Merge: How a SaaS API Startup Raised $75 Million
Gil Feig is the co-founder of Merge, a unified API platform that allows you to add hundreds of integrations to your app.
After experiencing firsthand the pains of managing integrations at previous companies, Gil and his co-founder, Shensi, decided to build a solution.
Before starting their business, they talked to around a hundred companies to research and get feedback.
Most conversations were pretty positive, but some feedback was harsh.
There were three companies where people told them they would never use the product and that they should probably give up on the idea.
The two founders spent 6 months building the first version of the product. And thanks to all those interviews, they landed their first 10 customers.
But as they tried selling their product to more companies, they quickly realized that they still had big obstacles to overcome.
Most companies were building their own integrations, and many of them weren't convinced they needed help or a product to make it easier.
And other companies weren't willing to trust their integrations to an early-stage startup that might not be around tomorrow.
Despite those challenges, Gil and Shensi have grown their business to multiple 7-figures in ARR, with a team of around 65 people, and they've raised almost $75 million in funding.
In this episode, you'll learn about:
- The successful strategy they used to set up those hundred or so meetings when many founders struggle even to get an email reply.
- The techniques they used to overcome objections from prospective customers who didn't see the value in the product.
- How they were able to win over big customers who initially weren't willing to use a startup to run their mission-critical infrastructure.
- How starting early with SEO and content marketing and doing that consistently over the last few years is now helping drive revenue.
I hope you enjoy it.
TranscriptClick to view transcript
After experiencing firsthand the pains of managing integrations at previous companies, Gil and his co-founder, Shensi, decided to build a solution before starting their business. They talked to around a hundred companies to research and get feedback. Most of those conversations were pretty positive, but some of the feedback was harsh.
There were three companies in particular where people told them that they would never use the product and that they should probably give up on the idea now. The two founders spent six months building the first version of the product, and thanks to all those interviews they'd done, they landed their first 10 customers pretty quickly.
But as they tried selling their product to more companies, they quickly realized that they still had big obstacles to overcome. Most companies were building their own integrations, and many of them weren't convinced they needed help or a product to make it easier, and other companies weren't willing to trust their integrations to an early-stage startup that might not be around tomorrow.
Despite those challenges, Gil and Shensi have grown their business to multiple seven figures in ARR where the team of around 65 people, and they've raised almost 75 million in funding. In this episode, you'll learn about the successful strategy they use to set up those a hundred or so meetings when many founders struggle even to get an email reply.
The techniques they use to overcome objections from prospective customers who didn't see the value in the product. We also talk about how they were able to win over big customers who initially weren't willing to use a startup as part of their mission critical infrastructure. And how starting early with SEO and content marketing and doing that consistently over the last few years is now helping them drive a significant share of their revenue. So, I hope you enjoy it.
All right, Gil, welcome to the show.[00:02:21] Gil: Thank you so much for having me. [00:02:23] Omer: Do you have a favorite quote, something that inspires or motivates you that you can share with us? [00:02:26] Gil: This is actually a quote I heard when I was young, and it's something I've really believed in my parents, you know, raised me and, you know, kind of beat this idea into me, but I think it's Thomas Edison said genius is 1% inspiration, 99% perspiration, meaning you got to put in the hard work, you got to sweat to get where you want to go.
Especially these days with so many startups and they're all competitive, you have to reasonably assume that everyone's working smart. So, you have to work hard if you want to win. And that's something that's driven merch since day one.[00:02:52] Omer: And a good reminder that even though you think you might have a great idea, there's probably a lot more to do than just coming up with that. [00:02:59] Gil: And probably a hundred people have had that idea before you. [00:03:02] Omer: So, tell us about Merge. What does the product do? Who's it for and what's the main problem that you're helping to solve? [00:03:07] Gil: Yeah, so Merge is, we build unified APIs for B2B companies and what that means is today's B2B companies need to offer integrations to their customers with a variety of different platforms.
But there's a lot of work to do, a lot of different integrations to build. And so let's say a company wants to offer HR integrations to their customers. They have to offer integrations with all the HR platforms because they don't know which one their customer might be using. But building, managing, maintaining 50 a hundred integrations requires a whole team of people and no one should have to do that.
