Freemium SaaS Pitfalls That Slowed Qwilr's Growth by 60%

Omer (00:10.000)
Welcome to another episode of the SaaS Podcast.
I'm your host Omer Khan and this is the show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business.
In this episode I talk to Mark Tanner, co founder and COO of Quiller, a SaaS product that helps you create design perfect proposals, quotes, client updates and more.
The story starts in 2013 with a designer slash developer named Dylan.
He was running a micro agency and found himself wasting a lot of time creating proposals.
Like any self respecting designer, he wanted to create beautiful proposals, but that meant a lot of work and back and forth using Word, Excel and Adobe InDesign.
So one day out of frustration, he created a website as his proposal doc and sent a link to that.
Not only did he get hired, but the client loved the website proposal and was so impressed by how quickly he'd built this website for them.
And that's how the idea for Quiller was born.
Dylan and Mark teamed up and decided to give this business a try for a couple of months.
They wanted to learn if they could find their first 10 customers.
In this interview, you'll learn how they turn that two month experiment into a business which now has 45 employees, they've raised seven and a half million dollars in funding and they have around 3,000 companies as customers.
We also talk in depth about the pros and cons of a freemium business model and you'll learn about the mistakes, fail and successes that Qwilr had with their freemium plans.
We also identify some important considerations you have to make before choosing a freemium model and how you can avoid making some of the same mistakes Dylan and Mark did.
So I hope you enjoy it.
Mark, welcome to the show.

Mark Tanner (02:09.300)
Omar.
My pleasure, thanks for having me.

Omer (02:11.380)
So do you have a favorite quote?
Something that inspires or motivates you or just gets you out of bed every day?

Mark Tanner (02:15.780)
Yeah, so I've actually had one on the mind of late, which is I was recently listening to another podcast with Mike Cannon Brooks, one of the founders of Atlassian, who obviously I'm based in Sydney.
They loom large in the startup ecosystem here and I remember seeing Mike speak.
This is very early in our journey at quila, sort of 2015, before Atlassian's IPO.
He was giving this talk to local startups and he just sort of had this moment where he was like no one knows who Atlassian is and no one knows what we do.
And he was just like sort of had this sort of talk about they'd already, by startup standards had huge amounts of success.
I'm not sure if they were a unicorn status yet, but if not very close.
But he was just talking about how large the market is and how gigantic it can be.
I'm going to cheat a little bit here and drop in a second quote, but one of the ones that I think that sort of thing.
At the same time I was starting to read a bunch of the Lemkin Sasta blog posts.
I remember reading his one about 10 customers is impossible.
But if you can get there, you can definitely get to 20.
And if you can get to 20, well you can definitely get to 50 and 50 to 100 and on and on.
I do think that as we've grown and clipped through 500 customers, 1000, a few thousand, on and on.
I think that there's this nice thing I keep coming back to which is like we in our little world feel like we've, you know, we've had a modicum of success.
No one knows who Quilr is.
You know, there's such this long way to go and even now that Atlassian, I think if you ask a normal person on the street, they'd have no idea who they are.
And I think just the size of the market that's available to you and sort of the confidence you need to have that you can keep going and growing and sort of, sort of moving along is something that has always, you know, I think inspired me and sort of pushed us to sort of, you know, keep going and keep dreaming and keep thinking about how can we continue this journey.

Omer (04:13.600)
Tell us about Qwilr.
What does the product do?
Who is it for and what's the main problem that you're helping to solve?

Mark Tanner (04:21.920)
Yeah, sure.
So Qwilr is a way for sales and marketing teams to create all of their customer facing collateral.
So think proposals, quotes, pitch decks, presentations, all that sort of stuff, even contracts but to create that as web pages rather than PDFs or PowerPoints.
And so the problem that we're solving for is a few and I think one of the big things that we sort of really believe at Qwilr is that really in the power of the web and also that documents, file based documents suck in the age of the web.
And so really the problem we're solving for is these file systems that were built, they were all built pre web just really aren't interoperable with how the rest of the web works.
And also they're sort of not designed for whether it's you think about mobile Friendly world, et cetera, but it's not designed for this sort of modern space that we're in.
And so the problem we're solving is one of how in this modern space should you be communicating with your customers and what can the web do to sort of actually really allow you to have a lot of leverage on that side and so sort of, you know, to dive into it in a bit more specificity.
And obviously, when I say marketing and sales teams, we're very much B2B focused, got a lot of customers across professional services, across SaaS, across software, tech, IT, et cetera.
But really when you sort of look at what people are sending out, whether it's PDFs or proposals, proposals in PowerPoint and things like that, you have this space where there's no ability for the customer to interact with it.
So like within Qwilr, your pricing can be interactive, sort of much more along the lines of E commerce.
So your customer might say, let's say you've got a package of gold tier, silver tier, bronze tier.
You might say, well actually I want the silver tier and I don't want this optional extra, but I do want this one And I want 14 of them that should just like live update the price in real time.
You can then accept E sign payment on any device.
For qwilr, we know that half of the views of Qwila pages all around the world, it's actually just under half, are viewed on mobile.
And so we're very much optimized for mobile.
You can accept, sign and pay on any device.
And then of course that then syncs up with all your sources of truth immediately because it's in the cloud.
It ping Salesforce and says, hey, this deal's closed, ping customer success, etc.
It starts workflows there.
It might sync up with zero and say, hey, there's a new deal here.
And it might go and ping the sales Slack channel and be like, woohoo, we just closed this deal.
And so being able to sort of bring files truly into this sort of modern SaaS cloud world as well as I think obviously trying our best to make them sort of use the beautiful design tropes of the modern web really is what we try to do every day.

