[00:14:09] So we would use our connections that we had. It'd be somebody more influential. Who we knew would be like the perfect customer. It could be like a Pat Flynn from Smart Passive Income. Eventually it was Brendan Burchard, from Growth Day in those early days. And he three time New York time bestselling 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.

[00:14:37] 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.

[00:14:54] Omer: Wait, so what were you replying to on Twitter?

[00:14:56] Andrew: 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 we would go in and say. Circle by the way, and we tag, like we have 10 customers.

[00:15:11] We would tag like two of them that we knew would say really nice things about us today and happened 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 wait list page. They'd fill out the little form. All we had is like a picture on there describing what it did.

[00:15:27] Omer: 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, mentioning circle and just getting it on the radar. You're doing those kinds of things to drive people to your wait list form.

[00:15:51] They fill out the information. You are using that information to basically qualify them both in terms of whether they could 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.

[00:16:18] 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 make this thing happen. And I wanna, 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?

[00:16:52] One-on-one demos with people.

[00:16:53] Andrew: About 1500 demos.

[00:16:55] Omer: Which is like basically spending all your day, every day doing a lot of demos.

[00:17:01] Andrew: Yeah. And I, and actually it was about a year and a half. And I really, I wanna emphasize this point because if you had to ask me what tr, 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.

[00:17:18] 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.

[00:17:41] And so then they've had an experience like literally with the people building the product. And so it, 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.

[00:18:00] 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 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.

[00:18:21] This week and so 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.

[00:18:32] Omer: Yeah. And I think it was around that time that you and I first met and. 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.

[00:18:47] 'cause that would've probably been a good thing to do. But yeah, I just, it was like, yeah, these guys are onto something special here. And I had no idea where I was going, but it was just, there was just this energy behind it and a very clear. Vision, it wasn't like, oh, we're trying to build this and it's gonna do this and whatever.

[00:19:06] 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. And then when you see what you guys are building, it was like yeah. I think there is something potentially special.

[00:19:21] So l let's talk about the influencer piece. Influencer piece. So you talked about Pat Flynn and Brendan Bro. And you said, we used our contacts to go and get, meetings with these people. That's great. 'cause 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.

[00:19:41] But I'm sure that, Pat is getting pitched on hundreds of products, left and center. Any opportunity people get. So your relationships get you, 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?

[00:20:10] Andrew: The thing that makes it less overwhelming is you actually probably only need two, maybe three, maybe one. Anchor customer, right? So let's imagine if I was starting any software company from scratch and I needed to go out and get my first a hundred customers, let's say I was able to get my first five just regular old customers who are gonna get value.

[00:20:33] Now they're not influencer, just anybody who can pay me. I got five, 10 of those. But now I'm trying to think how am I 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 the thing with Pat Flynn so Pat, we made Patent advisor and that comes with, a small amount, relatively at the time, seems small amount of equity, but now, very valuable.

[00:21:04] 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.

[00:21:24] 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 perfect for their business.

[00:21:42] But there were only a handful, maybe 10 or 20 that we thought were really. Great. That could be that partner and like really only a handful that we're, 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.

[00:22:01] But with him, we took a ton of his feedback and that's what I would do. Like I, I would do that. I'd figure out if I was starting a software company, like who are those people, in my space.

[00:22:11] Omer: So that's, that gives you some social proof these people, are involved. And did that, like how successful would you describe those initial like influences?

[00:22:24] Did it lead to, a bunch of people that in their communities, like wanting to get on board and drive? More demand for circle? Or was it more yeah, it's opening doors, but it's not the flood gates just open. What was that experience like once you had these people on?

[00:22:40] Andrew: It was transformational and that's the thing is like a lot of people I, we had a very clear path to what 30 or $50,000 in MRR was gonna 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 gonna do. If we could just build a product, this is how we're gonna market it.

[00:22:59] And what we figured out is we're like, all right, like we wanna get to 500 employees, 500 customers. So we go to somebody like Pat and we're very trend. Transparent with Pat about our goals. Look, we're coming from a good place. We want to partner with you. We wanna build an amazing product and we think it'll be better if you do it, but very topically.

[00:23:21] 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, have hundreds of people live or a thousand people live, then follow up, 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 gonna be joining.