So, with Merge, they integrate once with our unified API and once they've done that, they can offer 50 integrations or more to their customers. So, in some ways you can think of it as plaid, but for B2B companies, , and we offer integrations in a variety of categories. So, HR, payroll, ticketing, CRM, accounting and so on.[00:03:54] Omer: I watched a demo video that I think you created a while back, so you walk through the dashboard and how to set the APIs and everything. I don’t know how old that was, but it gave me a good sense of how to use the product and I've got to say, it seems surprisingly easy to use it and start building these integrations.
So, I guess that's what the whole idea was of building this product. So, give us a sense of the size of the business. Where are you today in terms of revenue? How much you've raised, size of team, customers, what can you tell us?[00:04:32] Gil: So, we're currently around 65 people. We have two offices and we're completely in person. So, we have New York and San Francisco offices. In about 18 months since coming out south, we have over 4,000 customers and we're at several million in revenue since our, from the time of our series B in the year leading up to that we more than 30X revenue. So, we're scaling really fast. It's been super exciting. Definitely faster growth than we ever had. [00:04:55] Omer: Yeah, and we're going to talk about what that 30x growth, what happened there. Before we get into that, let's talk about what you were doing before you started Merge. What's your background and. Did you always want to start your own company? [00:05:12] Gil: a little kid, I always said I wanted to be an inventor before I knew what an entrepreneur was. I definitely wanted to, but I wasn't just going to force it. The right idea had to come around. I had to make sure I had conviction on it. I had the right, the right co-founder in place and definitely felt prepared to do it. So, yeah, in college I minored in entrepreneurship, and I wouldn't say that it was, you know, basically going to set you up to start a business from day one, but definitely, you know, taught me a lot of concepts that, that I really followed when it came to Merge as well.
And once I had my co-founder and we came across our idea, which I can dive a little bit more into we decided to tackle and start Merge.[00:05:46] Omer: You were a software engineer. You were doing that for six or seven years before you started Merge your co-founder, Shensi, how did the two of you meet? [00:05:53] Gil: Shensi and I have been best friends since freshman year of college. We just, you know, stayed really good friends and then throughout the years we were in computer science classes together. And then senior year we were class president and vice president together. So, you know, I think we've had a friend friendly relationship and I would say we're still best friends, but at the same time, we've also had working relationships together.
We threw a, you know, wine tasting event senior year for 600 people, for $3 a person. So, we've been very resourceful. We've definitely tackled, you know, some big challenges together. So, we knew it would be right when, again we both came across this idea at our previous companies.[00:06:25] Omer: So, let's talk about that. So, how did you come up with the idea? Where did that come from? [00:06:29] Gil: Yeah. So, we had both done stints in, you know, different companies. Shei was working in finance, and I was in tech, worked at LinkedIn and Wealth Front, but then I joined a startup called Canvas. It's now called Untapped and it's a diversity recruiting platform. Led the engineering team there and while I was there, one of the big things we had to do was build applicant tracking system integrations or ATSs.
So, those are platforms like Greenhouse Lever, Workday. They basically helped recruiters and teams, you know, track candidates through the recruiting process. And at Untapped we had to build very tight integrations with them. Cause we were a recruiting platform and we had customers come to us. I'm on Greenhouse, I'm on Lever.
Great. We offered those integrations, but then we got more, and they run smart recruiters in Taleo and iSims and, you know, all these other ATSS that we just didn't have the time to build integrations with it. It was really stressful, and we were turning away customers as a, as an early startup, which is not ideal.
And then Shensi, my co-founder. She moved out of finance at some point to a cybersecurity company, , where she was chief of staff to the CEO and they had to build ticketing integration. Same problem, right? They would detect issues with security. They had to open those issues in their customers ticketing systems.
And so, they had to build integrations with the variety of platforms as well. And we realized we were in very different industries integrating with different industries, but fundamentally running into the same exact problems, organization. Wasn't just building them. It was pre-sales, post-sales, customer success.
It was everything, and it was bogging down the entire organization and blocking sales for both of us.[00:07:51] Omer: A lot of companies in that situation would build a Zapier integration and tell their customers, go, and use that, and. Zapier is not a competitor to you guys. They're different products.
But can you just explain that difference? Because if there's anybody else sort of thinking about, you know, what's the difference? Just help us understand that.[00:08:11] Gil: So, I would say the first big difference is Zapier is generally used for internal use cases. So, someone would set up a Zapier connection from one platform to another, and often, you know, a platform will offer a Zapier integration and then the customer themselves go in and build that integration with a platform within Zapier.