Omer (07:07.950)
Okay, so the company was founded in 2014.
As of today, you've got a team of about 45 people, 3,000 companies as customers, and you've raised about seven and a half million US dollars.
So I want to start the story from before you launched the business.
Where did the idea for QWILR come from?

Mark Tanner (07:33.330)
Yeah, so the idea came from my co founder, Dylan.
And so Dylan had this little micro agency.
You know, he was a software developer and designer.
He's also just a very creative guy.
He'd had a band and done some interesting art and other stuff.
He and I have been friends since we were in high school and I'd sort of gone and seen his band played and they toured the states and done a bunch of other cool stuff.
But of course the whole way through he was actually paying for it all by being a dev and designer.
So Dylan had this micro agency and he was doing some pretty.
He was being like an outsourced resource for like companies like Saatchi and Saatchi Ogilvy, various other sort of groups like that.
And he had this pain point around proposals really, which was he would do his pricing in Excel, he'd do his copy in Word, he'd move them both into InDesign, he'd send it to the client, the client would want all these changes, he'd have to rip it all apart because InDesign, it's terrible like that, start from scratch.
And he just sort of like, he's like, this sucks.
It's so long, it's so crap.
And he just, out of frustration one day just decided, I'm just going to build a website for this.
And so he built a website for his proposal, which this is back in 2011, 2012.
And he won this first of all.
He won a particularly huge job out of it that he didn't think he had a chance at.
He just started being like, you know what, what I care about as someone who lives in this modern economy is actually producing something that looks excellent, that is digital first.
And that's sort of where the idea started.
And so he ended up basically hand coding his websites and slowly but surely first via a series of bash scripts and then later by like a little bits of micro product, he started building out a system where he could sort of push out one of these websites rather than in days do it in a few hours.
And so the turning point for him came he had this pitch for Versace and Saatchi New Zealand and the MD there, they spoke in the morning, he sent them a proposal a couple hours later and the MD there called him, was like, how the hell did you send us this beautiful website as your proposal a couple of hours later?
Is this the product?
How could we use this?
And initially, so Dylan had a product, software product business when he was a bit younger that went somewhat disastrously and so he was very against the idea of another product business.
But the more he thought about it, he sort of spent a lot of time sort of thinking about it.
I think the more excited he got by it.
When I became involved, I was looking to leave Google, looking to move back to Australia for a girl who's now my wife.
So that was a great move on my behalf, but I was very much looking to rejoin the startup ecosystem.
I've been in a startup pre Google, and when I met Dylan, there was a few lucky things that happened for us.
One of them was that I'd been in sales and just immediately saw just how much better this would be.
We'd been using Google Docs and a bunch of other tools inside Google and they just sucked for this process that became very exciting.
The other part was there was a bunch of people at Google Sydney who'd been working on this product back in the day called Google Wave.
And I don't know if you remember Wave, but Wave was meant to be the sort of future of communication and collaboration.
And, you know, if you were kind, you might say it was, you know, had some tiny elements of clever things that Slack did later.

Omer (10:48.439)
Another one of those products that came out with a big bang and then sort of fizzled out pretty quickly.
Right?

Mark Tanner (10:53.640)
Seriously.
Seriously.
And look, this was, you know, this was built in Sydney when I was in Google Sydney, before I went to New York.
It was such a big deal because we only had like, Google City was like maybe 150 people at the time, of which 50 people were engineers working on this project.

Omer (11:08.930)
Wow.

Mark Tanner (11:09.410)
And it was led by Lars, who founded Google Maps and had done an amazing job there.
And the Wave was technically unbelievable, but never found its product market fit.
The thing that was lucky for us was that one of the lead engineers there, who was a friend of mine, Dan, had been the lead, like, he'd sort of done all their work around their text editor.
And actually back in the day, creating a content editor in the web was actually really.
And it still is actually.
It's a very, very challenging thing to do.
Well, especially to have a beautiful.
What you see is what you get editing experience.
And so Dan, I introduced Dan and Dylan and Dan was so impressed with what Dylan had built that he ended up joining our team in the early days and sort of helping us, helping us build out that editor experience.
We were using a beta version of Angular at the time when we were first building it out.
And Dan had even written a little framework and a little library to help solve some issues around Dependency injection, all this other stuff that actually made it possible for us to get going.
The problem was there.
I had felt it visually myself, as had Dylan.
Dylan had built this beautiful first version of it and we were just lucky enough to find some really strong technical talent to sort of overcome some very, very real technical problems that existed back in 2014.

Omer (12:28.920)
So at what point did it become a business?
So you said that Dylan was resistant to do this because of a bad previous product experience.
And for every success story there's always some one of those disasters hidden away in the closet somewhere.
But what was, at what point did, did this become a business?
Was it just driven by that first client asking about using this product?
Did other things happen?
Did you guys go out and start talking to other people to really make sure that this thing had some legs?
Like, how did that happen?

