How ClickUp Bootstrapped to $10m ARR and Scaled to 9-figures in Revenue with Zeb Evans
Sep 19, 2024
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Zeb Evans, the Founder and CEO of ClickUp, shares his journey, influenced by six near-death experiences. He recounts early entrepreneurial ventures, including one that brought the FBI to his door, and lessons learned from his time at Disney. Zeb reveals how ClickUp bootstrapped to nearly $10 million in ARR, discusses hiring lessons while scaling to 800 employees, and highlights the importance of listening to user feedback. He also dives into ClickUp's product evolution and their recent chat feature launch.
Zeb Evans' entrepreneurial journey shaped his business mindset, influenced by early ventures that involved both creativity and confrontation with authority.
ClickUp's initial growth strategy relied on scrapping competitor reviews to reach dissatisfied users, effectively addressing customer pain points.
The rapid scaling of ClickUp from 100 to 800 employees led to cultural misalignments, highlighting the necessity of hiring committed individuals.
ClickUp's significant product rebuild amidst technical challenges taught the importance of transparency and solid engineering practices for user retention.
Deep dives
Bootstrapping Success and Initial Growth
ClickUp experienced steady growth without external investment, reaching close to $10 million in annual recurring revenue (ARR). Early on, the company's growth was slow but compounding, leading to consistent monthly increases of 30 to 40%. Despite this success, founder Zeb Evans felt a lack of achievement due to the absence of traditional benchmarks, and he did not recognize the company's potential. The company started as an internal tool, indicating a practical approach to development by meeting internal needs before scaling outward.
Early Entrepreneurial Endeavors
Zeb Evans' entrepreneurial journey began at a young age with diverse ventures, including selling wholesale toys and candy. His early sales experiences also included selling bootleg DVDs, which led to a confrontation with authorities, marking a formative moment in his business learning. This early ambition cultivated a strong business mindset, even when he faced challenges, such as getting suspended for his entrepreneurial activities. These experiences laid the groundwork for his later ventures and the development of ClickUp.
Innovative Customer Acquisition Strategy
To acquire ClickUp's first customers, the team developed a script to scrape reviews from competitor sites, targeting dissatisfied users. By reaching out to individuals who rated competitors poorly, they effectively engaged potential customers looking for better alternatives. This growth-hacking tactic exemplified the resourcefulness needed for a bootstrapped startup, enabling ClickUp to establish its presence in a competitive market. The success of this approach underscored the importance of understanding customer pain points.
Lessons from Rapid Scaling
ClickUp scaled quickly from 100 to 800 employees within a single year, which led to hiring challenges and misalignments in company culture. Zeb highlighted the mistake of hiring individuals who were not deeply committed to the company's mission, resulting in further hires of similar profiles. This misstep caused issues in maintaining a strong organizational culture and alignment with company objectives. The reflection on these hiring mistakes emphasizes the critical nature of recruiting passionate individuals who align with a company's core mission.
Near-Death Experiences and Product Rebuilding
During a critical phase, ClickUp faced serious technical challenges that required a complete rebuild of its product infrastructure. Zeb described this as the company's near-death experience, where performance issues threatened reliability, affecting user retention. The process of rebuilding taught valuable lessons about transparency with customers and the importance of solid engineering practices. This period of adversity ultimately strengthened the company's product and its commitment to delivering a reliable user experience.
AI Integration and Innovative Product Features
Embracing the wave of generative AI, ClickUp launched various automation features designed to enhance user productivity. Integrating AI project update generators and task automation exemplified the company's forward-thinking approach to product development. Zeb emphasized that the focus was not only on basic writing capabilities but on creating tools that would genuinely improve workflows and save time for users. The introduction of AI features aims to position ClickUp as a leader in productivity solutions, enhancing its competitive edge in the market.
Navigating Investment Opportunities
Zeb's initial reluctance to seek investment stemmed from the desire to maintain control over ClickUp's direction, influenced by stories of founders being pushed out of their own companies. Despite early interest from investors, he ultimately did not proceed with fundraising until he saw an increase in competitive pressure. Securing funding from investor partners who valued collaboration marked a significant turning point for ClickUp, allowing it to scale effectively. This experience underscored the importance of aligning with investors who understand and share the vision for long-term growth.
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He’s had six near death experiences, and we talk about how those influenced him throughout life. We also talk about some of his early businesses, including one that had the FBI at his house when he was a kid, and lessons driving the monorail at Disney.
We also get into the founding story of ClickUp, bootstrapping to $10m in ARR, hiring mistakes from scaling too fast, why Zeb likes hiring users, how ClickUp shipped generative AI features so fast, its new chat product launched earlier this week, and the trend of software convergence.
Timestamps: (00:00) Intro (02:11) Zeb’s first near death experience (08:19) Childhood businesses that had the FBI at his house (18:23) Lessons from driving the monorail at Disney (25:19) Mistakes scaling from 100 to 800 employees in one year (31:04) Dropping out of college after being robbed at gunpoint (33:19) How building a CraigsList competitor led to ClickUp (35:32) Three waves of ClickUp’s product evolution (39:25) How the product slowly got worse over time (44:45) Hiring the guy who built Microsoft Teams to rebuild ClickUp (48:11) Zeb’s favorite interview question (49:59) Daily 5am standups in the first year (54:28) How ClickUp got its first customers (57:16) Bootstrapping to $10m in ARR with strong retention (58:13) Zeb’s best kept secret, user surveys (and how to run them) (1:02:42) The trend of software convergence (1:08:26) Reasons Zeb likes hiring users (1:12:19) Why VCs didn’t invest, and why it led to a better business (1:19:02) Raising from Craft, Georgian, and a16z (1:21:08) Peter Thiel: “I think you’re right” (1:24:35) How ClickUp was early to AI (1:28:03) Launching chat and video calls to hit ClickUp's original vision (1:32:02) What Zeb’s excited and cautious about in AI (1:37:24) Why Zeb journals every day
