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The SaaS Podcast

Itai Sadan - Duda

Duda: From Frustrations and Doubts to 8-Figure ARR SaaS – with Itai Sadan [378]

Duda: From Frustrations and Doubts to 8-Figure ARR SaaS

Itai Sadan is the co-founder and CEO of Duda, a professional website builder for digital agencies and SaaS companies.

In 2009, Itai and Amir, both at SAP, were eager to start their own venture, always on the lookout for a winning business idea.

Noticing that many small businesses struggled with mobile website creation, they dedicated their evenings and weekends to developing a solution.

Eventually, they shipped basic software for building mobile websites. But they struggled to find customers because they had full-time jobs and not enough time to dedicate to their business.

Getting investors on board was tough, too. Nearly every investor they spoke to wanted to see more customers and traction. And many were skeptical about the business idea.

The first year was full of frustration and the founders questioned if they were on the right track.

But the pair kept going, relentlessly improving their product and looking for customers.

Eventually, they caught a lucky break when their product caught the attention of someone at AT&T, who reached out to learn more about what they were building.

Three months later, they had signed a significant contract with AT&T.

Today, Duda is an 8-figure ARR company used by 22,000 agencies to manage over 1 million websites. The team's grown to 180 and they've raised $96 million in funding.

In this episode, you'll learn:

  • How the founders overcame significant challenges in the first year where they struggled to acquire customers and heard constant no's from investors.
  • What the founders did to eventually land a big fish like AT&T and how that one customer helped them finally build credibility and validation with investors.
  • What strategies they use to acquire customers and establish a foothold in the competitive website-building industry.
  • How focusing on one specific customer persona helped the Duda founders to get better traction and align the entire organization.
  • Why the founders chose to pivot and rebuild their core product during a very successful time with their mobile website builder, and why that decision was crucial to long-term success.

I hope you enjoy it.

Transcript

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This is a machine-generated transcript.

[00:00:00] Omer: All right, Itai, welcome to the show.

[00:00:01] Itai: Hey, Omer. Thanks for having me on the show. Excited to be chatting with you.

[00:00:06] Omer: My pleasure. Do you have a favorite quote, something that inspires or motivates you that you can share with us?

[00:00:10] Itai: Yeah. It's the quote from The Big Lebowski. It's the rug. I had it tied the room together.

And for those who don't know my company is called Duda, and Duda is named after the dude which is played by Jeff Bridges in The Big Lebowski. I think you know, the rug in that movie was the centerpiece in, in his house, and it's kind of this triggers the whole story in the movie. But kind of that, that analogy also relates to a company.

I think every company has a center masterpiece or a center of gravity, in due that the center of gravity is me and my co-founder Amir. And the, the foundation for the company is really the relationship between both of us. Amir is the CTO. I'm the CEO. He's based in Israel. Half of the company is there.

The other half is partially with me and around the world. I see the business side and I think a lot of the values of the company are predicated on this kind of the, relationship between me and him. I actually know Amir since high school. So we go, we go. We've, we've kind of gone through a lot of things together.

We persevered over 13 years of the company, challenges ups and downs. And yeah. So I think that's kind of the, if you ask a lot of people in the company, the core is really that kind of the relationship with the two founders, which is an extremely important relationship in, in any business.

[00:01:37] Omer: I had completely forgotten about the Big Lebowski. And if anybody hasn't seen that, like just, just go on YouTube and look for Pete on the Rug or something like that. I think it's, it's a pretty crazy movie. So tell us about Duda. What does the product do? Who's it for? And what's the main problem you're helping to solve?

[00:01:57] Itai: So Duda is the leading web design platform for digital marketing agencies and web designers. It's basically a, a website builder for web professionals, people who are building a lot of sites for small businesses, typically tens, hundreds, and thousands of sites a year. It's much more than just a website builder.

It has capabilities that help web designers, digital marketing agencies collaborate within their teams, manage their clients, build per pixel perfect sites and, and so on. We have today 20 2008 digital marketing agencies using the platform. They've built over a million active paying sites.

So we've been doing this for quite a while and continuing to build and grow the company.

[00:02:45] Omer: So give us a sense of the size of the business. Where are you in terms of revenue, size of team?

[00:02:51] Itai: It's eight figure in terms of revenue. The team is 180 people. We have about six, seven offices around the world, and I think you've raised around 96 million to date, almost a hundred.

And the funny thing is we'll, we'll talk about this, but when you, the two of you started out, investors weren't interested at all with what you guys were doing.