Mark Tanner (13:04.300)
Yeah, so, so this all sort of nicely coincided with.
So I just moved back from, from, from New York and I, I was sort of looking around and Dylan had built out this first prototype version.
He'd actually.
Sorry, it was his second prototype.
The first prototype version was basically a WordPress ish version of this, which he quickly decided just wasn't good enough.
And it really did need to be a beautiful.
Again, just what you see is what you get.
Editing experience.
It's very simple and clean.
And so he sort of scrapped it all and rebuilt it from scratch, which I always, to be honest, just had enormous respect for.
And I think that the way we started, I think a lot of startups start this way.
We just were like, look, I've just moved back, I know I want to work in a startup.
I think this is a really interesting idea.
Why don't we just work for free for a few months and see what happens?
While Dylan kept building, my entire job was around validating the idea and getting it in front of as many people as possible and just testing it out, seeing what they thought, trying to make some little improvements here, getting feedback.
We'd had a few friends who were a friend of ours who was a PM at Atlassian, some other people who were doing some work at Canva.
Again, they were very early at the time, but just trying to get feedback and thoughts on how to be better and then also going to speak to potential customers and like, you know, I think we heard a hell of a lot of no's in those early days.
I once drove, you know, like about 45 minutes just to have like a half hour coffee with someone and show them the product and then drive back and actually they're still a customer today, which is awesome.
They sort of eventually converted, but, you know, I think we sort of really did have a period of time of validating it.
And after about three months of, or not even three months, I even said two months of work, we were both like, this is real.
This is something we should actually commit.
And at that stage, I tipped in a little bit of money, not very much, like 20 grand or so.
And Dan also put in a little bit of money, the engineering friend.
And then Dylan tipped in all of his IP and we sort of went to the lawyers and actually sort of properly kicked it off.

Omer (15:01.410)
So you've got the basis of a product.
It feels like this is real.
You're getting no's, but you're getting enough yeses to keep you moving forward.
What did you do to get those first 10 or 20 customers?
Let's talk about the first 10, because that's the number that you said earlier and that Jason had talked about and being the impossible numbers, how did you get to the first 10?

Mark Tanner (15:22.990)
Yeah, so the first thing for us is, look, we put out a free version of the product and just reached out to anyone and everyone that we could, that we knew, and also just did a bunch of cold calling in various spaces.
One of the things that happened relatively quickly for us was that one of our friends who we'd reached out to was a video producer.
This is a very small thing, but the ability to embed content inside web pages is obviously meaningfully different than the experience on PowerPoint or PDF.
If you're in video production and being able to embed a few of your example videos, or potentially if I was doing it today and you're in podcasting and you could embed a few of your podcasts inside your proposal, that was a big deal.
And so I think one of the things we sort of found was, okay, here's this tiny little niche that has this particular pain point that we hadn't necessarily solved.
All of the clever embedding things and some of the things that are the most popular embeds for us now, to be honest, things like calendly and other stuff like that for sales teams.
You're able to book more meetings weren't really invented, but video was always a very powerful part.
We just started just pretty much, to be honest, cold calling and introducing ourselves and finding anyone who could refer us into anybody on that side.
And that was like one of the first little areas we found a nice little niche into.
But then also, as I said, we had a freemium product so we did get a little bit of nice traction through that.
And we have a product that is lightly viral.
So, you know, every time you send a Qwilr proposal out to somebody else, it's, you know, it might be, you know, the saspodcast.qwilr.com and just that little URL or a little badge on the page would lead them back to us.
We found that, and then really we just spent a lot of time hand holding those early customers, giving them as excellent customer support as we possibly could, just trying to help them have a great time with the product.
And that's really sort of become a mantra for us as we grew.
So those were sort of.
That was the important parts as we went to that first 10.
And I do remember when we hit, I think it was whether it was 10 or 20, but there were 20 sort of unaffiliated people who we'd never sort of met before this journey started, who were paying customers.
And look, they were only paying us, I think, maybe 20 bucks a month at the time.
It wasn't anything huge, but it did sort of all of a sudden suddenly feel quite real and quite possible.

Omer (17:42.460)
So let's talk about freemium, because I know you guys have had a sort of love hate relationship with it as well, and we can talk a little bit about that.
But the freemium model is.
It's appealing when you're starting out because, you know, there's like no barrier to entry.
Anyone can sign up, it's easier to get people signing up and, you know, at least becoming a user.
But there's also a lot of downsides that, you know, number one, there's no guarantee if they're actually going to use the product just because they signed up.
How do you monetize free users into paying customers?
How do you deal with, you know, hundreds or thousands of free users who are never going to become customers, yet you still have to support.
So.
So there's, you know, there's a whole bunch of, you know, pros and cons here.
And freemium comes with a lot of challenges that I think people don't always think about because they think about, well, it's going to make it easier for people to.
To get in and use my product.
So what was the thought process you went through and what have you learned from that?
Because you've sort of used freemium, stopped using it, tried it again.
What are some lessons we can learn from your experience?