Merge's a bit different in that we help companies offer embedded native integration. So, you know, you go to their app marketplace, you connect your platform, and boom, it's just connected. You're not doing any work to do that. The other big difference is Zapier, in a lot of ways, it's just a, it's a workflow tool, and so you're building one by one integrations.
Merge's biggest value prop is that we are a Unified API, so companies just need to build one integration to us to offer 50-60 integrations depending on the category to their customers. So, if you were trying to accomplish the same thing with Zapier, you would need them to have, you know, a pretty robust embedded product that you could, that the actual provider themselves would build, and then they would have to build all the connections with 50 different platforms.
So, it's a lot of work. And then lastly, of course, these integrations are deep. They transfer a lot of data. There's a lot of, you know, custom use cases and things that need to happen. With a platform like Zapier, it tends to be a little bit more surface level and focus on, you know, can you transfer some data?
Not every single piece of data matters, and companies need to build integrations exactly as they want them to function.[00:09:26] Omer: You've answered that question before, haven't you? Because that was, you were very clear about that. [00:09:30] Gil: Yeah. I mean, from day one it was actually one of our biggest challenges was talking to investors and having them understand when the concept of a unified API.
Even now is very, you know, foreign to a lot of people. But two and a half to three years ago when we were talking to investors, they had no idea. So, our pitch deck had charts and comparisons between incumbent products. Even though we knew we were in no way competitive with them, it didn't matter. We had to convince other people. And so, yes, we worked on this language pretty heavily.[00:09:54] Omer: You see this problem and you and Shensi decide that you're going to go and solve it. How long did it take for you to quit your jobs and start working full-time on Merge? And what did you do when you came up with the idea, what did you do next? [00:10:14] Gil: You could say that both of our companies were essentially building something similar internally, it's not the same, but in general, when companies go to solve the integrations problem, they're building this sort of internal unified data model and then connecting all these platforms to it.
So, we, we knew that this would work. We knew it was going to function well. And so probably I would say it took us about six months from the time we thought of the idea to decide, all right, we're going to go do this right now. And that involved talking to probably over a hundred customers. Courtesy of the Lean Startup Methodology which we really love.
But it was all about validating your idea before you just dive in and just start building something that you don't know if customers are going to want. So, we were very confident that this was going to succeed. We knew we had product market fit basically from the day we started building the product, which was very lucky for us.[00:10:59] Omer: A lot of founders go out and they want to try and, you know, do something similar and talk to customers or potential customers and do the research. And they find it very hard to get people's attention or a reply to their email or let alone actually the time to have that conversation. So, how were you able to talk to, you know, roughly a hundred customers?
What did you do differently or why were you able to do that when you know, many other people struggle with that?[00:11:27] Gil: Yeah. It's all about your network. You have to utilize your network. We did the same for our funding as well, but essentially, we, we found target companies that we thought could use a product like merch.
We basically searched through product leaders, engineering leaders, and found anyone that we had mutual connections with and reached out to those mutuals and asked if they could get us an intro to that person, so we were able to pretty quickly set up a lot of calls. There were days where we talked to probably five different companies.
And again, it was all through the power of the network. I think expecting people to respond to a cold outbound to just give you 30 minutes of their time is a pretty tough proposition.[00:11:59] Omer: Yeah. So, that's a great point. I think sometimes we underestimate the value of a network. You know, you want to go out there and you want to talk to people, so you're like, how do I reach those people?
How do I build an email list? How do I cold email these people? And sometimes, just looking on LinkedIn, where you worked at LinkedIn, so, and who are my second-degree connections or even my third degree connections. You might be quite surprised who's out there that you can get an introduction to and start talking to and as you guys are proven, that’s a more of a successful approach to having those conversations.
I want to talk about one thing you said right from the outset, we felt like we had product market fit from those conversations. And I'm thinking you don't have a product yet, so how do you know you're a product market fit? What was happening in those conversations that made the two of you feel so confident that you were onto the right idea product there.[00:13:00] Gil: So, I think of course, it's tough to say we actually had product market fit. We knew for a fact; I would say we were heavily confident in that. And a big part of that was that, you know, when we were talking to these customers, they were like we have a whole team of people working on this.
We would pay you hundreds of thousands of dollars for your product, but unfortunately, it's just not possible to build what you want to build. And the cool thing was that both of our companies had built it internally, not quite the same way that we did it, but in a way that we knew it was possible. And so we were like, Hey, if people are saying they're going to pay a lot of money for this, they already have a team doing this, and we know that we're able to solve this problem, then we know that this is going to succeed.