Yeah, absolutely. You're correct. It, it was tough time back then. It was 2009, right after the 2008 financial crash. And we know we didn't have a lot of traction to show, and we'll talk about it probably in a second, but the initial solution that we came out with is also different than what we have today.

It was a mobile only site builder back then. That was the idea to take desktop sites and convert them to mobile, which was a solution that small businesses were looking for back then. And we, we found a couple of customers. So Amir and I were both working at SAP at that time, and we found our early customers by either knocking on doors on University a in Palo Alto, or putting a little bit of money against ads in on Google.

So initially we used our own tool. We were kind of an agency ourselves, and we used our own tool to build sites ourselves for small businesses. The intent was always at the end to get to a point where it's self-service and customers can do it themselves. But initially we kind of ate our own dog food just to make sure that it actually works.

And it did work, and there was some interest. The numbers were still relatively small in that, in kind of the first year, 2009, it was still a side kind of hustle for us. Our, our vision was, you know, we would leave SAP, we would do it full-time, but we really needed investor financing to do it. We both had families.

We couldn't just drop everything and and just start start a business. And I think the initial numbers were, you know, when we were talking to investors, there were a lot of questions of, you know, how big can this be? You know, and, and so forth. So we were, we tackled that for, for the first year. There was a, you know, there were tough, there were definitely tough days in that first year where we were even questioning ourselves, are we building the right thing?

You know, will this, is this a real business?

[00:05:17] Omer: So, so that first year, 2009. This is a kind of a side hustle for the two of you. While you're working full-time at SAP, how, how easy or hard was it to get conversations with investors? Because you are very, very early on with starting this. This company I. And you know, how many, how many investors did you reach out to?

How many conversations were you able to have?

[00:05:43] Itai: We were in the Silicon Valley, so it wasn't, I don't think it was really that hard to get initial meetings. It's, it was really difficult to get, I. The second meeting after the first, we, we just heard a lot of nos. No, no interest. You know, this is, was before there was other site builders that in the space that went public.

So there was no big company in the space, you know, Wix or Squarespace, although were not big yet. So folks were doubting how big this can get, and we were really focused on mobile side. So it was the early days of mobile. You know, the first version of the iPhone just came out kind of in 2008. So is this really gonna be enough of a platform to build a business around?

So there was a lot, a lot of questions about how big this can get.

[00:06:29] Omer: And from what I understand, it wasn't like a. What it is today, a re, you know, a responsive website builder. You were helping companies to basically build. A mobile version of their website alongside their main site. Is that right?

[00:06:46] Itai: Yes, exactly.

It was we basically, it was a very simple solution and that was a little bit of the beauty behind it. All you had to do is put in the URL of your desktop site, you click submit, and we kind of take it and reformat it for a mobile screen. So a lot of the pain back then was that even, you know, the best sites on the internet once you.

Looked at them on an iPhone or an Android, you really had to pinch and zoom through that website. And we kind of sold for that by creating a really great experience. It was almost magical and and folks could continue and edited it, essentially created the m dot version of the site, but that was also.

You know, now I'm jumping ahead, you know, two or three years later. Initially a lot of companies were adding this wanted like an mdot version of their website to address mobile traffic. But a couple of years later, with the proliferation of devices and screens. People didn't wanna build a site for mobile, a site for desktop, a site for tablet.

They just wanted to build it once and it runs on all devices. And that was kind of the next challenge, you know, that we, we had to face down the road. But maybe I'm jumping a little bit ahead 'cause that was like two, three years later on in 2012, kind of.

[00:07:59] Omer: Yeah, we'll definitely come to that. I, I just have a couple more questions about that first year or two.

The, the first year, as you said was pretty tough in terms of, you know, the investors don't seem interested. You did get a little bit of traction. You've got the product out there. You, you, you've signed up some customers, so you know, it's, you have some early promising results, let's say that, but I, I know from this constant no's that you were getting, at some point, you two started to doubt yourselves as well, whether this was the right thing or whether you were going in the right direction.

And then at some point you had a lucky break. Can you talk about that?

[00:08:42] Itai: So this happened in 2010. So we're operating more or less a year as a side hustle, side project nights and weekends, getting a couple of customers, again, a lot of no's. And then at some point AT&T heard about what we were doing and they got interested and those discussions moved very quickly.

And in about three months, I would say from the first discussions with them. We were with the deal signed and they were ready to go live with our product. They basically white labeled our product, put it under the at t brand. Back then it was a it was called at t Interactive. It was a sub-company inside at t and they were offering it to their small business customer.