Mark Tanner (18:56.930)
Yeah, for sure.
And I think everything you've said is true.
And I'd say on the Sort of, you know, the appealing side.
It was sort of doubly true for us because of that light virality that we had.
We kept being like, wow, look at all these leads.
Like everyone who came in from viral as a channel, I mean, where the first thing they saw of us, the first touch point we had was someone sending them Aquila page.
When they arrived on the website, they converted to sign up at a far better rate.
They converted through activation at a far better rate.
They converted through to customer at a far better rate.
And that's still true today.
So we're like, wow, well how can we supercharge that?
And one of the things you come back to is like, let's make it free and sort of push that out.
And so I think that from our side, freemium is a look.
We are still enamored.
We don't have a free product currently.
We're still enamored with the model.
And we do constantly have sort of discussions and debates about it and whether we should be diving back in.
And I'm sure at some stage we will again.
But I think the thing that sort of happened for us, so in the first instance, we sort of moved away from it.
First one was, you know, we were friendly with some people at Intercom.
In fact, one of our advisors is Matt Hodges who used to to run marketing at Intercom.
And I think they'd had a pretty compelling thing around.
You know what like this sort of putting like this 14 day trial and having like this sort of hard conversion event actually sort of drove some value for them.
So we sort of experimented with like, what if we turn again?
We were learning, we had this good experience with Free to get going.
We're like, well, what if we turn that off and just did a 30 day trial?
And we're like, ah, you know, conversion improved quite nicely and we sort of moved to 14 days and actually conversion improved even again in a sort of very marginal sort of sense as we sort of, again, I'm saying this with like 2020 hindsight now we'll come to the mistakes we made later, of course.
And the sales cycle was obviously faster and stuff like that.
And so we sort of started going pretty well.
But then as virality became more and more important to us and we started having a little growth team, part of our biz ops team, who ran growth for us for a long time and still do run some parts of our growth, they started exploring, okay, well how can we do better at this?
How can we supercharge it?
We were lucky to we have a close relationship with the team at Typeform and Robert from Typeform is one of our investors.
And we were introduced to Pedro, who ran their growth engine.
They have a real viral loop.
And so we sort of were trying to perfect all the parts of that loop, different conversion points there.
And to be honest, we did an excellent job at the core parts of it.
The real issue for us was as we sort of went back to freemium a bit later on was we were growing at like a really nice rate.
We were growing at well over doubling a year.
We were sort of.
I don't think we were quite at tripling at this point, but maybe we were actually.
We were growing at a very, very nice clip.
And this is in terms of revenue, revenue growth.
And when we turned on freemium, a few things happened.
So the first thing was that virality went up and like went up like quite significantly.
And we actually did manage to get like quite a lot more users.
We did a few other little things, like we sort of back in the day when it was easier to sort of get attention on product hunt and do well there and get a lot of leads.
And so we did that and a few other things as well.
We actually, we got a fair bit of traction.
But then as we sort of kept going on, this funny thing happened across a few different areas.
So one part that perhaps shouldn't have been a shock, but one thing that happened was virality went up, which was great and we were very happy with that.
But our sales, obviously our sales cycle elongated quite a lot.
So with a 14 day trial, our sales cycle was like, I think 14 and a half days was our average conversion time.
And then all of a sudden that blew out to something closer to 60, which I think had an impact on velocity and speed and also just even things, little things like confidence of the team and very micro inside sales team at the time.
Then we had this other part which was like activation, which actually was by far the biggest problem because our activation didn't fall off a cliff, but it dropped pretty significantly.
There is a little bit of Magic With a 14 day trial in that if you go.
And really this tacks back to the very first interaction.
But if you know that you've only got 14 days, the amount of time that you spend in the app in that first instance, just clicking around, trying to make it work, trying to figure it out, see, is this going to add value to my life?
That time in app, actually when we have a 14 day trial is a bit over 50% longer on average.
People spend a bit more time because they're like, oh, I've only got 14 days.
I really better, rather than taking spending 15 minutes, I'd better spend 20 or 25 in here trying to make this work.
And that extra bit of time is so important in a few little things clicking in their mind and this understanding forming and allowing them to get to this space where they can really get to.
Wow.
Get that sort of first moment of, oh, I see how this could have a big impact for me.

Omer (23:58.200)
And what was that for Qwilr?
Was it getting to the point where they sent out a document or they got to a point where they had created a document that they were happy with?
Where were you trying to get them to for this activation?

Mark Tanner (24:14.280)
Yeah, so activation for us is a third party viewing a document that you've created.

Omer (24:20.930)
Got it.

Mark Tanner (24:21.970)
The magic for this is.
And this is a very simple, small thing, but the magic is that you get a notification for us.
If you send me a Qwilr page, as soon as I open it, you'll get a little notification being, hey, Oma, your Qwilr page has been viewed.
And then you can click through and see some analytics about when it was opened, how many times, what sections they looked at and little things like that, and if they clicked on any links, blah, blah, blah, all that sort of basic stuff.
But there's just a little bit of magic of being like that sort of again, helps them grok this thing of like, oh, it's a web page.
I'm going to be able to have analytics.
And obviously through that flow, you've tried to show them how you can add video or you can embed your calendar, your embed a map or what have you, or a form.
And so that was our sort of core metric of getting there.
But actually to go and create, you know, a document, to create a proposal, like, it takes a bit of time and effort.
And there is this, you know, there's a little bit of a tabula rasa problem of coming in and having a clean slate and sort of how do you sort of get past that?
Which we actually now refer to as like zero to one problem internally, which is still, you know, I think a real problem we spend a lot of time thinking about.
But there's this funny thing with freemium that, like, if you've got it for free, well, I can just come back anytime.
You know, there's no real pressure on me to sort of solve this.
This qwil a problem now.
And as I think a lot of people in growth will Know, like, once you leave that first time, the chance of you coming back for a second visit, you know, that drops, and third to fourth, etc.
And so we actually found that to be like, quite, you know, obviously it was a thing you can work on improving and get better at, and there's a lot of things you can do on that side.
And again, I do think that freemium can work well, but it was an area that we hadn't sort of properly figured out.
And it really sort of did pretty negatively impact our activation rate, thus our conversion rate.
And that combined with a slower sales cycle time dramatically dropped our growth from.
Let's imagine it was like we were growing 3x year on year to growing at something like 70, 80% year on year, which for us at the time was like, oh, my God, the world is ending.
So I think there were a few moments along those lines.
The other thing just to highlight here is free users are very viral for other free users.
Paid users, even though the virality is maybe not always as high, are much more likely to sort of be a referral engine for other paid users.
And look, we've.
Every other viral company we've spoken to has had a similar experience where, you know, they might have a million free users.
And yeah, they'll sometimes they'll definitely still drive in people who convert to paid, but typically if they convert to paid, they'll convert to the cheapest tier.
Whereas people on like, you know, the cheap tier or the medium tier or the top tier, when they sort of act as a sort of viral driver, they more often refer people of their same level, if that makes sense.
Which is also, I think, quite a powerful thing and something important for us as we sort of went forward.