And out of a hundred people I think, you know, my, my co-founder talks about this, but maybe three said, no, we are not going to use a product like this.[00:13:41] Omer: They said more than that. What did they tell you? [00:13:44] Gil: They said no one would ever use a product like this. [00:13:47] Omer: Didn't one of them say to you, you should probably just give up on the idea now? [00:13:52] Gil: Yeah, I mean, that was, you know, from so many different people. But part of that is perseverance. There's going to be haters and there's going to be people who don't believe in you. And you know, I think you have to take that with a grain of salt. And when three out of a hundred people say that it's just, it's enough for us to know that, you know, they're just not seeing what we're seeing. [00:14:07] Omer: Yeah. That's where the founder resilience comes in, you know, I think a lot of us struggle with that even with me with this podcast, you know, it's like get great reviews and people leave five-star ratings and reviews and it's the three-star that I notice and I'm like, I'm a failure. What did I do wrong?
You know? And you have to just, you have to just work through those and put things into context and but it's still got to be tough when someone's telling you should just give up on your idea.[00:14:38] Gil: It is tough, but I think you have to have resilience and also we kind of spun it into a positive, and that was, you know, if every single person we talked to said, this is the most incredible idea I've ever heard.
It would've been done already if it was so obvious and so correct. It we would've been way too late.[00:14:52] Omer: Were you both still working at the time when you went out there and were talking to people? [00:14:56] Gil: So, Shensi wasn't, and then I would in my free time, so, so kind of, you know, not during business hours.
It was really important to us to do right by our past companies, and so yeah, we did a little bit, but it was really, once we both left that we went full-time, you know, going hard on those conversations.[00:15:11] Omer: And when did you start building the product once you left? [00:15:14] Gil: We started building the product right about, what was it, may of 2020. So, just a few months into Covid. [00:15:22] Omer: Was that just you or does Shensi code as well? [00:15:24] Gil: Shensi codes as well. She is incredibly multifaceted. She was a computer science major in college with me, as I mentioned, but after school she went into finance, so she never coded professionally. But I think early on there's some business set up to do some strategy, some research, but overall, there was just a lot of time and me and Shensi are incredibly hard workers and so, Shensi just wanted to learn and I think it maybe took her all of the month to become a full stack engineer. Super proficient, was building full stack features and doing them well. So, yeah, it was both of us. [00:15:52] Omer: Awesome. You spend about six months building the product. What happened? Once you launched, did all those companies telling you we need this, we would pay for this. How many of them actually. Paid for it once, once you had it out there.
So, the answer is a I think from day one, a lot of them were into it.[00:16:15] Gil: The one-piece is, you know, with building integrations or any, you know, sort of product-facing feature in general, it has to be roadmap. And so I think a lot of them at the time were like, This is great, we definitely will start using it just not right this minute, but we had our cohort and we had, you know, out of the hundred we spoke with, which is such a large number that it still gave us, you know, probably 10 to 15 companies that were ready to start immediately. And those became our first customers. [00:16:38] Omer: And were you charging from day one? [00:16:40] Gil: We were charging from day one. I think we; we offered maybe a one or two-month closed beta to a few customers that we didn't charge for. But yeah, after that we, we started charging. [00:16:48] Omer: And what did you learn from those first 10 or 15 customers? I think you had mentioned that obviously building something like this is mission-critical and there's very little room for mistakes. So, six months building the product, you feel confident, but you're not going to catch every bug, you know, every problem. So, once these customers started using it, what happened? How smooth was that onboarding and kind of rollout? [00:17:22] Gil: It was hard at first. API integrations are just tough, which makes them a good business as well. But yeah, I think in our early days we had customers sort of onboard. They ran into bugs and one thing that we realized relatively quickly is that in engineering you want to be as proactive as possible.
You want to build a lot of tests, you want to have, you know, potentially manual testing, automated testing, making sure that you're running through betas and getting everything perfect. But with API integrations, because you don't control what, what's running in other systems, you have to be often inherently reactive.
And with that building processes, they'll let you be reactive, most effectively. And so for us it's all about, you know, being able to serve our customers and if anything ever goes wrong, be able to solve those issues within minutes because they have customers depending on them. And notably merges B to B2B.