And this was really what triggered invest investors started to get in interested as there was a proof of a big brand that was interested in the product. And so, more or less, alongside in those three months while we were kind of launching with at t we got our first seed round.

Which also helped us kind of leave SAP and dedicate our kind of full attention and time to, to this company.

[00:10:03] Omer: So do you know how AT&T found you guys?

[00:10:06] Itai: They found us through actually a relative of mine who met one of the executives in AT&T interactive in the conference. So, just by chance that relative of mine knew enough 'cause I demoed to him what we were doing.

So he got, he just got enough of he was able to explain what we were doing so that the enough for them to be interested and reach out to get more information. I think you can't, it feels, it feels very, very lucky. And I'm sure luck is always a big component of everything but. I hear a lot of you know, I talk to a lot of entrepreneurs and that same challenge that we have.

Everybody's kind of, yeah, investors are not interested. They wanna see traction, but they're not willing to invest in me so I can do marketing, so I can really get traction. So it's kind of always a chicken and egg, but you just have to crank through it. I think that's the, you have to crank through it until you get that break either.

You know, you continue to evolve the product in, in the very little resources that you have because you believe in it, you continue to get more customers and either. If you're kind of in the SMB space, you have to, when investors want traction, they wanna see enough small business customers, enough volume to show that this is a credibly growing business and can continue to grow.

Or if you're more kind of in the enterprise, mid-market, enterprise space, you need to land that that big, that big fish without have, without having a lot of investment in your company, just based on. You know, a big customer having a need and seeing, you know, you with your solution, solving that pain. So once you get that, and I think you in today's world, you should be able to get that with relatively little investment for, for many software businesses at least.

thEn I think the rest of the things will follow.

[00:11:55] Omer: Do, do you remember roughly how much the at t deal was worth

[00:11:58] Itai: at the time? I have a, I have a picture until this day with kind of the, the check once it arrived home and I'm come kind of holding it outside of outside the door next to the post box.

I don't remember exactly how much it was. I'm, I'm sure it was in, you know, in the kind of tens of thousands in monthly revenue in the first couple of months and then, and then probably grew beyond

[00:12:20] Omer: that. And it gave you enough in terms of revenue and I guess confidence for the two of you to say, okay, this is the time for us to quit our jobs. Go full-time.

[00:12:32] Itai: That and mainly, and, and mainly getting the investors interested. So after hearing a lot of nos, suddenly we had two term sheets, you know, just, and actually the, the person who invested, who's his name is Orrin Zev, he's our seed investor, amazing investor. You know, until today, 13 years later, we're very close and he's still on the board and very involved.

He always says that. He, you know, he invested 'cause he believed in the business. Despite like that the vision was not like servicing big customers like at t but probably if we didn't have at t he wouldn't have invested. So I. It was important to get a proof that there's a customer out there, a big customer.

That's what that sees value in your product. But he believed in this kind of long, longer vision out there where we would open this as a self-service product and, and get lots of customers.

[00:13:28] Omer: Great. Okay, so the two of you are now working full-time on the business. And I, I guess a year or two later, or two years later, around 2012, you hit another roadblock, which is, I guess when you, you, you start to question whether having a mobile only site was the right solution, the right kind of business model for, for your company, what, what was happening externally that drove.

You know, you guys to kind of look at what you were doing. 'cause in some sense you could say, well, great. It's like we finally, you know, for a year we weren't getting anywhere. Send, we've got, we've got a big customer signed up, investors are willing to invest money. What, what changed that Got you guys kind of rethinking the game plan?

[00:14:23] Itai: Yeah, it's a great question. And it, it was difficult to really identify, right? It's, it's kind of, there's a market dynamic that is changing. But it's, it's not that you, one day kind of, it's not as clear. It's not like that. You get to a point where it's a cliff and the business is falling off the tracks.

Now, the business was doing really well in 2012. Just raised our B round from from VCs. The business was growing at, at a spectacular pace. We, we had, you know, hundreds of thousands of mobile sites on the platform. By then, we were growing really fast. There were starting to be signs out there that there's some danger down the road.

It's not that the business was falling off the cliff and we needed to make a decision, not at all. It was hard to spot this, but there were, there were certain signs of, of, of risks, responsive design. Started to garner attention, right? We were a mobile only solution. Responsive design was kind of a paradigm where you you know, can build it once and it runs on all devices.

And we were starting to hear a lot of questions. You know, maybe a lot is exaggerate, but we were with some of our partners questions about, you know, is this responsive? Is this adaptive? What is this? Mobile, you know, mobile type of site. is This the future? So we started sensing these questions and we had good answers for them.