Omer (27:16.180)
That's really interesting.
I'd never come across that before, but when you think about it, I guess it does make sense because a lot of people would say, you know, well, the freemium is great because it gives me the virality or I've got a great, you know, viral coefficient or something.
But if it's attracting more people who just use your free plan, I think

Mark Tanner (27:40.390)
this speaks to, you know, what is your, like, what is your strategy here and what is.
How are you sort of building a product that is, you know, free in an area that's going to drive future growth.
And, you know, there are products out there that have, like, free for education, you know, which is a sort of an interesting one.
Or.
And it's like, oh, you might get this huge growth of usage on that side, but, like, for what Benefit, you know, the school kids and the teachers, you know, often aren't going to become your core customers or at least not for a while.
It's quite a long play.
And actually when I was at Google I worked for the Google for Education team and like it was when you're Google size and you're giving everyone free Gmail accounts, you actually can track it, making a difference to the bottom line.
But over a number of years, like over a sort of four to five year period, not over some sort of short term thing that would matter for a startup.
And so I think that like as you think through this, you need to have a way of doing it that aligns to your core customer group that also is then able to sort of really drive expansion.
And I this is a classic example that HubSpot's free CRM is this thing of like it was a lightweight tool that was very value additive to their marketing automation play.
And now it's this.
I don't know what the official number is, but let's guess that there's a million people using that free CRM.
Well, that's just a perfect spot for them to sort of engage up to where they're selling up Sales Pro or they're selling up marketing or even their customer service product.
Now that is something where it's like adds a heap of value but also is sort of directly doesn't compete with your core product and actually directly leads into your core areas that you want to sell.
I think that's sort of the magic.
The other thing I would also say again one more mistake here is like if freemium is just a downgraded version of your core product, well then you're giving people their first impression of your product is not as good as it could be.
And so I think you need to also be careful about that.
If you're just going to sort of feature limit freemium, it definitely can work.
We know companies where it works quite well.
But again that HubSpot path and there are other companies who do this well of sort of offering this sort of secondary related product and sort of make that excellent.
And if you want to make it even better, you can buy Sales Pro.
And if you want to, you know, you know, drive more leads, you can go into the marketing path.

Omer (30:09.790)
Yeah.
And I think another thing I've seen with, with a number of companies is that even if they have a freemium plan, you often start off with some kind of trial where you're on the higher end plan getting exposure to all of those features and Then they sort of disappear and you're back to the free plan and now you're sort of missing out on, on what you had.
So, okay, so you turned off, you learned some really valuable lessons.
You turned off freemium, but you've gone back to it again, right?
So you've at least tried it once or twice again.
So what was the rationale for doing that?

Mark Tanner (30:40.210)
I've sort of messed up the story here a tiny bit, Omer, and I've sort of merged a few of those examples together.
So I think we went back initially.
The last time we did it properly was that time where we were sort of really working with the, talking with the growth people at Typeform and focusing on that freemium path and we sort of did a deep dive analysis.
So since then we did a little experiment around basically having a free version of Qwila that was exactly the same as the paid version, but then only limiting it by just the number of documents you could create, which actually did work a little better and sort of a little bit more aligned to that sort of usage based pricing.
But that also coincided with us playing around with pricing and sort of actually, to be honest, moving up market a bit.
And in the end we just decided that as we were moving up market and sort of starting to do, you know, rather than the S of the SMB deals, doing much more of the M and then, you know, some early level mid market deals that really like, you know, it sort of, that didn't make sense for us as we were sort of going down that path at that time.
And yet I still, you know, we still definitely do think about it and ponder how we can find the right way for it to re enter our lives.

Omer (31:54.880)
So before we started recording, one of the questions I asked you was what was one of the biggest mistakes that you think you made?
And immediately you said focusing for too long on the wrong customer.
And originally you started out focusing on this SMB market and moved into sales and marketing teams.
But at what point did that happen?
And when you said focusing on the wrong customer for too long, how long are we talking about?