So, we sell to B2B companies and that means our customers have sometimes, you know, multi-hundred thousand dollars contracts with their customers. So,, they expect absolute perfection from us. And when there's not perfection, they expect the world's, you know, top customer support. And that's something we've really had to build out.[00:18:24] Omer: Security is another thing that you told me was obviously that's super important. What did that mean to you? What was the, the challenge that you had to deal with specific to the product that you are building? [00:18:35] Gil: So, I think for us, we knew from day one we were going to be storing sensitive data. Our first categories were HR, payroll, and ATS. And when you're powering HR and payroll, and even at ATS where you have, you know, EOC or you know, equal employment opportunity data being stored for. All these end users or our customers' data, we knew we were going to need, you know, top security.
And so obviously we built everything, you know, with all of that in mind. But we also needed to be able to prove that. So, we went for SOC 2, ISO 272001, HIPAA, all of that over time. But SOC 2 we got before we ever launched to any customers because we just knew it was going to be so important. , and so we were seeking that as we were building out the product to begin with.[00:19:14] Omer: You quit your jobs, you've talked to, you know, a hundred-odd customers, which in itself, is a huge task. You are building the product and you raised your seed round of about four and a half million. At what point? That was about probably four months into the journey. So, we had built a prototype at that point.
It wasn't a hundred percent functional, but we had shown that it was enough to relatively work, but we also just had the feedback from all of the customers we had spoken with, and, one cool strategy that we did was. Because we had spoken to so many, whenever we talked to a VC, we tended to have already spoken to one of their portfolio companies about using Merge.
And so, we would pop those logos into each specific presentation, and those VCs had someone to go talk to and really get a detailed, you know, set of information about what Merge could offer to them and especially from a company that they trusted.
And how long did it take you to close that round?[00:20:06] Gil: It probably took us it, it was maybe a few weeks. The interesting part was because fundraising had all moved to Zoom, we were able to take a lot of calls in a day. And so there were days where we did, you know, eight to 10 pitches all just from my living room couch. [00:20:19] Omer: And you guys launched the business in the middle of the pandemic? This was like June or July 2020. Was that a good time or a bad time to be starting your company? [00:20:29] Gil: What's funny is, at the time everybody was saying this is the best time to start a company, a recession, or a, you know, some world pandemic that's happening. It's the best time. And I think for us we were just so early into the pandemic that it did make fundraising a little bit challenging.
You know, I think VCs were getting ready to deploy capital, but it was still a bit early, and things were still a bit unknown at the time, but we did end up raising. And you know, a big part of that again was having all the customer references and everything that we needed.
We also think of Covid as an incredible time to build a company because the world was shut down and all there was to do was for us to build. And we were an in-person company. We were together in the office. We were so small that we just wore masks and, you know, we were sort of, you know, obeying all the laws.
But it was a chance for us to get out and be together. And with that, you know, it helped us just really build and just be united as we, we built the product together.[00:21:15] Omer: So, you've raised the seed round. I think about a year into after you'd launched, you were at about 30, 40 paying customers and you were on track to hit your first million ARR by the end of that year.
Is that from my research anyway? I remember hearing you say something like that, that you felt confident that you were about to get that. So, did that happen?[00:21:35] Gil: Yeah, so we've far exceeded our revenue goals every time we've set them, which has been really exciting. [00:21:40] Omer: That's impressive. So, did you just lowball the estimate or why do you think you exceeded that goal? What happened? That got you beyond where you expected to be? [00:21:50] Gil: I think setting goals early on when you don't have any historicals is tough. And so, for us it was kind of, you know, based on our current growth, what are we thinking we're going to hit? And that growth just continued to increase.
And so with that, we exceeded our goals and there's a lot of reasons for that we can dive into, but, word of mouth was spreading out, you know, we were showing up in other customers products. We started to really build trust in a brand in the market. And that just really accelerated our growth.[00:22:13] Omer: So, let's talk about some of the challenges of trying to sell the product.
So, far it's looking good. You know, you've done your homework, you've talked to, you know, you've done the Lean Startups thing you've leveraged your network and you've got the seed round. So, things are looking good, and you've got initial customers. What was one obstacle you faced when you tried to sell to other customers and keep growing the business.
I know there was one thing that you struggle with in those early days repeatedly when you had these conversations. So, tell us about that.[00:22:44] Gil: Yeah, I think in a lot of ways it was convincing people of the value that Merge was providing how we were solving the problem.
Because a lot of engineers have never built integrations, but they understand APIs and to them, the challenges isn't that tough. And in the early days of founder-led sales, when it was me and Shensi just selling our product, we were able to talk about that. We had lived through it; we had experienced it.