And the challenging thing is, as I said, we were growing, we're getting, you know, revenue was growing and to, to pivot into kind of something to do something else was, you know, was a, was a, a big, a big risk at that point. I can understand how, you know, you look at the history how so, so many great companies, if you take kind of the, the Codex and the Blackberries, the blockbusters, I'm sure the smartest people in the room were in these companies and they might have seen like what is coming down the road.

But when you have a business that is, you know, when you have sales teams and so many people incentivized on. You know, bringing in revenue from a very certain source, it's really hard to come and say, Hey guys, let's stop doing what's kind of this entire revenue that is paying everybody's salaries around here, and let's go do something else.

Right? It's, it's a very difficult thing to do and kind of move that chip, you know, unless you really have to. And, and I think you know, we, I mean it's, it's more at the, at the, you know, startup phase. I feel it's really the responsibility of the founders to look ahead and navigate that chip and make sure that the company always maintains product market fit.

And if the market adjusts or moves. You have to adapt the, the product in order to make sure that you sustain the business. And in kind of that end of 2012, we started like we first persuaded ourselves as the two founders that we needed to, you know, kind of build something that would be a responsive design solution.

We were also thinking about other options we could have gone into other, 'cause the company was really. Rooted in mobile. We were even called do to mobile back then. So it was really hard to come and tell everybody, Hey, we're called do to mobile and we're all, all, everything we do is around mobile, but let's go do this other thing that is not mobile.

So we also thought about, you know, should we go into mobile advertising? Should we do other things? 'cause obviously mobile was big and there might have been other opportunities there as well, but we decided that. We felt that there's a big opportunity around, around responsive web design and we wanted to come out with the first solution to the market that would be a simple website builder based on responsive web design.

We felt that there's an opportunity there and we started, we first persuaded the management team and then kind of talked to the company about it and we got people bought into it and kind of end of 2012, we started building kind of our second product. Which is our core product today and called Duda.

[00:18:44] Omer: And then presumably you had to persuade the, or at least get the investors on board as well after having raised a, a series B on a, on a different idea to then say, guys, we're actually now gonna go and invest in and take this in a, in a different direction. I, I think one thing I, I wanna try to understand is we're talking 2012, what did the landscape look like at the time?

Because once when you're building a, a, a mobile website builder, it's, it's, it's a very clear value prop. I don't know how many other solutions were around at the time, but when you then say, we are a website builder and you know, yeah, we're responsive, but we, we are one-stop shop for building your website.

You're now kind of getting into the space with WordPress and. I don't know what was happening with Squarespace and Wix at the time, but I, I assume they, they had a decent presence by then, right? Yeah.

[00:19:41] Itai: They had a decent, they, they were known, they were not I don't believe they were public at that point, but they were, they had a really nice growing user base there.

And, you know, we thought we could beat them. We, it's kind of, we were mobile and we were adding kind of the other screens and they were going the other way from being desktop first, adding kind of mobile to, so it was kind of a race. It took us much longer than we thought until we launched with a product.

We were not the first responsive website builder out there, although that's what we hoped we would be. Then kind of by the time we eventually launched that product in 2014, it took much longer to build than we thought. It, it was, it was tough 'cause there were other solutions. And suddenly kind of, maybe for the first time in kind of three, four years of the company, the word differentiation came into the jargon.

Like, how are we different? You know, why are customers gonna come to us and not to them? So we were thinking we were looking at our user base and about 50% were small businesses building websites from the, for themselves. And the other 50% were these web pros, web designers, digital marketing agencies, marketers, building websites for others, and kind of the company was torn between these two types of customers.

'cause each one was asking for different things. The SMBs were asking, you know, build me, you know, these simple tools so I can just click, click, click, and launch my website very quickly. While the web designers were asking for sophisticated tools, powerful tools, I. So we, we were, we, we understood that we needed to make a decision between these two customers that were kind of tearing the company apart.

We were significantly under-resourced compared to, you know, the giants in the space. And there's no way that we can address these two customers successfully. So we looked at the data and we felt, based on the data that these. Agencies. Web pros were growing faster than our small business customers.

We also felt we understood them better. Maybe it's the Israeli engineering, DNA, I think we're we're good at building sophisticated technology. We maybe weren't as good or as excited about kind of dumbing down the platform for a very non-technical simple user. Then third, we felt that there was a really big opportunity just around the Webpro market.

