The Exchanges

Q Yep. Um, and so, and so help me understand a business model. How do you guys make money so you can pay more engineers and build product faster?

A Yeah. So it's, you know, similar to Slack. So you've got a free tier. Um, you know, we really learned early on that a lot of people were using this kind of personally at a professional level. Like I said, a freelancer talking to their clients or, A startup founder talking to investors or even a coach or a mentor talking to their students. And I kind of like one to many aspect with one person who's doing the majority of the communication, talking to a lot of people, we definitely allow you to do for free. And that enables things like, um, you know, nonprofits and communities to kind of run for free on Yak. Now, as soon as you want to upgrade to a team plan and you get things like our Slack integration, group messaging, Uh, better transcription insights. We actually pull out action items and to do's from the transcription. All of that stuff's on the paid plan. And we've got standard annual and monthly, you know, we started out with like three different plans and that was just confusing.

AI assessment note: “similar to Slack. So you've got a free tier... All of that stuff's on the paid plan.”

Q Yep. Ok, interesting. So now let's go back to the backstory. So you, you did this at a hackathon. You get it going. How did you get your first hundred free users using this thing?

A Yeah, I mean, I talk about this a lot. It's one of my favorite Is of Yak's kind of genesis is writing coattails of somebody else's marketing efforts. Uh, I've always been really big on not putting money into ads, um, finding creative other ways to find users. And for us, that meant, you know, utilizing product hunts, existing audience, you know, that startups, it's makers, it's designers, developers, it's exactly who we were trying to target. So from a audience perspective, it worked out really great for us. So we submitted this to the hackathon specifically with the explicit idea of we will win the hackathon because we're really good builders. We know how to make something that looks good. Um, and once we do, that will be free press for our design agency. So friendly, which was really the idea at the time was let's get, you know, use this as a marketing funnel. Um, you know, get featured by them and then people will come in and find out who built it and they'll hire us. That was kind of the idea. Uh, so yeah, we really just kind of leveraged their audience. They put us in their newsletter. They put us on their medium blog. They tweeted about us, put us on their Facebook. And then we won the hackathons. We were on the homepage of their website and, All of that resulted in thousands of people coming into the funnel for free. We didn't have to pay for any of that. You know, we pa…

AI assessment note: “utilizing product hunts, existing audience... They put us in their newsletter.”

Q Oh, interesting. Okay, I can't, oh, yelling across cubicle. Oh, that's hysterical. I didn't know that. Okay, so you posted this back in December of 2018. You got 429 up votes. Um, how many, how much, do you remember how much like website traffic, how many signups this drove?

A Yeah, so I mean, that resulted in probably, um, a thousand signups, um, downloads, really, you know, it's translated into downloads. Um, you know, I think we probably had at peak maybe like 500 people using the app on kind of a weekly basis. I mean, admittedly, this part, It was not that great, right? It was definitely a hackathon project. So I was surprised that many people actually got it up and running. And a lot of them were in, like, weird industries we didn't expect either, like Roche Healthcare, like kind of an enterprise healthcare company, not a, um, fun, you know, remote-first startup. Um, so yeah, they just found out about it through Product Hunt, downloaded the app, and started using it in their team. Mm-hmm.

AI assessment note: “that resulted in probably, um, a thousand signups, um, downloads, really”

Q Justin, can you quantify this though? To me, this strikes me as a product where you should be like crazy tracking viral coefficient and optimizing for getting up to, you know, 1.2. Are you guys tracking this sort of stuff?

A No, and it's definitely a downfall in terms of kind of like inter-app virality. And that's something that's definitely going to be a huge focus for us this year. Um, you know, we've been fortunate to have that top of mind behavior. So we're being referred from other users saying, hey, I've heard about this. We really need that to come from our own existing users. Hey, I'm using this, right? Like this is what you should be using. And that's definitely something we need to work on in terms of giving users easy ways to kind of invite people into the platform. And we're doing that, um, you know, a lot with like, uh, public groups that you can invite people to. You now have yak.com profile pages that you can paste places. So a lot of what we're working on is kind of that inter-app virality.

