421: Missive: How a Tiny Team Built a $6M SaaS Without VC Funding - with Philippe Lehoux

Summary

Podcast Summary: The SaaS Podcast - Episode 421: Missive: How a Tiny Team Built a $6M SaaS Without VC Funding with Philippe Lehoux

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I. Introduction

In Episode 421 of The SaaS Podcast - SaaS, Startups, Growth Hacking & Entrepreneurship, host Omar Khan sits down with Philippe Lehoux, the co-founder and CEO of Missive. Released on November 21, 2024, the episode delves into Missive's journey from a modest three-person team to generating nearly $6 million in Annual Recurring Revenue (ARR) without relying on venture capital funding. Philippe shares invaluable insights on product development, navigating early struggles, innovative marketing strategies, and scaling a SaaS business sustainably.

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II. The Genesis of Missive

[06:00] Philippe recounts the origins of Missive, highlighting how the company initially focused on a Shopify app business before identifying a significant pain point in team email usage. "We realized that fixing how teams used email could have a profound impact," he explains. This realization led to the pivot from their existing business to developing Missive, a collaborative email client designed to streamline team communication.

Notable Quote:

"Keep things simple." — Philippe Lehoux [03:49]

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III. Building Missive: The Early Days

Missive was conceived as a collaborative email client, merging functionalities of Gmail and Slack to facilitate better team collaboration through email. Philippe and his co-founders invested their resources into developing Missive, dedicating over a year without generating any revenue. This period was marked by intense coding, customer support, and a relentless focus on product excellence.

Key Points:

• Product Concept: A collaborative, multiplayer email client addressing email delegation, customer support, and team communication.
• Bootstrapping: Funded entirely through revenue from their Shopify app, allowing them to maintain full ownership and control.
• Product Development: Emphasis on building a tool they personally needed and used, ensuring deep product-market fit.

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IV. Overcoming Growth Challenges

Upon launching Missive, initial traction was minimal. It took two years to reach the first $10k in Monthly Recurring Revenue (MRR). Philippe reflects on the perseverance required during this slow growth phase, highlighting the team's commitment to refining the product despite limited marketing efforts.

Notable Quote:

"We were geeking out around that idea and just pretty much enjoying ourselves, geeking out on that idea." — Philippe Lehoux [08:18]

Challenges Faced:

• Slow Initial Growth: Minimal visibility and slow customer acquisition.
• Resource Constraints: As a three-person team, managing all aspects from development to customer support was daunting.
• Customer Feedback: Early users were mostly solo practitioners, leading to high churn rates among individual users.

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V. Marketing Strategies and Growth Hacking

Philippe emphasizes a minimalist approach to marketing, focusing primarily on product development. However, recognizing the need for growth, the team employed several unconventional strategies:

1. Product Hunt Launch:

   • [12:33] Missive's launch on Product Hunt generated initial interest, especially among tech enthusiasts and indie developers.
   • This platform facilitated early conversations and feedback, albeit mostly from solo users.

2. Cold Outreach on Social Media:

   • Engaging in relevant conversations on platforms like Twitter.
   • [14:01] Philippe would offer Missive to users discussing challenges with existing email solutions, ensuring interactions were contextually relevant and non-intrusive.

3. Versus Pages:

   • [15:53] Creating comparison pages against competitors to capture search traffic.
   • These pages highlighted Missive's unique features and positioned it as a viable alternative to well-funded Silicon Valley counterparts.

Notable Quote:

"Being different is good." — Philippe Lehoux [50:39]

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VI. The Role of the Affiliate Program

One of the most pivotal growth drivers for Missive was their innovative affiliate program. Rather than relying on third-party affiliate services, Missive integrated the program directly into their product.

Key Strategies:

• Built In-House:
  • [33:05] The team developed a custom affiliate system to maintain control and align it closely with the product's ethos.
• Customer-Centric Approach:
  • Affiliates were primarily satisfied customers and professional marketers who genuinely believed in Missive.
  • This authenticity ensured more effective and trustworthy promotions.