We felt these customers were underserved with existing solutions and we felt that by doubling down we could really hone the platform to address their pain points and kind of have a differentiated messaging to the market that we are a platform for Web pros. So I'd say kind of from 2015, we made that decision that we're gonna be a Webpro first company.

And from that day onwards until today, we, we don't spend a dollar to acquire a small business.

[00:23:01] Omer: So I think that all makes sense. And, and, and definitely it's, it's it, you know, we can look back now and say it was probably the right decision for you to do that. For someone who's, who's listening to this might be thinking.

Well, why, what forced you to make that decision? You, the company's growing. It's growing. Well, you mentioned you'd raised the series B, you've got these two customers and, and at least up until that point you had been able to serve both their needs and, and the business was, was growing. I think you alluded to it a little bit when you said having these two customers was, was tearing our company apart.

Can you just. Help. Help us understand what were some of the struggles that were getting caused by having these two groups versus just saying, well, yeah, we could make this decision, but we could probably also go another four or five years by still kind of trying to walk the line and, and keep growing these both, both these customer bases.

[00:24:02] Itai: So I think in the early years when we were only a mobile solution, you'd ask me, who's your customer? I'd say. Whoever wants to use the product. There was, there was really, we were not there was no discussion about differentiation. We were growing gangbusters. And I think at that point it's just a land grab.

And if you're in that position, I think that's a very great place to be in, to be a leader and that when there's so much market demand, you don't need to think too much about differentiation. You just continue building and, and growing your user base. Two, three years is in that trajectory changed. We, as I mentioned, due to mobile, like mobile was starting to decline.

We launched the responsive website builder. It was growing and it was growing in nice percentages, but it start, it's a subscription business. It started from zero, so it was, you know, small numbers in terms of revenue. Now you're making millions on a product that is declining. You have a product that you just launched that is getting nice traction, but you know, still low numbers.

It's a very tough, now you're, and you also have investors now on board. Think of the top line in this company. We had about two years there, I'd say kind of 2014 to 16, where revenue was just flat, right? This mobile product that had a lot of revenue was financing the growth of a product that was still very early.

So it was like we're taking dollars out of one pocket and putting it in the other pocket. And I think the, the newer product. It was growing, but not growing at the same levels that, you know, the heydays of mobile. And there was a lot of competition, as I mentioned from like the Squarespaces, Wix, the WordPress.

So we were really pre, we knew we couldn't raise more money, like when the, the top line revenue of a company is flat. We were supported in those two years by our existing investors, which were great. You know, these were also tough conversations with the existing investors. You know, we were not profitable.

We were far from being profitable. We needed them to continue and support the company, a company that they knew that, you know, no external investor is gonna put more money into, but proving through the numbers that there was something there, something growing. It at least helped us you know, get them to continue to support us, to support us.

And I think going back to your original question, you know, through all these conversations and the challenges with growth and part of the business declining, part of it is growing. There's also that differentiation question and this new platform, why is it gonna be better than these other platforms in the market?

What's our differentiation and so forth. So that kind of really forced us to. Also from an efficiency perspective, when you're supporting two platforms and all customer types, like how are you really gonna compete with these giants? You know, when your r and d needs, you know, when you have an r and d that is maybe the 10th of a size of your competitors and they're focusing on less customer types than you are.

You're, you're forced to make kind of a, a, a decision if you don't wanna hit the hit a wall. Yeah.

[00:27:25] Omer: So you, you basically said, we're gonna go all in with, with pros. We're not gonna try and build this product for SMBs. How did that look in terms of execution? Was it like, I mean, obviously like, did you just let these SMBs continue using the product and then, you know, if they, they churned, they churned, but everything you were doing beyond, you know, beyond that point .

In terms of go to market, any ad dollars you were spending where your sales folks were focused, it was more all about going after pros now.

[00:28:01] Itai: Yeah. Very much. The latter. We didn't fire any customer, so we, we were in a fortunate position where I. It didn't require a lot of investment to retain the SMB type of customers, and until today, actually, if you're an SMB, you can go to our website Duda.co and sign up for a website, and we probably still have a lot of SMBs.

Although the messaging on our website is very clearly geared towards agencies and web professionals. But some small businesses are more tech, you know, technically inclined and maybe want a more sophisticated product and find it within our solution. So yeah, so every, like maintaining that customer base, it was important.

That was generating a lot of revenue, but really kind of starting to transition. The company in terms of from a marketing perspective, the level of messaging, if previously we needed to, you know, when it was, it was, there was always conversations arguments in marketing. Do we say responsive web design or maybe SMBs don't understand that and we should say works on tablet, desktop, and mobile.

