20VC: Monday.com: Scaling from $6M to $120M in ARR in 3 Years | How Monday Have Built the Best Performance Marketing Engine in SaaS | Going Upmarket, International and Multi-Product; The Biggest Lessons and Mistakes with Eran Zinman
Jan 17, 2025
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Eran Zinman, Co-founder and CEO of Monday.com, shares his remarkable journey of scaling the company from $6M to $120M in ARR in just three years. He discusses the pivotal role of video games in his success and valuable lessons learned from failures. Zinman elaborates on strategic marketing, including effective YouTube ads, and the challenges of transitioning to a multi-product strategy. He reflects on the emotional rollercoaster of the IPO experience and the dynamics of their unique co-CEO structure, emphasizing collaboration and personal wellness.
Monday.com scaled from $6M to $120M in ARR within three years, showcasing resilience despite initial funding rejections from investors.
The importance of learning from failures was emphasized, as it allowed the company to adapt and pivot effectively based on user feedback.
A robust performance marketing engine enabled Monday.com to optimize cash flow and marketing strategies, supporting their rapid growth in the competitive SaaS market.
Deep dives
Rapid Growth and Funding Challenges
The company experienced significant growth, advancing from 6 million to 120 million in annual recurring revenue (ARR) within three years, despite facing challenges in securing funding early on. Investors initially struggled to grasp the company's vision and potential, leading to a high rejection rate from venture capitalists. However, with strategic partnerships and resilient execution, the company's financial progress soon became undeniable, culminating in a public listing with a market cap of 12 billion. This narrative demonstrates the importance of perseverance and adaptability in the entrepreneurial journey.
Embracing Failure as a Learning Opportunity
The co-founder recognized that failure is an integral part of success, emphasizing the value of learning from setbacks. After a challenging first startup experience, he realized that fear of negative feedback hindered his ability to innovate and adapt. Committing to a mindset that welcomed failures allowed the company to gather user feedback early and pivot effectively during its development stages. This DNA of continuous improvement remains vital to the company’s culture and approach today.
Pivoting to Meet Market Needs
Initially focused on communication tools, the company faced slow traction before pivoting to a project management framework that addressed market gaps. This pivot towards a customizable platform was informed by customer interviews, revealing a lack of dominant players in work management solutions. By enabling users to tailor the product to their unique needs, the company differentiated itself in a crowded marketplace, attracting a diverse range of clients. This adaptability played a crucial role in the startup's subsequent success.
Building a Performance Marketing Engine
The company developed a robust performance marketing engine, termed 'Big Brain,' to efficiently manage and analyze data-driven marketing campaigns. This internal tool tracked campaigns' effectiveness, enabling the team to refine their marketing strategies and optimize cash flow. The emphasis on cash flow over traditional SaaS metrics allowed the company to quickly generate returns on marketing investments, thereby funding further growth. This focus on measurable results is a key aspect of the company's operational strategy.
Navigating Co-CEO Dynamics
The co-CEO structure has proven successful, fostering collaboration and shared responsibility in decision-making. The co-founders prioritize communication, walking together to discuss company matters, which strengthens their partnership. This unique arrangement has encouraged an open atmosphere where both leaders can seamlessly adapt their roles based on context, which helps mitigate ego conflicts. Their emphasis on transparency and alignment has contributed to the company's ability to scale effectively.
The story of Monday.com is insane, turned down by most VCs, then scaled from $6M to $120M ARR in just three years. Today the company is public with a market cap of $12BN. Joining us in the hotseat today is Monday's Co-Founder and CEO, Eran Zinman.
In Today's Episode with Eran Zinman We Discuss:
03:03 The Role of Video Games in Founders' Success
04:12 The Fail That Taught a $10BN Founder Everything
09:40 Pivoting to a $12BN Company: How, When and Advice on Pivots
14:15 Why 99% of Investors Turned Monday Down: Fundraising Lessons
17:05 Building a Performance Marketing Engine
21:25 How to Scale ACV and Move Upmarket
28:54 What Have Been the Most Effective Marketing Strategies
29:08 How Have Monday Been So Successful with Youtube Ads?
29:43 Biggest Challenges and Lessons in Channel Spend
30:50 Building a Multi-Product Strategy: The Rise of Monday CRM
34:37 Competing in the SaaS Market: Is Competition Good?
39:30 The IPO Journey: Why Then? Pros and Cons of Being Public?
42:38 How a Co-CEO Structure Works
43:55 How to Manage a Board
45:04 Quick-Fire Q&A
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