We could give concrete examples of, you know, how we had felt the pain. And I think as time went on, when we added AEs and we built out a sales team, it was really important for us to build a repeatable motion because the. We had customers coming to us and engineers saying, oh, I can do this. I've built out integrations before, not understanding the complexity of a B2B integration with millions of rows of data being transferred and getting one thing wrong, causing payroll to run incorrectly, you know.
The actual criticality of this was insane, and, and so we had to build out, again, all of those materials, really be able to convince our customers and show them the problems they were going to encounter before, before they ever did. And we always like to say our best customers are ones that have tried to build at least one integration before because they've lived through the pain and they never want to do it again.[00:23:45] Omer: Yeah. And it's not just building the integration, it's maintaining it and supporting and dealing with all the problems that go on. And that was something you experienced in your previous roles? [00:23:55] Gil: Oh, yeah. I think we say that building is 20% of the problem. Maintaining is actually the hardest part. And it's not maintaining in the sense that people always say like, oh, the APIs might change, and you have to do that. You know, I think it's pretty well established in the world that making backwards and compatible changes to an API is not acceptable. You don't see it happen super often. , but what you do see happen is, you know, you build this integration with your demo account all works.
It's going well, but then you go and you onboard an actual customer and the data looks completely different, and then you onboard another customer and that data looks different. And there's edge cases and weird things that pop up. And the way that surfaces in a company is, you know, all right, our integration's done.
Our team has moved on to the next roadmap item. But nope, engineers, stop what you're doing. Get right back on that. Go dig into the problems, but do it with a lot of pressure too, because your customer is banging on your door to, you know, saying – We paid you because you said you had a working integration”, and you don't, and so you're stalling. You're not able to support your customers. You're probably experiencing churn. The pain is so, so bad beyond just building out that initial integration.[00:24:55] Omer: Now, from our earlier conversation, I think of it as like two categories of customers that you were getting objections from.
There was the one that we just talked about who felt like, Hey, we can do this ourselves, and why do we need a product like this? So, I want to talk a little bit about what you did to overcome those types of objections.
And then you had another category of prospects who were basically like, we're a massive company. You guys are this tiny startup. How can we possibly trust you to run our business? So, I want to talk about both, but let's talk about that first group. So, you, you've heard these objections. They're feeling like, hey, we can do this ourselves, or why do we need a product like this? So, when you started getting those types of, that type of feedback, what did you do to address that or overcome them?[00:25:48] Gil: Yeah, I think it's a mix. So, for some, we were able to just give actual examples of what we had experienced in the past, what we saw at our previous companies and how we got through it, and I think that worked for some companies, but there were others that continued to object and, you know, this is easy, I'll do it.
And we found just letting people go try to build it was the best. They always come back; you know? And so, for us it was like, hey, go try it. Don't let us just tell you it's tough. Go do it. Go figure it out on your own and you'll be back.[00:26:13] Omer: That's one way to do it, and I'm sure a number of them came back once they deal with those issues.
You also created a bunch of like collateral, didn't you, to try an. Help with the sales process, right? So, what were you kind of putting in front of these customers?[00:26:27] Gil: Yeah, it was a lot of collateral just around, you know, putting a dollar cost on what was actually occurring and also trying to really help them understand the pain that comes afterward.
So, it had some examples of things that can go wrong. I talked about how a lot of our tooling helps people solve you know, some of the deepest problems like, you know, problems, bugs coming in from your customers or connections failing and how engineers have to be pulled off. And I think that rang true for some of our customers, who had semi-experienced it before.
And for those that didn't, it was sort of a good example and a good way for them to just understand, you know, how they could do that. And we talked about all the tooling that Merge offers that lets customer success and support teams actually do what engineers would typically do when it comes to debugging those integrations, all just using, you know, merges vast toolset that's there for them.[00:27:10] Omer: And in those early days, apart from you and Shensi, like who else was on the team? [00:27:15] Gil: In the early days, we had I would say mostly, engineers. They were our first hires and design were always really important to us from day one. We think just because we're an API product it's no excuse for having poor design. And especially because onboarding is a huge part of our product.
Docs are a huge part of our product. We think of those as first-class citizens. And so we spent a lot of time on design as well.[00:27:34] Omer: And that was the one thing that I liked. I mean, when I looked, I don’t know how old that design was, that I looked at the dashboard, but it was like, this is pretty. neat and very easy to understand for me it's like when you go to like Amazon documentation and you know, trying to use interface, it's like that gives me a headache.
