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Jan 3, 2018 · 24m · top-founders

893 SaaS: How Zapier Passed 60k Paid Seats and $20m in ARR

Wade Foster · 13m spoken Nathan Latka · 8m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this interview on The Top Entrepreneurs podcast, Zapier CEO and co-founder Wade Foster shares how the company bootstrapped its way to over $20 million in ARR, 60,000 paying customers, and a 110-person distributed team after raising only $1 million in funding.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 36.5% of the talking time here. How this is scored →

Nathan as informed peer 4.8 Guest teaching 2.5 Guest disagreement 1.0 Nathan pushing back 2.3
05100:0010:0020:000:49–4:56 · Nathan as informed peer 5/10 The Origins and Genesis of Zapier Nathan references common SaaS agency origin trajectories and compares Zapier to heavily funded integration platforms like Segment and SnapLogic. Wade clarifies that Zapier targets non-technical SMBs rather than enterprise event streaming.4:56–7:57 · Nathan as informed peer 4/10 Scaling a Distributed Team and Capital Efficiency Nathan asks about remote team challenges and checks whether YC investors exerted pressure to raise subsequent rounds. Wade explains that their investors welcomed high capital efficiency and predictable profit over dilution.7:57–11:12 · Nathan as informed peer 4/10 User Onboarding, Activation, and Removing Product Friction Nathan interrupts Wade to demand a non-obvious product friction example rather than standard onboarding advice. Wade provides an anecdote about users getting stuck on raw MailChimp list IDs instead of human-readable list names.11:12–14:09 · Nathan as informed peer 6/10 Churn Benchmarks, Pricing Levers, and Expansion Revenue Nathan drills into churn benchmarks and carefully separates logo churn from revenue churn. Wade breaks down typical SaaS conversion rates, monthly churn benchmarks, and two-axis pricing structures.14:12–20:25 · Nathan as informed peer 6/10 Sponsor Break: Hotjar Website Analytics Nathan references Brian Halligan's pricing model axes and tries to roleplay an uphill partner co-marketing pitch. Wade politely reverses the premise by explaining that partner platforms build the integrations and come to Zapier for distribution.20:25–23:31 · Nathan as informed peer 4/10 The Famous Five Rapid-Fire Questions The conversation moves through the standard rapid-fire questions, with Wade articulating Jeff Bezos's shareholder philosophy on avoiding process-as-proxy and Nathan confirming Zapier's 20 million ARR milestone.0:49–4:56 · Guest teaching 3/10 The Origins and Genesis of Zapier Nathan references common SaaS agency origin trajectories and compares Zapier to heavily funded integration platforms like Segment and SnapLogic. Wade clarifies that Zapier targets non-technical SMBs rather than enterprise event streaming.4:56–7:57 · Guest teaching 2/10 Scaling a Distributed Team and Capital Efficiency Nathan asks about remote team challenges and checks whether YC investors exerted pressure to raise subsequent rounds. Wade explains that their investors welcomed high capital efficiency and predictable profit over dilution.7:57–11:12 · Guest teaching 2/10 User Onboarding, Activation, and Removing Product Friction Nathan interrupts Wade to demand a non-obvious product friction example rather than standard onboarding advice. Wade provides an anecdote about users getting stuck on raw MailChimp list IDs instead of human-readable list names.11:12–14:09 · Guest teaching 3/10 Churn Benchmarks, Pricing Levers, and Expansion Revenue Nathan drills into churn benchmarks and carefully separates logo churn from revenue churn. Wade breaks down typical SaaS conversion rates, monthly churn benchmarks, and two-axis pricing structures.14:12–20:25 · Guest teaching 3/10 Sponsor Break: Hotjar Website Analytics Nathan references Brian Halligan's pricing model axes and tries to roleplay an uphill partner co-marketing pitch. Wade politely reverses the premise by explaining that partner platforms build the integrations and come to Zapier for distribution.20:25–23:31 · Guest teaching 2/10 The Famous Five Rapid-Fire Questions The conversation moves through the standard rapid-fire questions, with Wade articulating Jeff Bezos's shareholder philosophy on avoiding process-as-proxy and Nathan confirming Zapier's 20 million ARR