Benefits:

• Seamless Integration: Affiliates could promote Missive directly from the product dashboard, enhancing visibility.
• Reduced Dependency on Paid Ads: By empowering users to advocate for Missive, the company minimized marketing expenses while expanding their reach organically.

Notable Quote:

"Keep things simple." — Philippe Lehoux [03:49]

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VII. Shifting Focus to Teams

Initially, Missive attracted a significant number of solo users, but Philippe observed high churn rates in this segment. To address this, the team strategically shifted their focus towards small and medium-sized businesses (SMBs) that required collaborative email solutions.

Key Adjustments:

• Pricing Strategy:
  • Increased pricing to make Missive less accessible to solo users while remaining affordable for teams, thereby reducing churn and focusing resources on more stable customer segments.
• Product Enhancements:
  • Developed features tailored for team collaboration, such as email delegation and internal communication tools.

Outcome:

• Reduced Churn Rates:
  • Organizational users experienced a churn rate of 1.6%, compared to 16% for solo users.
• Enhanced Value Proposition:
  • By catering to team-based needs, Missive strengthened its position in the market as a collaborative email solution.

Notable Quote:

"Anything you do, you always need to find a way to insert yourself in a movement." — Philippe Lehoux [26:35]

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VIII. Scaling the Team

As Missive began to gain traction, the limitations of a three-person team became apparent. Philippe strategically expanded the team to 11 members, focusing on roles that would support sustained growth and product quality.

Key Hires:

1. Developers:
   • To manage the complex and evolving nature of email integrations and API support.
2. Operations Person:
   • [43:42] Hired Jenny for operations and customer experience, enabling the founders to delegate support tasks and focus on long-term strategy.

Approach to Scaling:

• Maintaining Simplicity:
  • Continued emphasis on keeping the team small (targeting a maximum of 20 members) to preserve agility and a strong company culture.
• Systematization:
  • Developed documentation and processes to ensure smooth onboarding and consistent product development practices.

Notable Quote:

"Keep things simple." — Philippe Lehoux [03:49]

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IX. Key Insights and Lessons Learned

Philippe shares several core principles that have driven Missive's success:

1. Simplicity Over Complexity:

   • Avoid unnecessary tasks and focus on the core product. "Never spending time on imaginary problems or creating fake work," he notes [39:33].

2. Product-Led Growth:

   • Building a product that users love and naturally advocate for it can be more effective than aggressive marketing tactics.

3. Perseverance Pays Off:

   • Sustained effort and commitment during slow growth phases can lead to significant long-term rewards.

4. Authentic Marketing:

   • Leveraging genuine user enthusiasm through affiliate programs can drive organic growth without the high costs associated with traditional marketing.

5. Adaptability:

   • Being willing to pivot and focus on more profitable segments (e.g., shifting from solo users to SMBs) is crucial for sustainable growth.

Notable Quotes:

"Keep things simple." — Philippe Lehoux [03:49]

"Being different is good." — Philippe Lehoux [50:39]

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X. Lightning Round Highlights

Towards the end of the episode, Philippe participates in a lightning round, sharing personal insights and preferences:

1. Best Business Advice:

   • Philippe: Values the principles from Basecamp books and insights from industry leaders like David Heinemeier Hansson (DHH).

2. Book Recommendation:

   • Philippe: Prefers biographies, recently enjoyed "Black Spartacus", appreciating stories of impactful individuals to gain perspective.

3. Attribute of a Successful Founder:

   • Philippe: Attention to detail and caring about the small aspects of the business.

4. Favorite Productivity Habit:

   • Philippe: Engages in regular gym sessions with a trainer, emphasizing the importance of physical well-being.

5. Crazy Business Idea:

   • Philippe: Aspires to start a cider farm, combining his love for social drinking with entrepreneurial ambition.

6. Fun Fact:

   • Philippe: Proud father of four children.

7. Passion Outside Work:

   • Philippe: Passionate about his work, finding fulfillment in building and growing Missive.