[00:23:53] Circle that few hundred customers right there and then, 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 gonna push the boundaries of Circle on your product and we're gonna make you better.

[00:24:12] And 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.

[00:24:31] 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.

[00:24:52] That's three key things and Matt and Pat, were all. All three of those. And 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.

[00:25:16] Omer: Love it. I think there is 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 made it real by saying it doesn't have to be hundreds of these people that you go and find.

[00:25:36] You just need a. 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, stop finding those people and building those relationships.

[00:25:55] Before you've done anything else, right? Because six months down the line or whatever is, it's gonna be a much better, easier conversation than reaching out to them for the first time when the product is done and you are like then now trying to sell it and everything. So I think great lessons there.

[00:26:15] At the same time, there were also situations where working with these types of influencers. It didn't work out. And there were a couple of examples that you shared with me. You don't wanna 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.

[00:26:40] Andrew: The first thing is it's pretty high stakes, right? We are not selling a toaster oven. 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. 'cause it really is. And so the there have been moments, we talk about 1500 demos.

[00:27:03] 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. I do. And when they come over, I always have to keep myself honest and know are they gonna do well on circle?

[00:27:17] And now there's a lot of things that can go wrong, but we talked earlier about, being in the conversation and being very like up close and personal with the real people who are using the product on places like Twitter and social and all that. And so that's, playing on the knife's edge, right?

[00:27:33] Because it can go in your favor very publicly when people are talking, great about you, they're having great experiences, but what if somebody doesn't have a good experience? And 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.

[00:27:50] Back then, 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 a Slack group. And the Slack group was like very active and people loved it. But the guy running it, he hated it 'cause it was just madness couldn't control it.

[00:28:08] And it was circles known for having really calm communities and so moves it over. Makes a nice announcement about, oh, I'm moving over to circle. And by the way, that's what we love. 'cause everybody talks about, the move and people see that and that's what creates that brand. The reputation, your brand is your reputation and the reputation helps.

[00:28:24] 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.

[00:28:45] And we're talking about something as dynamic as a community. And so I remember one time all of a sudden I wake up 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.

[00:29:03] Normally we're just, it's just some random Twitter thing or, 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 that was for me to make that move. And that was, that was really painful. 'cause actually I was a huge fan of that person, like the work that they did.

[00:29:22] And then you have to kinda dig down and. Really be honest with yourself. Like where are the valid points here? Like, how can we learn from this to make the product better? You gotta take that stuff, really seriously and we do to add onto it. I remember, one, am I I don't know him personally at all, but somebody who I've always been a fan of is Garry Tan.

[00:29:42] 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, 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 I never understand why people do this or whatever.

[00:30:01] 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, Garry Tan doesn't, is not a fan of the product today. And that stuff is not a big deal in the grand scheme of things, but it's like you're very out there when you build a product for people, especially when you build a product that's, serving SMBs and.

[00:30:28] And a lot of people, there's a lot that can go wrong and it's a two-way street.

[00:30:32] Omer: In, 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. Like how did that feel?

[00:30:45] What did you used the term that you said you, you did. Tell me what it felt like.

[00:30:50] Andrew: Yeah it's a punch in the gut, right? Like the feeling 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 their, 'cause they're business.

[00:31:04] Again, business relies on circle. The other one is where my head always goes is also the team, like our team. Because they take it very seriously too. So I know if I'm feeling something they'll feel it too. And then the other thing is we gotta learn from this. 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 just, it's deflating in that moment. Very, deflating.

[00:31:31] Omer: Yeah. You start thinking who else is writing a blog post at this moment?

[00:31:34] That's gonna go out tomorrow or next week or something.

[00:31:38] Andrew: Yeah. Yeah, exactly.

[00:31:40] Omer: And I think Garry 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 someone wants to describe to me like whether, when you're a leader or someone in a position of influence, right?

[00:31:53] You like these cog wheels that are connected, right? And you're like this big cog wheel and you turn one degree, but the knock on effect is that there's a tiny cog wheel somewhere, which is spinning because of what you just did. And it feels like that where it's I wasn't a big deal.

[00:32:07] But you're probably like, what the hell? This is. It's, and I think you had a fair amount of customers at that time and it's still that's the one thing, you can't help but focus on

[00:32:18] Andrew: and look, and I'm sure like, actually I think Garry Tan was probably right.