AI assessment note: “No, and it's definitely a downfall in terms of kind of like inter-app virality.”

Q Yep. Okay, so then, then fast forward today. I mean, what do you guys track more? Number of teams or number of seats in the teams?

A Yeah, so really we're trying to look at growth in a team. So we want to see a team start out with three, four people, you know, expand out to five, seven, you know, eight people, and then move up to maybe that 15 number, which we think is a good Sweet spot for kind of like a larger team. Um, and we're really, that's kind of our focus in Q one of this next year is going to be going into existing teams and saying, what features are you missing? Or why aren't you onboarding more people? How can we help you get more people? Cause we already have really kind of the mass adoption from multiple companies. We want to see those existing teams grow. Um, and obviously that means that that results in, Hey, you hit a peak or you hit a usage, um, you know, top out where now you need to upgrade and pay as well. So instead of doing like cold call sales and And trying to reach new companies. We're really trying to go into the existing teams that are using the product saying, Hey, how do we scale this? Oh, we didn't even know that group messaging existed. Oh, we didn't even know a Slack bot was an option. And so now that we have these features, we're going to go back out to them and say, great. So upgrade to the team's plan. We'll activate that slack integration for you.

AI assessment note: “really we're trying to look at growth in a team.”

Q What's awful? Like, why do you say awful?

A We don't actually enforce a paywall. So we say we have a paywall, but we don't actually enforce any of it. So it'll say, like, upgrade to get the desktop app. But you can technically still download the desktop app without upgrading. It says upgrade to get, you know, group messaging. You can just create groups. We don't actually block any of that functionality. You know, a big part of our story has always been, um, really, really tight iteration cycles with our users. Hey, like, what do you like? What do you not like? How did this make you feel? How did it not make you feel right? And so a lot of the pricing is there just so we can get gut reactions. Did someone upgrade immediately when they saw it or did they upgrade later and then ask them like, Hey, so why did you upgrade? And a lot of times it'll be, Oh, I upgraded for the slack integration. And that way we know, okay, that's a mainstay that's going to stay on the pricing page. Cause that was a reason someone upgraded. If nobody ever upgrades for some specific reason, just put it on the free plan because clearly that's not a reason to upgrade. Um, and so a lot of what we're doing is really just experimentation. Um, I love seeing more users in the platform. So we're not forcing paid plans right now because it's really all about kind of iterating on product feedback. This is a very new way of working. We're asking people to no…

AI assessment note: “We don't actually enforce a paywall. So we say we have a paywall”

Q That's great. And so what would you like to see in terms of growth year over year? If we do this interview in a year, what do you hope those numbers are?

A Yeah. So I'd like to see team sizes like five X thing. That's really my goal. Obviously team size, um, translates directly into a higher monthly rate. Um, but for us, it's really about getting adoption because once you change the way someone is communicating inside their org, They start dropping those other things which are fighting on the balance sheet. You know, we've even priced this thing specifically around, like, we assume you will have Slack, so we don't be more expensive than Slack. We're going to come right underneath it in terms of a monthly price. We're also thinking about how much Zoom costs and how much all these other tools cost, right? And so, as we start to change these habits, we can start messing with pricing a little bit more because we don't have to worry so much about all the other SaaS tools that you pay for. The number one thing that we've heard from teams that have used this is, You know, you get in at say a bottoms down approach and you've got, uh, or a top down approach and you've got, um, a team lead who is like, this is great. I want to start using it. I've always gotten from them has been, I cannot get my team on another SaaS app. They're going to kill me. Like, I love this, but they're going to kill me if I tell them we have to use another SaaS app. Then you go from bottoms up and you have a group of people that start using it and they go, Oh, this…

AI assessment note: “I'd like to see team sizes like five X thing. That's really my goal.”