Notable Quote:

"I have four kids." — Philippe Lehoux [49:37]

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XI. Conclusion

Philippe Lehoux's journey with Missive exemplifies the power of bootstrapping, product-centric development, and innovative growth strategies. By maintaining a lean team, focusing relentlessly on product quality, and leveraging authentic marketing channels like affiliate programs, Missive has achieved remarkable success without external funding. Philippe's philosophy of keeping things simple and staying true to the core mission offers valuable lessons for aspiring SaaS entrepreneurs navigating the complexities of building and scaling a startup.

For more information about Missive, visit missiveapp.com. To connect with Philippe, you can reach out via Twitter or LinkedIn.

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Notable Quotes with Timestamps:

• "Keep things simple." — Philippe Lehoux [03:49]
• "We were geeking out around that idea and just pretty much enjoying ourselves, geeking out on that idea." — Philippe Lehoux [08:18]
• "Being different is good." — Philippe Lehoux [50:39]
• "I have four kids." — Philippe Lehoux [49:37]

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This comprehensive summary captures the essence of Episode 421, offering listeners and non-listeners alike a detailed understanding of Missive's entrepreneurial journey and the key strategies that fueled its growth without the backing of venture capital.

Transcript

[Omar Khan]

Welcome to another episode of the SaaS podcast. I'm your host Omar Khan and this is a show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business. In this episode, I talked to Philippe Lehoux, the co founder and CEO of Missive, a tool that helps teams work better together through email. In 2015, Philippe and his co founders were doing well with their Shopify app business. But they spotted a big problem with how teams used email and decided to fix it. Using money from the Shopify app, they started building Missive and for over a year they poured everything into it without making any money. It was a big gamble for the founders. When they finally launched, hardly anyone noticed. Growth was painfully slow. For two long years, they struggled to reach the first 10k in MRR. Many would have thrown in the towel, but Philippe and his co founders kept going. They stayed a tiny team of three, doing everything themselves, from writing code to helping customers. And they focused on building a great product instead of marketing, which meant getting new users was even tougher. But their different way of doing things eventually started to pay off. They came up with an unusual affiliate program that began to bring in more users. Word started to spread slowly but surely, and their commitment to keeping things simple began to resonate with customers. After years of using their own money and staying small, they finally hit a grow growth spurt. In just the past year, they've grown from three to a team of 11 people. Today, Missive helps around 3,700 businesses, generates almost 6 million in ARR. And they've done all this without taking any outside money and going toe to toe with competitors who have big investors backing them. In this episode, you'll learn how Philip handled the risky move of building Missive for over a year without making any money, the tough times during their first two years after launch, and how they pushed through. Why their unusual affiliate program became the key to growth when they realized regular marketing didn't work, how staying small and focused helped them compete with bigger, well funded rivals, and why they put the product first and how this approach eventually led to their success. So I hope you enjoy this episode is brought to you by Attio, the Next generation of CRM. Now imagine a world where your CRM is powerful, easily configured and deeply intuitive. Well, Atio makes that a reality. You can set it up in less than a minute and in seconds of syncing your email and calendar, you'll see all your relationships in one place, all enriched with valuable data. You can also build zapier style automations, get powerful reports and seamlessly handle any go to market motion. From PLG to sales led, Attio is designed for the next era of companies like yours. So it's time to say Goodbye to inflexible one size fits all CRMs and join industry leaders like 11 Labs, Replicate, Modal and more. To scale your startup to the next level, you can try Attio for [e-mail] that's attio.com. are you building a software product? Then you probably know how challenging it is to find competent engineers. You don't have to micromanage and then you have all those worries. Will this app work correctly? Can it handle millions of users without crashing? Can I trust these developers when I don't know what they're doing? That's where Axle Hub comes in. With 10 years of software experience, they do things differently. You'll work directly with Phil, their CEO and technical leader. No middlemen, no managing multiple developers. Phil guides the entire process and personally oversees your product. Think of him as your technical co founder minus the equity stake. He brings his expert team to build your app right from day one. Ready to make quality software without the headaches, visit axelhub.com that's a x e l h u b com Philippe, welcome to the show.