Right? So, this is kind of like pretty user-friendly. So, I think more companies should be investing in design and I'm not a designer, so, but I'm just saying that because I think it's important.
Let's talk about some of the things you did around marketing. So, the first two years I think growth was organic. You guys weren't really doing much.
You've just told me that the team was just design and engineering. So, you two are basically doing sales and building the product and everything else. So, the first couple of years it's mostly organic growth and word of mouth and so on. What else? Actually, before we talk about beyond that, there was one thing I remember I, I heard you say that you were doing in the early days that when you would get a new integration set up, you guys had some kind of thing that would generate content.
And publish it out on social media and you know, all this stuff almost automatically. So, what exactly was that? How did you set that up and? Did it actually work?[00:29:05] Gil: Yeah it absolutely worked. , anytime we publish a new integration, we automatically generate landing pages social, you know, the meta images that appear.
We were generating a ton of different material and very SEO optimized and it was pretty quick. I think whenever we launch an integration it takes a matter of maybe a couple weeks before when you search for, let's say, just works API or Workday API, it takes maybe a couple of weeks from us publishing that to the time where that becomes a first page Google search result. So, it's definitely been a big driver of growth for us.[00:29:34] Omer: So, how did you automate that? What did you do? You just put in like, here's the new integration, and here's a bunch of like, You know, additional information, and then run some code and it would just generate these pages for you. [00:29:45] Gil: Yeah, so, so on our side, whenever we build a new integration, we do things like, we put in the integration name, we put in how we authenticate images, highlight colors, all of that good stuff.
And as soon as we change the status of integration, we sort of have an internal representation. So, as we change that to publish. All those pages just get generated by the systems that we've built.[00:30:03] Omer: Do you still do that? [00:30:04] Gil: Do we still auto-generate pages? Yeah. We absolutely do. It's been an incredible driver of growth for us. So, yeah, we plan on continuing that. [00:30:11] Omer: Well, you have to now, right? Because I mean, in, those early days you didn't have that many integrations, right? And today you've got what? Hundreds? [00:30:20] Gil: Yeah, hundreds. [00:30:21] Omer: Oh, you could always hire a full-time person to do that, right? Which wouldn't be… [00:30:24] Gil: Yeah, but look, if we can build it once, or in the early days, it didn't take that long, and all we could do was work because it was covid.
So, you know, I think I personally built that late into the night. One night. It took me one night, and now it's run for hundreds of integrations, and it'll continue forever with us. So, we definitely invest in scalability and automation.[00:30:41] Omer: So, SEO is one of the big drivers for you in terms of inbound. Is it mainly those pages that are still now paying off in terms of driving traffic or was there something else you did in addition to that? [00:31:03] Gil: Yeah, it's that it's also content marketing has been really powerful for us. It's something we started a little bit later in our journey, but we definitely have now have a lot of content that is also, you know, first-page search results for some really key search terms that we value. [00:31:16] Omer: So, you've got SEO content marketing, big driver. You do outbound, is that also a significant, you know, driver of revenue or is that something that you're still developing? [00:31:29] Gil: Yeah. Outbound is a, it's becoming a more significant driver of revenue. We always want inbound, since it's an automatic motion, we always want that to continue growing as well.
But yeah, we've started doing more outbound. We also, again, utilize power of our networks to get into some larger companies. So, yeah, it's a solid mix of both.[00:31:45] Omer: So, you raised, I think it was October 2022, you raised your Series B which was I think $55M. So, you guys are at now $74.5 million in total.
And one of the things that you announced at the time was that, hey, we've raised our series B and in the last 12 months, A RR has increased 30x. Now, if you were at like $10, or 12 months before, that’s not so interesting, but we know you weren't, right? So, we've already talked about ballpark, where you were in terms of revenue, and so it's a multiple seven-figure business today. What drove such a big group, 30x increase in, in that 12-month period.[00:32:37] Gil: It was a mix of usage and more customers coming on board. In our early days, you know, we had smaller companies, you can naturally charge less. They have lower voles. But we built a reputation by signing with them and by serving their customers effectively.
So, me of our customers who we were within the early days, Drata for example. Incredible early customer for us and worked very closely with us. They grew massively and that helped us establish our brand, you know, kind of alongside them. And that helped us move on and sell to larger and larger companies and that helped drive, you know, revenue growth.