Mark Tanner (32:25.390)
Years.
So look, I sometimes refer to this as Qwila's original sin, which I think was done with good reason.
And we sort of touched a little bit on this earlier.
But when we started Qwilr, look, first of all, when we started QWILR in 2014 in Sydney, the startup ecosystem wasn't quite what it is today.
We just had one of the funds locally announce a $500 million VC round.
At that time that fund was one of the very, very few that were out there.
There are now a handful of Tier 1 funds locally in Australia that manage well over a billion dollars.
At that time, there was almost none.
That fund did exist and it had a $29 million fund, Aussie again, so like $20 million US fund, something like that.
And there really just wasn't that much capital around.
And our first check was for $100,000 AUD, which is maybe at 70,000 US.
And so as we were sort of, Dylan and I were thinking about this and started and we raised like a sort of half million dollar angel round relatively shortly after that.
But as Dylan and I were thinking about what we could do here and also working with Dan and things like that, there was this sort of these two very big technical challenges.
One was can you build a beautiful content editing experience in the web that looked and felt as good as what you could do in a file, but you were able to create these beautiful web pages?
Again, this is like 2014 and make that smooth and easy and delightful and make the output truly excellent.
Then second to that, could we make it truly collaborative?
Collaborative editing on documents in the web is a really complicated technical problem.
And there's all sorts of issues of concurrency and whatever else we can dive into or not, perhaps we should happily avoid.
But I think that our original sin was to say we're not going to build Qwila for teams.
Originally it was really a single player product.
I don't regret it.
It was really, I think the only correct choice for us to make.
But it did sort of push us down a path of all of these sort of hundreds of little product decisions because we had to, as we go down this prosumer path, we were selling to really the S of the SMB.
We're selling to micro businesses, to freelancers.
We really have to.
You still have to hit product market fit there, right?
You have to click into gear and actually start growing and building revenue and building customers and all that sort of stuff.
To do that, you start making hundreds of little product decisions that are aligned to that customer base, which again isn't wrong, but it has this longer term impact.
Then you also make a bunch of go to market decisions.
One of our channels that worked wonderfully well for us was around SEO in the early days, but again SEO very much targeted at the s of the SMB.
As we'd grown and we went from 10 customers to 100 to 1000, you start ticking up, our average spend went from being maybe 20 bucks a month towards 40 bucks a month towards maybe 50 or 60.
We eventually got to this stage that we were like.
We actually started closing a few sales teams.
We added in the ability to do collaborative editing and have teams and team structures and permissions and folders and all this sort of stuff that you would expect in a product like this.
But I think there is something to be said for being able to move to turn the tanker, if you will.
And that's a terrible analogy because Qwilup is still today only 45 people.
It's not like we're a huge oil tanker that needs to be turned.
But actually, it does take a hell of a lot of effort to really reorient yourself around a new customer segment, because there's all of these things to do with model and product and channels that sort of align to that new market and that needs to be realigned and that actually we were still doing well enough on this sort of smaller side that it sort of took some people a little while to sort of really be brought around to how important this change was.
And I definitely think that we stayed, you know, with a bit of focus on that side for a bit too long.
And one of the things we did actually was to drop our cheap plan.
We sort of.
And actually partially killed freemium, finally, to sort of actually force us to be away and say.
Because as we looked more and more at these sales teams who were coming in, we were like, huh?
People come and buy 10 seats to start with, and then they expand to 12, and then they expand to 18, and then they expand to the entire sales team of, you know what that meant, let's say, to 30.
And then they're very happy and they pay us a lot more money and they don't churn and you're like, oh, this is wonderful.
But also, I think it speaks to where we kind of always knew the product should be really from the start.
This is a tool that's fantastic for how do teams communicate?
Well, their sales and marketing collateral, and especially I think the pain point around that is large.
It's very large for SMB customers, but it's even larger as your organizational complexity scales.
The ability to have your proposals and all of your sales and marketing collateral sync up with the sources of truth that matter to your company.
Be that salesforce, be that HubSpot, be that Xero, be that even to things like tools like Slack or whatever else, or just like via Zapier to anywhere.
Those things become more and more important, as does automation, as does all this sort of stuff.
And So I would say that like that.
Again, I don't regret it necessarily because I don't think we couldn't.
We just wasn't available.
For us to go and do a one or two million dollar round and spend a year building out the perfect product, we kind of had to get something to market.
We had to start proving revenue relatively quickly, which was the mindset of the Australian investment community at the time, I think.
Again, I don't necessarily regret it, but I would say that there was something important about when you do know you have to make that change.
I actually think we would talk about the change a lot and talk about the importance of it, but the forcing functions of actually killing freemium, of actually killing our cheap plan, of doubling the price of our top tier plan, of investing more in sales, as well as again, just eternally communicating it to the team and showing them why it mattered and proving to them and saying, look at these customers as a cohort, look at how much more valuable they are to us.
It's not a matter of like 2x or 3x, it's 10x or 15x more valuable over the lifetime.
Those things were all things that we sort of assumed that just by saying the founders saying, oh, we're going to go in this direction and that would be enough.
And I would say that if you are doing, I think it is very common for SaaS to move up market and to maybe move to adjacent markets.
And I do think that as you do that, you really do need to focus on how you are going to actually incentivize and push and structure the team so that that move can happen as quickly as possible.

Omer (39:25.580)
You make a good point that when you, when you pick a target customer or a market, there are hundreds of decisions, small decisions, but they all add up.
Or the product, as well as marketing, your positioning, your messaging, all of these things, there's this knock on effect.
And when you then say, okay, we're going to move up market or we're going to focus on a different market, there's a lot of things you have to reverse engineer.
And it probably does feel like even if the company isn't thousands of people, it does feel like you're trying to turn a tanker around.
But I think as you sort of touched on this, that this was probably a difficult time and you may be focused on that market for too long, but it was almost, you needed to go through that to get to where you are today.
And it would have been great if you had, you know, millions and millions of dollars right at the beginning.
And you could say we're going to focus up market and on sales and marketing teams right away and build this amazing product.
But that wasn't the reality of where you were.
And I think that's a great lesson for other founders as well is you know, the market that you pick may not be the market that you, you serve in five years or 10 years time, but you need to pick a market.
Right.
And if you try and serve everyone, you're going to be in more trouble.

Mark Tanner (40:43.610)
When you asked about that quotes earlier, there was, there was one that my co founder said all the time that I nearly gave you from Seneca, which is he who is everywhere is nowhere.
You know, I think if you're trying to do all things, you're destined to fail.

Omer (40:56.890)
Yeah.