milestone.0:49–4:56 · Guest disagreement 1/10 The Origins and Genesis of Zapier Nathan references common SaaS agency origin trajectories and compares Zapier to heavily funded integration platforms like Segment and SnapLogic. Wade clarifies that Zapier targets non-technical SMBs rather than enterprise event streaming.4:56–7:57 · Guest disagreement 1/10 Scaling a Distributed Team and Capital Efficiency Nathan asks about remote team challenges and checks whether YC investors exerted pressure to raise subsequent rounds. Wade explains that their investors welcomed high capital efficiency and predictable profit over dilution.7:57–11:12 · Guest disagreement 1/10 User Onboarding, Activation, and Removing Product Friction Nathan interrupts Wade to demand a non-obvious product friction example rather than standard onboarding advice. Wade provides an anecdote about users getting stuck on raw MailChimp list IDs instead of human-readable list names.11:12–14:09 · Guest disagreement 1/10 Churn Benchmarks, Pricing Levers, and Expansion Revenue Nathan drills into churn benchmarks and carefully separates logo churn from revenue churn. Wade breaks down typical SaaS conversion rates, monthly churn benchmarks, and two-axis pricing structures.14:12–20:25 · Guest disagreement 2/10 Sponsor Break: Hotjar Website Analytics Nathan references Brian Halligan's pricing model axes and tries to roleplay an uphill partner co-marketing pitch. Wade politely reverses the premise by explaining that partner platforms build the integrations and come to Zapier for distribution.20:25–23:31 · Guest disagreement 0/10 The Famous Five Rapid-Fire Questions The conversation moves through the standard rapid-fire questions, with Wade articulating Jeff Bezos's shareholder philosophy on avoiding process-as-proxy and Nathan confirming Zapier's 20 million ARR milestone.0:49–4:56 · Nathan pushing back 2/10 The Origins and Genesis of Zapier Nathan references common SaaS agency origin trajectories and compares Zapier to heavily funded integration platforms like Segment and SnapLogic. Wade clarifies that Zapier targets non-technical SMBs rather than enterprise event streaming.4:56–7:57 · Nathan pushing back 2/10 Scaling a Distributed Team and Capital Efficiency Nathan asks about remote team challenges and checks whether YC investors exerted pressure to raise subsequent rounds. Wade explains that their investors welcomed high capital efficiency and predictable profit over dilution.7:57–11:12 · Nathan pushing back 3/10 User Onboarding, Activation, and Removing Product Friction Nathan interrupts Wade to demand a non-obvious product friction example rather than standard onboarding advice. Wade provides an anecdote about users getting stuck on raw MailChimp list IDs instead of human-readable list names.11:12–14:09 · Nathan pushing back 3/10 Churn Benchmarks, Pricing Levers, and Expansion Revenue Nathan drills into churn benchmarks and carefully separates logo churn from revenue churn. Wade breaks down typical SaaS conversion rates, monthly churn benchmarks, and two-axis pricing structures.14:12–20:25 · Nathan pushing back 3/10 Sponsor Break: Hotjar Website Analytics Nathan references Brian Halligan's pricing model axes and tries to roleplay an uphill partner co-marketing pitch. Wade politely reverses the premise by explaining that partner platforms build the integrations and come to Zapier for distribution.20:25–23:31 · Nathan pushing back 1/10 The Famous Five Rapid-Fire Questions The conversation moves through the standard rapid-fire questions, with Wade articulating Jeff Bezos's shareholder philosophy on avoiding process-as-proxy and Nathan confirming Zapier's 20 million ARR milestone.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 47.5% · guest 52.5%0:00 · Nathan 47.5% · guest 52.5%3:00 · Nathan 38.4% · guest 61.6%3:00 · Nathan 38.4% · guest 61.6%6:00 · Nathan 33.1% · guest 66.9%6:00 · Nathan 33.1% · guest 66.9%9:00 · Nathan 22.6% · guest 77.4%9:00 · Nathan 22.6% · guest 77.4%12:00 · Nathan 45% · guest 55%12:00 · Nathan 45% · guest 55%15:00 · Nathan 45.2% · guest 54.8%15:00 · Nathan 45.2% · guest 54.8%18:00 · Nathan 27.2% · guest 72.8%18:00 · Nathan 27.2% · guest 72.8%21:00 · Nathan 27.9% · guest 72.1%21:00 · Nathan 27.9% · guest 72.1%24:00 · Nathan 90.4% · guest 9.6%24:00 · Nathan 90.4% · guest 9.6%
Sharpest disagreement ▶ 16:55 Rejecting the co-marketing negotiation premise