[00:32:23] It was probably like some, crappy design decision or something like that. So it's to Totally 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.

[00:32:40] And we know what people's experiences are to the good and the bad. We know all of it and you just have to address it head on because otherwise. The products is not gonna be good enough. Customers aren't gonna get enough value, they're gonna churn. And what are we all doing this for?

[00:32:56] It's easier now to have the hard conversation upfront and solve the actual problems than to wait and let it stack up and have to deal with 10 hard conversations later.

[00:33:07] Omer: All right, let's let's talk about. Growth beyond the first million. So when we think about getting like the first 5 million in ARR, I think you guys started to get a rhythm.

[00:33:18] You, 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 I want to then we'll go on to the whole lack of sales experience and what you did with that.

[00:33:40] Andrew: Yeah. The thing about our software company specifically is that, yeah, we do have a self-serve motion. Most people who come in, they create a free trial and then. They convert. And for us, our business has been pretty predictable since the early days. For me, I really like to feel like I'm in control.

[00:33:59] I hate not knowing where the revenue's gonna come from, what our growth is gonna 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 wanna know that they're in control. So for us, what we do is we actually have a weekly revenue meeting every single week.

[00:34:21] We've had this since probably about a million or so in a RR, where we look at our full funnel. How is our pipeline doing? 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?

[00:34:43] If there's anything that's off that's gonna drive revenue like three months from now, we wanna 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.

[00:34:57] 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, to identify why they're off.

[00:35:20] 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 gonna 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.

[00:35:36] But the channels, 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.

[00:36:01] 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.

[00:36:09] Omer: Yeah, that's awesome. Typically when you look at a company of this size and chief Revenue Officer, not always, but mostly, I've seen they tend to come from a sales background, although, your role is much broader than that.

[00:36:24] How much sales experience did you have coming into this?

[00:36:27] Andrew: 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 at a very sales oriented company.

[00:36:46] It's literally just like a sales role. So I had no formal like sales org management experience. I even at Teachable my role there, I was the VP of marketing and growth and oversaw like the marketing side of the house. We didn't even have a sales team there. It was all self-serve, right?

[00:37:03] So what I did was, I got real and I was like I'm gonna have to hire a coach and figure this out. 'cause 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 tired of it. I wanted to go out and hire a couple people, but I wanted to get it right.

[00:37:21] And, I had made mistakes in the past, actually hiring salespeople and I didn't wanna 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.

[00:37:42] And so we just, had a conversation, hit it off, and I was like, and hey, like I know you're doing coaching. I'd love to hire you. Let's eight hours, let's just do eight hours together. See how that goes. And then he became my coach longer term and, I realized the more I talked with him, how little I knew about properly running sales team.

[00:38:01] And so I was like, wow, I can't imagine not having a sales leader. And his name is Charlie, like Charlie. And 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, I tried to convince him more, in the couple of weeks he was actually already working on another venture Ex exploring something else that he was gonna take on.

[00:38:28] And 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 to, we were gonna go through, all right how would come in? What would you do?

[00:38:41] He was gonna test out, would he like working with me? So we'd go to this WeWork, 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 to be like, man, we have to get Charlie.

[00:38:59] 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, together where he'd come on. And we landed Charlie.

[00:39:16] And he's been great. Now. He, he runs our sales team, but it's a 20 person team now, and. He's just getting started.

[00:39:23] Omer: Love it. That's a great story. We're gonna have to wrap up in a minute. Just briefly tell me like you, you said you were at about 19 million in A RR last year you were at about 8 million.

[00:39:41] What's driven this dramatic growth? And I think you mentioned that it was mostly expansion revenue, but just give us an, 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.

[00:39:56] Andrew: So I think when you wanna grow. At a venture scale rate, and we'll say at like this stage, we'll say, it could be 70%, it could be a hundred percent plus 150%, right?

[00:40:07] For us we wanted to double last year a hundred percent.

[00:40:12] When you wanna grow at that rate, you gotta do multiple things. So like you need to acquire new customers. So like your gross, like new business bookings that revenue, right? 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 by delivering more value to them.

[00:40:36] So we've done like a lot of pricing and packaging, work. We ship a lot of new product improvements that people can get more value from, which increases the size of their accounts. And the other thing is you need to retain customers. You have lower churn and you don't decrease churn overnight.