Right. So these conversations went away the moment that we decided, no, we are a webpro company. Marketing team knew at what level to message. The RD team knew which features to prioritize. The sales team understood who their customer was, so it, brought a tremendous amount of clarity and focus into the organization.

Just that what seems like a real, you know, maybe simple decision. It, it had a lot to do with focus and really help kind of propel the company to where it is today.

[00:29:34] Omer: Great. So I want to talk about growth and some of the strategies. That helped you, you know, grow the business as well as some that didn't work out well.

Before we do that, one of the things that we, we didn't talk about was the Google deal or partnership, which, which happened I think around 2012. So can you, can you explain like, what was that? What was that deal? What did it look like and, and how did it come about?

[00:30:05] Itai: So this was still on the, you know, mobile days when we were still due to mobile and con conversations with Google got to a place where they wanted to offer our mobile product to their customers under their own brand.

And Google very seldom does that, where they will take a small startup software. Put their own brand on it. It, it was like Google Mobile website builder powered by Duda. So it was co-branded and they emailed their Google AdSense, Google AdWords, Google Analytics customers telling them you should really mobilize your website with the software.

'cause their, their intent, they were actually losing advertising dollars because desktop sites were not. Driving the engagement on mobile, and they wanted a lot of their customers to move to mobile to drive more, you know, advertising, sales. So that partnership was extremely beneficial for us. It, I think until today, a lot of people, when I say do that, they say, do the mobile.

Like even though this was a product from, you know, 10 years ago, it's just being associated to the Google brand and the power of marketing that they have when they. Do something at this scale. And we were working with so many teams inside Google, in different countries, different locations to make sure, you know, we were localizing this product for different markets, for the Spanish market, obviously for the English market, for the Japanese market.

We can talk about that as well. So, you know, that, that I really feel gave us a huge boost. By the way, some of the challenges that I talked, the flags down the road in that relationship with Google around where we started to sense that mobile might be a problem, is some pushback that came from again, this was maybe a year in or a year and a half into that relationship with with Google, and that partnership was working well, but some of their engineers started pushing back on.

Like due to mobile, we don't see it as the future solution. The future is really responsive. So these are some of the things where we picked up, where some of our partnerships were also having this debate internally if this is the right solution or not for the future.

[00:32:29] Omer: How did that deal come about? How did you get talking to the folks at Google?

[00:32:33] Itai: Oh yeah. I don't remember exactly how that how that one came about.

[00:32:38] Omer: I mean, it is really unusual for, for Google to want to like, take a product from a startup and, and, and white label that for their customers. I mean, you know, I spent a long time at Microsoft and you know, although we didn't explicitly say it, we always had this culture of, you know, not, you know, if something was not built in Redmond.

You kind of were like I don't know about this. Right. So it was always about, you know, you know, we, we build, it's not really a buy decision unless you're acquiring a company or something like that. Right. So yeah, it was a very, very unusual thing. So I was just curious, like, you know, why, why it happened, and I think you've explained that a little bit, but it sounds like, you know, like how did that sort of deal.

How long did it last? Like couple of years?

[00:33:26] Itai: No, it was about I would say it was about a year, a year or maybe a little bit longer. And it, it was a, it was a unique deal where we actually gave all Google customers the, the mobile site for free for a year. And the deal was whoever we managed to retain after a year, that's like a hundred percent our revenue, so they get it free for a year.

And the really, the game is what kind of conversion there will be. You know, in the second year thereafter, Google wasn't like interest, they didn't care that much about the revenue from the, the site. So they let us keep a hundred percent of it after the first year. They just wanted us to be able to give that for free for a full year to their customers, which, you know, I think was very beneficial for both sides.

[00:34:09] Omer: Yeah. Yeah. So let's, let's talk about. Growth and, you know, some of the main, channels that, that have worked for you in, in the, in, in this sort of early years. What drove the, the majority of the growth? Like how were you acquiring customers?

[00:34:29] Itai: So we used the all channels all common channels between, you know, search, organic, paid to, to grow our acquisition.

We always had a, it's, it's a very self-service product-led growth type of model where people come to the website. Try out the, the product there were initially, maybe it was free for a certain period. We, we later then changed to more like a free trial type of paradigm. And that engine of, you know, of freemium UN until today has kind of been at the core of what we try to do, drive people to start a free trial of the product.

So what, when you can do that with software and. Give it to for free for a certain period of time. I think this is you know, a, a key to kind of the success and getting kind of a really large top of funnel and eventually optimizing that to conversion.