So, I would say it was larger companies and it was more customers that were, you know, sort of, you know, using more vole that, that ultimately drove our growth.[00:33:11] Omer: Adding the logos, the more logos you add, the more proof and credibility you are building. Drata being a good example of that. What about some of the bigger companies, the ones that basically said, we can't rely on you.
I've seen some logos on your site now, which are some pretty big companies. At some point they came back. What was different this time? Why did they feel confident?[00:33:42] Gil: Yeah. I think in our early days we would get on calls with larger companies, and they didn't even, it almost felt like they didn't care about our product or if it worked and it was more just focused on how many people are you going to be around, you know, are you going to even survive?
Because we are core infrastructure and no one wants to build on top of us and then have us go under, get acquired and force them to get out of there. So, I think in the early days we, we had a narrative, you know, we are not looking to get acquired. We want to build big company here that helps, you know, companies integrate with all platforms, we're not going anywhere.
But I think it was the continued fundraising rounds and just serving larger customers that helped them build comfort. So, having those logos on our site has definitely helped. You know, and now for this year, our is to just move up even more as we, we continue to, you know, serve larger customer with higher security demands and who need more, more sort of affirmation from us that we're going to be around for years to come if they're going to rely on us to power all of their integrations.[00:34:32] Omer: Yeah, I mean, that's a tough thing. Every startup I think, faces that kind of challenge, especially if you become a huge dependency for your customers that how can they trust you? How can they have that confidence? And obviously now where you are in terms of the logos and how much you've raised. I think people have more confidence that you are going to be around.
Tell me about the three companies. Don't gimme names, but the three companies that you know, when you were doing the, talking to a hundred customers that told you. They would never use your product and you should give up on your idea what happened with them?[00:35:07] Gil: So, eventually all three ended up signing with Merge and that was just really exciting to us.
It was it's hard to forget customers, you know, in the early days who tell you that your idea's not going to succeed. And especially because, you know, some people they can go in and say, look, I might not use this, but it's interesting. But these were harsh feedback to us. These were people telling us, you have a bad idea, do not go forward with it.
And so I think when the third one finally signed for us, it was validation that we had moved along the right path and we had built the right product for our customers. , and what, what it really took for them was just seeing that their competitors were using us and were offering, you know, 10, 20, 30 times more integrations than they were overnight.
That's a nice way to, to wrap up on the story. And you're right. When you get feedback like that, you don't forget that. Okay. Let's get into the lightning round. I've got seven quick five questions for you. Just try to answer them as quickly as you. You ready?
Yep.[00:35:54] Omer: What's the best piece of business advice you've ever received? [00:35:57] Gil: Probably the hard work front. We have to work hard if we want to win. [00:35:59] Omer: What book would you recommend to our audience and why? [00:36:02] Gil: I like the Lean Startup. It really drove our methodology and I'm a big fan of that. [00:36:05] Omer: What's one attribute or characteristic in your mind of a successful founder? [00:36:08] Gil: Perseverance. [00:36:10] Omer: What's your favorite personal productivity tool or habit? [00:36:13] Gil: Definitely, you know, using keyboard shortcuts for everything. You should always be using shortcuts, minimize mouse usage as much as possible. [00:36:20] Omer: What's a new or crazy business idea you'd love to pursue if you had the time? [00:36:24] Gil: I really like e-commerce and I have some really interesting ideas in that front, but right now fully focused on Merge. [00:36:30] Omer: Of course.What's an interesting or fun fact about you that most people don't know? [00:36:33] Gil: Yeah. I got a cease and desist letter from Facebook when I was 16 for coding. So, me things that were a little bit against their terms of service, but of course had to stop once I got that. [00:36:41] Omer: That's a good one.
And finally, what's one of your most important passions outside of your work?[00:36:44] Gil: I really enjoy fitness all sorts of workout classes and anything to keep me active. [00:36:48] Omer: All right, great. So, thank you for joining me today, Gil. If people want to check out Merge, they can go to merge.dev. And if folks want to get in touch with you, what's the best way for them to do that? [00:37:00] Gil: Yep. You can just email me, gil[at]merge[dot]dev or connect way me, Gil Feig on LinkedIn. [00:37:06] Omer: Thanks, man. It's been a pleasure. Congratulations on what you guys have achieved so far and I wish you and the team the best of success. [00:37:13] Gil: Thank you so much. Appreciate it. [00:37:15] Omer: Cheers.
- “The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses” by Eric Ries