Episode 603 | Bootstrapping HotJar to $40M ARR Using D2C Marketing

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May 17, 2022

David Darmanin, co-founder of Hotjar, discusses how they bootstrapped the analytics tool to an impressive $40 million ARR with a remote team. He shares their unique direct-to-consumer marketing strategies that set them apart from competitors. David reflects on the lessons from a failed launch that shaped their success, the pivotal pre-launch tactics that built a subscriber list of 60,000, and the emotional complexities of selling the company after a 9-figure exit.

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ANECDOTE

Unconventional Financing

David Darmanin and his Hotjar co-founders financed the business in an unconventional way.
Darmanin continued consulting, invoicing clients through Hotjar, while his ex-boss contributed some capital.

INSIGHT

D2C in B2B

Hotjar's direct-to-consumer approach in B2B SaaS was inspired by Paul Graham's essay on consumerization of enterprise.
This approach prioritized excellent customer support, recognizing the importance of human connection in digital transactions.

ADVICE

Customer Respect

Prioritize building strong customer support as a core value.
Treat customers with respect, acknowledging the human element in digital interactions.

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In episode 603, Rob Walling chats with David Darmanin, one of the founders of Hotjar. Hotjar was bootstrapped to $40 million ARR with a fully distributed team of 170 employees. David and his cofounders sold the company for a 9-figure exit in 2021.

From their incredible launch story and their unique DTC approach to sales and marketing in a B2B SaaS business to David’s mental models and the thought process behind selling the business, there is no shortage of key insights in this episode.

Topics we cover:

[5:07] How David initially financed building Hotjar

[8:11] The biggest difference between Hotjar and its competitors

[12:03] The unique approach that David took when launching Hotjar

[12:44] Lessons learned from a failed product launch prior to Hotjar

[15:01] How they built their initial launch list to 60,000 subscribers

[19:32] How to know how much to spend on paid ads

[24:53] Why David said it was easy to work 60-80 hour workweeks for the first 6-9 months of Hotjar

[27:22] The two key ingredients needed if you want to sell a low-priced SaaS product

[30:31] How they tripled their growth from $1M - $3M in the first year

[33:26] How their initial launch strategy gave them a major competitive advantage when they started doing content marketing later on

[34:03] What led him to sell Hotjar

[40:39] How long the exit process took

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