[00:35:29] Omer: So initially you, you're driving sort of this product led growth and then you started to see this opportunity for a reseller program.

Right.

[00:35:40] Itai: And so the reseller program is, you know, initially it was, you know, like many maybe companies have on their website somewhere on the navigation you have something that says partners or resellers. I. That's, that's how it started with folks asking we, we gave some additional features in that program.

Like you could actually white label our own product, so display it, you know, you could display it to your customers under your own brand, and you would have to pay extra for that. It was also a way, like we looked at a, you know, inside the, the funnel that we had. Try to identify folks who could be interested in that program and kind of funnel them to, to talk to salespeople.

You know, that's, that's the only area where we had salespeople. So it's either you did self-service and used it, or if you wanted to talk to us about the reseller program. And that reseller program, you know, started growing. We hired more people. It became more established, more successful, started generating more material revenue.

To a certain point where, and it kind of started taking more real estate on the website, where we kind of figure it out, you know, this should actually, you know, this is the product, so let's, let's make sure that it's not just, a product where. There's a reseller program, but the actual product with, with the transition that I talked about previously, where we wanted to focus to web Pros, let's put this front and center that this product, once you get it, it's not just a website builder, but it's a website builder that you can white label and has features that are relevant for agencies, web designers, people who are building sites for others, and eventually it's, it's the, the whole website and the, and the focus of the product.

[00:37:34] Omer: And, and so this became like your primary growth channel for the business, uh, until you sort of made this shift to, uh, selling more to agencies. Like how, how long, how long was the, the reseller program something that, you know, continued to dominate sort of growth and, you know, or until you had to start thinking about agencies or alternative channels?

[00:38:01] Itai: So in that, what we call, like our agencies are the resellers, right? That's they, they are the channel into the SMB market. So kind of at that point in 2015 when we decided no, we're gonna be a web pro only type of company, that's kind of when we fully transitioned. Where, where that program of Web Pros was basically the only.

Program and the price and the plans that we had on our website were only plans for people who are gonna resell. So build websites and resell the websites.

[00:38:37] Omer: Okay. Okay. Got it. That makes sense. One, one of the other things that you, you guys tried to as, as a growth strategy was I. International expansion.

And one of the places you, you tried to to get into was, was Japan. And, and I, I dunno how much of an investment you made in there, but ultimately that turned out to be a lot more difficult than, than you had, had, Ima imagined. Tell, tell, tell us a little bit about that. Like how did, how did that come about?

Why did you pick Japan? What kind of investment were you guys, you know, or did you, did you make to, to try and break into that market?

[00:39:14] Itai: So we, we were predominantly, I would say, early days North America type of solution. Some, some level of penetration in emea, but no, no feet on the ground in emea. so Doing relatively little there, but anybody from, you know, anybody from around the world could use us.

And through this relationship with Google Google Japan became really interested in our product and invited us over. We did a kind of a one week trip there. Me and my chief Revenue Officer. We said, okay, if we're heading to Japan all the way there, and we were trying to support Google with whatever they wanted, right?

They were the key flagship partner. You know, whatever you want, we're here to deliver. 'cause it was a very, it was a great partnership. And so we set a couple of other meetings while we're there in Japan. And we hired a firm that was, knew how to insert or help startups penetrate the Japanese market.

And they set a couple of meetings for us and we came out of a week there with about seven partnerships, big companies that wanted, you know, big Japanese conglomerates that wanted. Our solution. So you have kind of, you know, everything that you need, you know, super successful week you know, we're going into Japan.

We understood that there's a cultural, a language barrier. You know, people tell us, you know, you can't succeed without a GM there. So we hire a GM there. That GM obviously can't do everything themselves. They needs, like a support person, needs an account manager. You know, very quickly you find you have like three, four people there and then kind of you look, you know, a year, two years down the road from that decision, there was not much revenue to account for that, even though we had these, you know, five or seven partnerships.

So there was a dichotomy between. The potential that we thought that was and what the actuals, what, what revenue we were seeing from that region. And eventually, after two years we actually decided to shut down that office. So it was a very big jump for a company like ours to go into a market that is so different from a cultural perspective, from a language perspective, it was even hard for us to understand what were exactly the challenges of why these partners in Japan were not selling well.

We had to rely on translators, our, our team there. We were hearing kind of different stories. You know, the, the Japanese culture, you know, nobody wants to kind of insult you and tell you maybe the exact reasons, so you're hearing different things. So we, until today, I can't tell you that I exactly understand why we didn't succeed there.