Mark Tanner (40:57.610)
And that, you know, focus and clarity on that side.
Attempting again.
One of the things that we just have thought about over the years with regards to concept of product market fit is that I'm just a big believer that product market fit is sort of like gears in a car.
And most startups never click into first.
And you've just got to, you've got to get a first channel working, you've got to start growing, you've got to start having paid customers who come back and use you and all that sort of stuff.
But you can't get to where you're going in first gear.
You've then got to figure out how do we click into second, how do we click into third.
Sometimes you may stay with the same customer cohort but just need to find new channels or ways of upselling or ways of improving churn or whatever it is.
But you do need to often have these step changes in your business.
I think right now we're going through a thing.
Maybe we're in third gear and we're trying to figure out how do we click into fourth.
And I think it's sort of, you know, you then have this period of like 6 to 9 to 12 months of just elation as things, you know, are working and you're growing and it's doing well.
And then that's, you know, I think you then sort of often had this moment of like, huh.
I think we're actually sort of trending towards the end of this sort of growth spurt.
How do we sort of click into the next level?

Omer (42:11.030)
Yeah.
All right, let's move on to the lightning round.
I'm going to ask you seven quick fire questions and just try to answer them as quickly as you can.
So you ready to go?
Okay.
What's the best piece of business advice you've ever received.

Mark Tanner (42:25.490)
I think one of the early ones we got was from a family friend which was it's so important to have a clear delineation between what I own in the business and what Dylan, my co founder, owns.
And so Dylan, obviously coming from a product design background, looks after engineering and product and design.
And I'm much more sales focused and operational, sort of own those sort of pieces.
And every time we've broken that rule has sort of been the times we've sort of gotten into trouble.
And I really do think it's maybe a bit more of an early stage advice.
But it was so clarifying.
And I think this is just generally true of having clear delineation of even as leaders in your company, as individual contributors as to what they own and sort of make that sort of very clear and understood.
And I think that that's just when done well is so incredibly powerful and empowering and clarifying.

Omer (43:16.430)
What book would you recommend to our

Mark Tanner (43:17.990)
audience and why there's a book called Crucial Conversations?
I was sort of a little bit torn between Crucial Conversations and Radical Candor.
But I think one of the biggest problems that a lot of startups face, certainly that we faced, is there are a lot of hard decisions you have to make in a startup and sometimes there's some really hard conversations.
And Crucial Conversations is just a book all about those conversations, you know, you have to have that give you that sort of sinking feeling in your stomach and stress you out.
And if you can become good at them, even if you can become great at them, like it truly is a superpower and it's not about being a bastard, it's about being very empathetic and understanding the other side, but also still having that tough, open, honest conversation and sort of trying to have that regularly.
And I really do think that there really are a lot of companies who just are bad at sort of making tough decisions or having tough conversations.
And I think that again, truly getting better at that just frees so much stress from your life and again allows you to clarify important parts of your business.

Omer (44:25.570)
What's one attribute or characteristic in your mind of a successful founder?

Mark Tanner (44:31.250)
Look, this is just very biased based on my thing, but I just have a degree of inbuilt optimism that I just can't get away from.
I do think that having a bit of an optimistic personality is just a wonderfully useful thing.
I think it allows for.
It sort of flows into things like persistence, a degree of openness to new ideas and excited by new ideas.
I think it allows me to seek a path towards.
Yes.
And sort of just generally viewing the world with a bit of a rose colored tint.
I think that I don't think you have to be an optimist, but I do think it can be a helpful, useful thing on the journey because there are some, as you, I'm sure well know, there's some bloody roller coasters and speed bumps and painful parts along the way.

Omer (45:16.290)
Yeah.
But you just reminded me of this book called Learned Optimism, which I was just trying to kind of think about that there's a.
This is.
It's great that it's something that you've got built in, but I think it's also something that, you know, other founders can certainly develop and nurture and it can become an important characteristic for people.
What's your favorite personal productivity tool or habit?

Mark Tanner (45:35.010)
So at the moment I've got a relatively new calendar cadence that I hope people will enjoy, so I'm happy to share this one with you.
So this is a little bit a cheat because I'm in Australia so all of my US team don't come online until my Tuesday.
So my Monday is almost entirely meeting free.
I usually touch base with my co founder and go through a few things there.
So it's a very nice space to start the week, get all the things I need to get done at the start, have some space to work on some projects.
My Tuesday is the kickoff day, so we do all hands company call.
We do a bunch of team meetings on that day.
Really it's a sort of more of a team meeting focused day.
Wednesday is my like my sacred day.
It's blocked off in my calendar and it's a little for anyone to book time during that day.
So I sort of get a nice sort of fresh start to the week.
I then have a very, very meeting heavy day on Tuesday, which these days is very zoom heavy.
But then out of that comes a bunch of work which I can largely push through on Wednesday and also have time for a few big projects then as well.
Thursday is my one on one day, so everyone do one on ones with my team and also skip levels and again I sort of back to back that and to some degree and give a few bits of spaces here and there, but it's much more individual focused and I'm allowed to get in that mindset for an entire day which is useful.
And there's still some space obviously on Tuesdays and Thursdays for doing work.
And then Friday again is largely free and we're recording this on a Friday, so I get to do interesting things.
Like I have lots of customer calls on Mondays and Fridays.
If I want to be involved, I might do a wonderful podcast interview.
I might sort of meet a few candidates and things like that.
But it's more for.
For sort of again, projects and other things on that side.
So I think having these sort of two days of the week that anyone in the company kind of knows that it's sort of almost like office hours, they can book in time with me if it's a meeting, ideally on a Tuesday, if it's a one on one session, ideally on a Thursday, has just freed up my time and I have this nice rhythm of a day to really dive into some more deep work and then a day for much more social interaction and then again another day off if you want off that sort of side and more focus.
And that cadence is just.
May not work for everybody, but it truly has been revolutionary for me.

Omer (47:49.960)
It kind of reminds me a little bit of Jack Dorsey.
He does something similar, right.
In terms of like defining a day for or a theme for each day.
And some people said that's how he's able to run Twitter and Square at the same time.
So there you go.
Maybe there's another company in the waiting for you.