When Nathan initiates a roleplay pretending to be a larger company hesitant to co-market, Wade rejects the setup by explaining inbound partners actually petition Zapier to be featured.

 Hardest push from Nathan ▶ 9:39 Demanding a weird product friction example

Nathan cuts off Wade's initial answer to insist on a strange, unexpected friction point rather than typical onboarding case studies.

 Biggest teaching moment ▶ 15:37 Explaining tasks versus API call metering

Wade explains why Zapier bills on completed tasks rather than raw API calls, noting that uninformative or empty API calls should not penalize users.

 Nathan holds their own ▶ 15:10 Citing Brian Halligan's three-axis pricing framework

Nathan demonstrates SaaS pricing expertise by recalling Brian Halligan's framework spanning feature tiers, utility metering, and seat licensing.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
The Origins and Genesis of Zapier 5312 Nathan references common SaaS agency origin trajectories and compares Zapier to heavily funded integration platforms like Segment and SnapLogic. Wade clarifies that Zapier targets non-technical SMBs rather than enterprise event streaming.
Scaling a Distributed Team and Capital Efficiency 4212 Nathan asks about remote team challenges and checks whether YC investors exerted pressure to raise subsequent rounds. Wade explains that their investors welcomed high capital efficiency and predictable profit over dilution.
User Onboarding, Activation, and Removing Product Friction 4213 Nathan interrupts Wade to demand a non-obvious product friction example rather than standard onboarding advice. Wade provides an anecdote about users getting stuck on raw MailChimp list IDs instead of human-readable list names.
Churn Benchmarks, Pricing Levers, and Expansion Revenue 6313 Nathan drills into churn benchmarks and carefully separates logo churn from revenue churn. Wade breaks down typical SaaS conversion rates, monthly churn benchmarks, and two-axis pricing structures.
Sponsor Break: Hotjar Website Analytics 6323 Nathan references Brian Halligan's pricing model axes and tries to roleplay an uphill partner co-marketing pitch. Wade politely reverses the premise by explaining that partner platforms build the integrations and come to Zapier for distribution.
The Famous Five Rapid-Fire Questions 4201 The conversation moves through the standard rapid-fire questions, with Wade articulating Jeff Bezos's shareholder philosophy on avoiding process-as-proxy and Nathan confirming Zapier's 20 million ARR milestone.

Statements from this episode (13)

Assertion Supported
Foster: Zapier integrates with approximately 900 apps
“We hook into about 900 different apps and let people set up automations between them.”
Wade Foster Jan 3, 2018 ▶ 2:35
Assertion Not checkable as stated
Foster: Average Zapier customer pays about $20 monthly
“About 20 bucks a month.”
Wade Foster Jan 3, 2018 ▶ 3:30
Assertion Supported
Foster: Zapier operates as a 100% distributed team of 110 people
“So zap your day is about a 110 people. All across the world, we're a hundred percent distributed team, which is a bit unique.”
Wade Foster Jan 3, 2018 ▶ 5:01
Assertion Supported
Foster: Zapier has grown profitably on customer revenue since 2012 $1M seed
“We did do a small round when we were first getting started, so we went through Y Combinator and then raised I mean, what today is a modest seed round, about a million dollars in September, twenty-twelve. But since then, we've grown profitably and on customer r…”
Wade Foster Jan 3, 2018 ▶ 6:32
Assertion Supported
Foster: Zapier has 60,000 paying customers
“The latest public numbers we've shared is 60,000 customers using Zapier.”
Wade Foster Jan 3, 2018 ▶ 8:01
Assertion Supported
Foster: Zapier has over two million users on the platform
“We've got over two million users on the platform.”
Wade Foster Jan 3, 2018 ▶ 8:10
Insight
Foster: Zapier's primary LTV driver is users triggering their first Zap
“For us, it's like setting up a zap and having it like do its first thing. Like as soon as it does that first. Yeah. Fire once. It's like, oh my God, this thing is amazing. Right. But you know, if they don't get to that point, like if they trip up along the way…”
Wade Foster Jan 3, 2018 ▶ 8:27
Insight
Foster: Great SMB SaaS Companies Maintain 3% to 4% Monthly Churn
“Monthly is average for like a great small business. You're probably in like that three to four percent range.”
Wade Foster Jan 3, 2018 ▶ 12:03
Assertion Not checkable as stated
Foster: Zapier Achieves Net Negative Revenue Churn Year Over Year
“Yep. Right at it.”
Wade Foster Jan 3, 2018 ▶ 12:41
Insight
Foster: Effective SaaS Pricing Leverages Feature Tiers and Usage Meters
“They tend to have two axes on their pricing levers. They've got like a feature tier. So this is like, you know, small, medium, large sort of thing, right? It's like, here's a small bucket of features, a medium bucket of features and a large bucket of features.…”
Wade Foster Jan 3, 2018 ▶ 13:18
Disclosure
Foster: Zapier sends weekly new apps email to 1M+ subscribers
“So the way we do this is we have a Wednesday, every Wednesday we send out a what's new on Zapier piece. And this is something our users love getting because they love learning about new apps. It's to their advantage. They want this. And so if you have somethin…”
Wade Foster Jan 3, 2018 ▶ 17:33
Disclosure
Foster: Zapier reached its massive scale using zero paid marketing
“So, today, no. We're getting ready to start experimenting with it, though.”
Wade Foster Jan 3, 2018 ▶ 20:06
Assertion Supported
Foster: Zapier passed $20M ARR as of May 2017
“We announced in May we passed twenty million ARR.”
Wade Foster Jan 3, 2018 ▶ 23:41
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