[00:40:53] It just has to 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 kinda put those together, like we really spend a lot of time thinking about net revenue retention.

[00:41:15] 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 we spend a lot of time thinking about net revenue retention, how to increase it.

[00:41:32] How to get as close as we can to a hundred percent 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. On circle we've rolled out a mid-market product. Normally average customer on circle used to pay us $150 a month or a hundred dollars a month, and then we added a $30,000 a year.

[00:41:57] Your own branded apps, you can do all of it. Like just on circle it's $30,000 a year. And so that really helped to us, grow the new business number, expand our accounts that wanted to go from paying us $200 a month, for their core experience. Having full branded apps, $30,000 a year.

[00:42:12] So there's a lot, like all of those things together, they 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. 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.

[00:42:38] Omer: Yeah. Yeah. I know that you now even have an enterprise plan and your. 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 balance that?

[00:43:09] Andrew: So the truth is a lot of the people that are buying our, what we call our mid-market plan 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, it's like a creator and they're, pretty successful in all of that.

[00:43:31] The people who buy the. Branded app experience where it's all their brand, nothing, related to circle. Like a lot of times they're just like 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.

[00:43:51] And so it's actually pretty similar In terms of the ICP what's challenging, but the real challenge is more so getting them onboarded the expectations and making sure you deliver on that. 'cause it's a different relationship when you charge somebody a thousand dollars versus $30,000. And so just really making sure you can live up to that and deliver.

[00:44:09] Omer: It's been incredible to, I. 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 where you are today. And it's exciting to think about where you're gonna take this business in the next few years.

[00:44:29] Definitely, we'll have to get you back at some point and talk more about this. I feel there's probably a whole bunch of things we haven't talked about that we could. But for now we've gotta wrap up. So let's get onto the lightning round. I've got seven quick fire questions for you.

[00:44:43] Andrew: Sounds good. Let's do it.

[00:44:45] Omer: What's one of the best pieces of business advice you've received?

[00:44:49] Andrew: Just be willing to have the uncomfortable conversations. Upfront and early and often and don't put them off.

[00:44:57] Omer: What book would you recommend to our audience and why?

[00:44:59] Andrew: The one that I'm reading now, which I'm really enjoying is it's called Titan.

[00:45:04] It's about John D. Rockefeller. It's his biography. It's, it is super long, but it's just a great story.

[00:45:10] Omer: What's one attribute or characteristic in your mind of a successful founder?

[00:45:14] Andrew: Resilience, just like staying power. The ability to just like really keep going and go through pain and do it for a long period of time.

[00:45:24] Omer: What's your favorite personal or productivity tool or habit?

[00:45:27] Andrew: Long walks.

[00:45:28] Omer: I've had a 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?

[00:45:37] Andrew: Honestly, I'm so focused on Circle. I never even think, I don't even wanna do any other, think about other businesses.

[00:45:43] Right now I do too much business right now.

[00:45:45] Omer: What's an interesting or fun fact about you that most people don't know?

[00:45:49] Andrew: I played a lot of too much. Online poker, competitive poker, higher stakes poker back when I was 18, 19.

[00:45:58] Omer: And finally, what's one of your most important passions outside of your work?

[00:46:02] Andrew: I love going to cities like New York and doing a bunch of research on the streets and what were like, interesting locations there and. Kinda understand like 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.

[00:46:31] Omer: Yeah.

[00:46:32] And these days with ai, you can probably see it as well, right?

[00:46:36] Andrew: Yeah, totally.

[00:46:37] Omer: All right, Andy, thank you so much for joining me. It's been a pleasure. If people wanna check out circle, they can go to circle.so. And if folks wanna get in touch with you, what's the best way for them to do that?

[00:46:47] Andrew: Yeah, you can just, you can find me on Twitter.

[00:46:48] It's just A on, it's my last name. And just feel, literally feel free to reach out anytime. It's just my email's, just andrew[at] circle. 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.

[00:47:02] Omer: It's been a pleasure.

[00:47:03] Thank you so much. Always great to catch up with you and I wish you and the team the best of continued success.

[00:47:10] Andrew: Thanks so much. Yeah, good to catch up. It was fun.

[00:47:12] Omer: Cheers.