In this video the founder of Weebly, David Rusenko talks about their journey to find a product market fit for their Weebly web site platform.
Before summarizing the video, let’s talk about what is Weebly and what it does.
What is Weebly?
Weebly is a web hosting service, headquartered in San Francisco. Its parent company is Square, Inc. On acquisition in April 2018, Weebly had more than 625,000 paying subscribers.
Weebly was founded in 2006 by CEO David Rusenko, Chief Technology Officer Chris Fanini, and former chief product officer Dan Veltri. At the time, Penn State required all students to maintain an Internet portfolio, so they built upon this idea and created software that made it easy for anyone to build a personal website.
Weebly is an easy way for entrepreneurs to build a website or online store. Weebly’s free online website creator uses a simple widget-based site builder that operates in the web browser.
Time listed Weebly among the 50 Best Websites of 2007. In 2011 Business Insider included Weebly into its “15 Cool New Apps That Are Crushing It On Chrome” list.” Also, in 2011, David Rusenko, Weebly’s CEO and co-founder, earned a spot in Forbes “30 Under 30: social/mobile” list.
What Weebly does?
Weebly automatically generates a mobile version of each website. Storage is unlimited, but the service restricts individual file sizes. Consumers are given the option to have any url ending in weebly.com, .com, .net, .org, .co, .info, or .us. (example.weebly.com)
Android and iPhone apps are available that allow users to monitor their website traffic statistics, update blog posts and respond to comments, and add or update products if the user has an e-commerce online store.
Basic features for blogging and e-commerce are supported in Weebly as of 2018, site owners could develop simple stores with payments through either PayPal, Stripe or Authorize.net.
Users can choose to incorporate advertisements in their pages, and visitor statistics can be tracked through an in-house tracking tool or Google Analytics. Weebly also has integrated newsletter marketing features. As of 2020, Weebly was offered in 15 languages: English, French, Spanish, Italian, German, Portuguese, Polish, Norwegian, Dutch, Danish, Swedish, Chinese, Japanese, Russian, and Turkish.
In February 2016, over 12 years ago Dave wrote the first line of code for Weebly, and from there he grew the company to 50M users and around 350 employees, selling it to Square in May 2018 for $365M. Half of the USA population visits a Weebly site every single month and the key success factor is enabling entrepreneurs to build the websites themselves.
The journey of Weebly
He wrote the first line of code 12 years back In February 2006 at Beaver Stadium and by August 2006, 6 months later there were 12 users per day at Weebly.
In October of 2006, 8 months later they were hustling for the buzz on forums, they had created a sign-up link and 30 users had signed up on the record day. In October 2006 he applied to Y -Combinator on slashdot with the deadline for application being 2 hours to go. David Rusenko along with Dan and Chris who are the co-founders of Weebly moved to San Francisco, got accepted at the YC and started working there.
In January 2007 11 months after writing the first line of code, they were working full time at the YC program. Over a year Weebly didn’t have a product market fit.
In April 2007 they were successful in raising $650k from the investors. In May 2007 after 18 months, they were featured in News Week Magazine. They still didn’t have product market fit yet. In October 2007 after almost 20 months the first real traction happened. Every single day they had thousands of people coming. By February 2010 after 48 months they were off to the races.
What is Product-Market Fit?
The mantra of Y combinator is “Make something people want”. The idea is the initial stage of making a company, with the phases of a startup being: Idea, Prototype, Launch, Traction, Monetization and Growth.
First 4 phases that are between idea and traction are the initial product market fit search. The last 2 phases are continued product market fit refinement. This stage is really tough.
Top early challenges at a startup –
- Finding Product Market Fit.
- Hiring and building a world-class team.
- Making Money.
- Later, how to build an organization that scalably and repeatedly launches great products.
Product Market Fit is the hardest challenge.
Step 1 – How can you create a market?
By definition, market research is not going to help because you will create a new market.
Finding a hidden need is the key. What are you a substitute for, what need are you serving better? What job are you being hired for? Where are you getting pulled? Where are people hacking the thing you got and using it in a way you did not intend? Double down on that.
Often what you create will initially seem to fit into an existing market but with less functionality. With the fullness of time, it will become obvious that the job your customers are hiring you for is completely different than the incumbents.
Step 2 – How to build a remarkable product?
The following are necessary to build a remarkable product –
- Talk to the customers. Develop a market thesis.
- Listen to their problems not their solutions. It’s absolutely critical to talk to customers and understand their pain. No amazing product was ever created in a vaccum and delivered perfectly on V1. Listen to their proposed solution but dig deeper.
- Rapid prototyping & user testing – Building a fully functional product is the most expensive possible way to test your hypothesis. Focus on getting to a functional prototype as quickly as possible that you can get in front of users.
- Don’t worry about scaling monetizing etc. Expect it will take 10x the number of expected iterations but keep your burn low.
- Build a team that can do this quickly.
- Build the solution to their problems.
- Test the solution with them: Two important rules – i. Make sure you are talking to your target customer.
ii. Don’t overthink it. Anecdotal is okay. Most helpful tools in the early days are i. Customer interviews, and i. UX testing sessions. In UX testing session do the following things:
- Get someone to use your app/service in front of you.
- Encourage them to give open and honest feedback.
- Ask them to perform a task.
- Do not say or do anything.
- Watch in extreme agony as they struggle to figure it out
Step 3 – When to Launch?
Minimal viable and remarkable product. It is said by Paul Buchheit that “Launch when your product is better than what’s out there.”
Step 4 – How to Prioritize?
There are two important points here –
- Only one thing matters – Focus only on the things that get you to your next milestone (Here that’s product market fit).
- Optimize for learning – Most people prioritize by creating a list sorted by cost x benefit. Instead, ask yourself “What is our biggest unknown that would rewrite our priority list.”
Step 5 – How do I know when I have achieved product market fit?
Three key metrics –
- Returning usage (Day 1,3,7,30 retention).
- Paying customer renewal rates: Metrics not included –
- Signups – These are more of a reflection of market fit than product-market fit. You have identified something a lot of people want but did you build the right solution?
- Conversion Rates – It can often be tactical and unrelated to product-market fit. All conversion rates start low.
When customers start beating a path to your door then you will know you have achieved product-market it.
Beyond Product Market Fit
Three key things a startup needs to do –
- Product that is meaningfully better than alternatives.
- How to acquire customers in a differentiated way that scales.
- Invent your business model without killing your traction.
Step 6 – Scaling the team
Do not scale team past 20 before the product market fit. A moderate amount of micromanagement is healthy at this stage. You should be involved in anything important and know all there is to know about your customers.
This helps you make a fast and high-quality decision. Do not delegate anything important Once you have found product market fit, scale aggressively. Then you have found a new market because you are in a race to capture this new market. Build the team aggressively but thoughtfully
No more micromanaging is needed at this stage.
Step 7 – Building a Brand
Great brands are built on a core consumer insight ideally the same one your product is built on.
Extremely powerful if you can identify and articulate this insight early on to form the basis of all your communications and marketing. More than anything else this is the foundation of your brand.
0:00 – Introduction
0:25 – What is Weebly and Journey of Weebly
9:31 – What is product-market fit?
11:11 – Top early challenges at a startup
12:25 -How can you create a market?
16:10 – Steps of building a remarkable product
26:20 – When to launch
33:24 – Beyond Product Market Fit
35:38 – Scaling the team
38:55 – Building a Brand
41:30 – Q&A