Mark Tanner (48:06.360)
Yeah.

Omer (48:07.720)
And talking about that, what's a new or crazy business idea you'd love to pursue if you had the extra time?

Mark Tanner (48:12.760)
This is a particularly crazy one, but I have this weird desire to do a turnaround at some stage in some sort of old school industry.
I'm not entirely sure what it would be, but I think it'd be very fun to.
I've been involved in a bunch of startups and things like that.
I have this interest in experiencing what would it be like at a sort of 200 or 300 or 500 person company that was sort of going through a big sort of dramatic change and like how you would try to sort of turn that around and maybe bring in new technology and new ways of working and I think bring in all the wonderful things that we really do think the way that the tech industry works is not in all areas, but in a number of areas is often, you know, I think sort of, I think the best methodologies currently.
I think I'd find that very.
Yeah.
Interesting and fun and weird that that reminds me of.

Omer (49:08.520)
There was a TV show in.
I grew up in England and There was a TV show in the 90s, it was called Troubleshooter, I think.
And there was a guy called Sir John Harvey Jones.
And anyway, every week he'd go into this new business and it was usually, you know, a traditional old business, a factory, something like that.
And they were kind of struggling and he'd kind of helped to turn them, them around.
And the transformation was interesting, but it was also how, for me, it was just really fascinating how he was going into these really boring, dull businesses.
But there was this almost this science and art to this transformation and this turnaround.
So maybe you should be doing a TV show of your own at some point.

Mark Tanner (49:55.370)
That sounds fantastic.

Omer (49:58.730)
What's an interesting or fun fact about you that most people don't know?

Mark Tanner (50:01.850)
This is a very topical one that's going to date this podcast massively.
But I don't know if you saw there was that amazing Donald Trump interview with Jonathan Swan on Axios recently that went around Twitter and it was sort of Trump, he sort of pushed him on all sorts of things.
So he was in my high school, we were in the same class, we rode together.
I know him incredibly well.
There's this very, this is incredibly surreal moment going on for all of us who went to school with him because a, he is having this insane interview and God, it's just him like that.
It's just his personality.
He's been the same his whole life and I can remember him speaking to teachers that way and then at the moment in Australia.
So his dad is also a journalist, but his Dad's a doctor, Dr. Norman Swan, and he has become the sort of the media personality around Covid in Australia.
So he works for our national broadcaster, the abc and he's their lead person on Covid stuff.
So John, who I went to high school with and Norman, who was like one of the dads, have become these like two huge, you know, one a national figure, one an international figure.
And it's just been a completely surreal couple of weeks as that that's all been happening, to be honest.

Omer (51:19.750)
That was definitely a memorable interview that he did for sure.
What's one of your most important passions outside of your work?

Mark Tanner (51:27.520)
Mate, I'm going to give you a generic one here, but I have a son, Henry, and he is about to turn two.
And look, we live in a time of COVID and quarantine and a time of a lot more time with family.
And it's just been so wonderful to see him grow and learn.
And you know, he's in this space now of that sort of, you know, 18 months to two year zone where his vocab is exploding.
His understanding of things is just getting so Much more.
I mean, it's still early, obviously, but so much more sophisticated.
It's just been.
I mean, it's my most important passion outside of work to some degree.
And I just.
It's an awesome experience being a dad.
And I've just really.
I was actually.
Look, if I'm honest with you, I was.
I was relatively nervous about being a founder and a father at the same time.
And it's just been the best, really has been.

Omer (52:19.350)
Yeah, I think you're smart.
This is exactly the time to make the most of it.
I mean, my two kids are now, you know, teenager and sort of preteen, and already trying to get them to hang out with you is becoming harder and harder.
They're very.
They're very polite about it.

Mark Tanner (52:37.070)
You know, it was.

Omer (52:38.150)
Find something else to do.
So my.
A friend of mine always used to say, like, make the most of your kids when they still think you're cool.

Mark Tanner (52:43.310)
Yeah.

Omer (52:43.710)
And I think that sort of.
That age between, like, when you're just kind of, I guess, under 10 is probably the sweet spot, from my experience.
All right, Mark, it's been a absolute pleasure.
I really enjoyed this conversation.
Thanks for sharing the story of Qwilr and some of the lessons that you and Dylan have learned along the way.
If people want to check out Qwilr, they can go to Qwilr.
That's Q W I L r dot com.
And I would definitely, like, recommend, like, just at least, even if you don't sign up, take a look at, like, the templates and.
And you'll get a sense of the kinds of things that you can produce.
And.
And I wouldn't even describe these things as documents.
They're more like, you know, sales pages that you'd find on a website, which I think kind of really speaks to that, that experience that I think you're trying to get across with these in terms of, you know, moving away from just a Google Doc or a PDF or something.
So I think people get a good sense of that.
And if folks want to get in touch with you, what's the best way for them to do that?

Mark Tanner (53:43.610)
Yeah, so I'm just arketanner on Twitter and obviously you can find me on LinkedIn as well.
And look, I'm just.
If you've made the end of the podcast, Bravo, you.
I'm MarkWiller.com so you should feel free to shoot me an email, too.
Hopefully.
I don't get on too many spam lists, but always happy to chat about startups, about sales, about Qwilr.
Itself, obviously, as well.

Omer (54:07.690)
Awesome.
Thanks so much.
I wish you, Dylan, and the rest of the team all the best.
And thanks for making the time today.

Mark Tanner (54:15.390)
My pleasure.
Thank you so much for having me.

Omer (54:17.470)
Cheers.