I’ve long been fascinated by the highly efficient companies. Basecamp at over $2 million in revenue per employee, Valve at over $11 million, and MVMT at over $1 million. Each of these companies has unique ways of doing business that allow them to be so efficient.
Rather than trying to grow ConvertKit as fast as possible, I’ve been very deliberate with hiring so that even when growing quickly we haven’t increased our headcount like crazy.
Then I came across this Tweet from Dmitry, the CEO and founder of Ahrefs (a very popular SEO SaaS tool).
So I reached out to Tim Soulo, Ahrefs CMO, for an interview to learn how they bootstrapped a sophisticated SaaS tool to over $1 million in ARR per team member!
My highlights and takeaways
- They are over $50M ARR with a team of 45 people. Still growing over 60% each year. 60% growth from September (when they shared the $40M number) would put them at $64 million by September 2019. If they pull it off the following year they will reach $102 million by September 2020.
- They have a 50 person limit for their entire company. They are at 45 now.
Growth and marketing
- When Tim started they were getting 15,000 visitors per month from Google. Now they get over 250,000 per month.
- They have 8-10 team members on marketing, mostly focused on search, product education, and content marketing. Most of their growth is driven through word of mouth and content marketing.
- No paid ads, other than recently trying out some retargeting.
- They used to have a free trial, but because customers can get value so quickly (sign up, immediately get your search data), it was getting heavily abused. So instead they moved to a paid $7 for 7 days trial. Growth didn’t decrease (or increase), but the burden on their infrastructure and support team went down considerably.
- They’ve steadily increased pricing over the years, grandfathering customers in at every stage.
- My favorite moment in the interview is at the end when I mention people should checkout Ahrefs and Tim says, “Don’t go to our marketing site, search for us on YouTube!”He firmly believes that product education is the best marketing and they’ve done a really good job of that on YouTube. I’d never heard someone say that their YouTube channel is a better sales channel than their marketing site.
- They have 6-7 team members on customer support. They see every customer support ticket as a product flaw and do everything they can to make sure that ticket never comes in again.
- They do a lot with help text and guides built right into the app at a place where the user is most likely to be confused.
- They don’t outsource any support. It’s all handled by the in-house team members.
- The founder is starting to think they may have to exclude support from the 50 person limit since they still have had to scale support team members roughly inline with customers.
- I believe the difference between a “pretty good” product and an incredible experience would be double the growth rate.
Technical & product
- Dmitry, their founder, is very technical and that is the core of the entire company. That’s why they’ve been able to build something with such incredible scale with such a small team.
- They index the entire internet. Their crawler is the second most prolific on the web, after Google. They even had to write a custom database because they weren’t satisfied with an off-the-shelf data store.
- They view a great product as the most effective marketing by far. It provides the foundation for incredible word of mouth and their marketing team simply works to amplify the strengths of the product.
Thanks to Tim for taking the time to share those great insights! What did you learn? Drop a note in the comments.