We tried different things and it just didn't work out. And we decided that you know, maybe we kind of jumped a little bit you know, over our skis there. And we needed to go back to focus on the key geographies that are, are working. And it's probably. Makes more sense for a startup that has been doing, you know, kind of well in the, in North America to consider, first of all other English speaking countries that like, you know, Canada, Australia, South Africa, obviously uk, you know, expanding there, expanding to other countries in Europe, things that are.

You know, not as big of a leap as going into to Asia. That requires much more scale and much more resources in a company to maybe do it successfully.

[00:42:53] Omer: So I think we should wrap up. We should get onto the lightning round. I've got seven quick-fire questions for you. Just try to answer them as quickly as you can.

Are you ready?

[00:43:02] Itai: Absolutely.

[00:43:03] Omer: Let's go. Okay. What's one of the best pieces of business advice you've received?

[00:43:07] Itai: I've received a lot of business advice. I think there isn't one single thing that I would call out. I also received a lot of advice that wasn't that great. I think at any stage of your company you should listen to different people and make up your own mind.

[00:43:20] Omer: What book would you recommend to our audience and why?

[00:43:23] Itai: It's the hard things about hard things. By Ben Horowitz from Andreessen Horowitz. It's just a great business book. He talks about his own professional journey. He, and he shares a lot of the things that, you know, he screwed up along the way. A lot of great learnings from that book.

[00:43:41] Omer: What's one attribute or characteristic in your mind of a successful founder?

[00:43:46] Itai: To be levelheaded. At least that works for me. I think there's so many ups and downs on this journey of building and scaling a company. There's good times, there's bad times you need to keep levelheaded.

[00:44:01] Omer: What's your favorite personal productivity tool or habit?

[00:44:04] Itai: I personally use Asana as kind of my to-do list. This is where I store all kind of the. Tasks I need to, to do. I prioritize them and for me. That being kind of the storage place for all the things I need to do. It's, it's also a peace of mind that I know I don't need to keep on thinking about, I need to do this, I need to, it's there.

And this is kind of how I decide what are the things that I'm gonna be doing in the next day or week.

[00:44:36] Omer: What's a new or crazy business idea you'd love to pursue if you had the time?

[00:44:40] Itai: Oh, I, I have a lot of great ideas, but I'll keep them to myself until I have time.

[00:44:46] Omer: Okay. What's an interesting or fun fact about you that most people don't know?

[00:44:49] Itai: I have four di different citizenships from four different countries, each one in a, in a different continent. So it's Israeli, American, south African, and Polish. I. Maybe that's kind of something we can talk about in the next podcast.

[00:45:08] Omer: Yeah, that's a separate episode. Just how you got those four. And finally, what's one of your most important passions outside of your work?

[00:45:15] Itai: I love sports. Any sports, but especially running, biking, surfing.

[00:45:21] Omer: Great. Well, Ty, thank you so much for joining me. It's been a pleasure chatting. I, I, I love the story of, of what you guys have gone through to, to build Duda and get it to where it is today. I think that, you know, there might be people out there listening who are in that first year back, you know, this year is there 2009, and they're struggling to get their idea off the ground.

And, and maybe your story will provide some inspiration. And then beyond that, you know, yeah, you, you know, you had some lucky breaks like the, the AT&T deal but there was also. A lot of challenging times that you had to figure out how to, how to deal with and, and overcome and, and, and some decisions that you have to make, which is not always easy when you're, you're basically, you, you know, you're, you're, you're basically sacrificing your, your cow, right?

The, the, the, the side of the business that's bringing in all, all the revenue. So it was, it was really helpful just to understand like the decision making process and, and how you went through that and, and, you know, made those calls. Because I don't, I'm not sure we did it justice, but you know, when you're in the mid, in the trenches at the, you know, in the middle of that, it's, it's a really tough situation to be and it's not always as clear as, as it might be now when you look back and, you know, five, six years time and say, yeah, that was the right call.

So appreciate you doing that. If people wanna check out Duda. They can go to Duda.co. And if folks wanna get in touch with you, what's the best way for them to do that?

[00:46:47] Itai: I'm on LinkedIn Twitter, guess any of those or feel free to email me at itai[at]duda[dot]co.

[00:46:57] Omer: Awesome. Thanks, man. Appreciate you making the time and I wish you and the team the best of

success.

[00:47:02] Itai: Awesome. Was a lot of fun talking to you, Omer.

[00:47:05] Omer: Cheers.

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