[Philippe Lehoux]

Hey, thanks Almer.

[Omar Khan]

Do you have a favorite quote? Something that inspires or motivates you that you can share with us?

[Philippe Lehoux]

I don't know. Keep things simple. Pretty simple quote.

[Omar Khan]

That's great. So tell us about Missive. What does the product do? Who's it for? What's the main problem you're helping to solve?

[Philippe Lehoux]

All right, so it's a collaborative email client. So think of like a multiplayer email client, like if Gmail and Slack were merged in the same product. And just doing that kind of makes Missive a solution for many types of problems like email delegation, customer support, just team communication and whatnot.

[Omar Khan]

And yeah, and basically I think who you're for is like anybody who uses email or collaborates with teams, right?

[Philippe Lehoux]

Yeah, I would say SMBs. So small and medium businesses were not a tool like for a call center, but SMBs. And pretty much all SMBs do emails. Usually with the SMBs that like email is part of their core communication strategy. Right. People emailing a lot like people in finance, lawyer, travel agency. Like any businesses that rely on email.

[Omar Khan]

To communicate with their customers and give us a sense of the size of the business. Where are you in terms of revenue, customers, size of team.

[Philippe Lehoux]

Right. Right. Now we're around, we. We serve around 3700 businesses and the MRR is at 480k per month USD. And the team size now we're 12. But 11. Sorry, 11. But we were just 3 still like a few months ago, like a year ago. So we just recently expanded the team.

[Omar Khan]

Great, so you're closing in on 6 million in ARR. The business was founded in 2015 and you've bootstrapped it all the way. You haven't raised any money?

[Philippe Lehoux]

Yeah, we still own 100% of the business.

[Omar Khan]

And you're profitable?

[Philippe Lehoux]

Yes.

[Omar Khan]

Okay, great. So let's go back to 2015. Like what were you doing at the time and where did the idea for Missive come from?

[Philippe Lehoux]

So me and my co founder at cnn, Raphael, we were bootstrapping another business pretty much like a name badge editor. Like so let's say you had a conference, you won name badges, you come on our website, you connect Evanbright, you design your name badge and we would print and ship them to you. And so we had relatively good success with that. We could ditch our job being full time on conference badge. But quickly we realized like that's actually not a technological challenge that we enjoy fixing. So let's like use that as a way to bootstrap something more ambitious. And I don't know where or how but like at some point I think I was making a lot of typos in my emails and like the guys was like, let's just like bring collaboration in emails so we can like bulletproof your emails. And then just like we start to work on like a Nemo and then launch it for free in 2015. And then I think our first customer was 2016. Yeah.

[Omar Khan]

And of course before you wrote any code, you went out and talked to a bunch of customers and did a bunch of customer discovery. Right?

[Philippe Lehoux]

00. We were our own customer. Like we were dog fooding this. So for the first year it was just us pretty much working on this without talking about it to anyone.

[Omar Khan]

And the first business you ended up selling that, right?

[Philippe Lehoux]

Yep. Last year we sold it to Tiny from Andrew Wilkinson. It's a, it's a business that totally was annihilated by Covid conference badge.com and then so post Covid we could like we, we, we successfully brought revenue back and then quickly like given like miss events at quite a lot of success. We couldn't invest more time in it and run it in parallel. So I contacted, I think three weeks later it was sold. So yeah.

[Omar Khan]

Wow. Okay, cool. So the three of you start building missive. And how long did it take to get that first version of the product out? And were you really just building it for yourself or did you have some kind of customer in mind?

[Philippe Lehoux]

I would like to say that we had communicate or exchange with people. It was pretty much just like, let's build a cool product for us first. I remember that when we were working on conference, we were using Kickoff. Kickoff was like IP chat or Slack, before Slack and they were sold to Stripe and we really liked it. And when they were sold to Stripe, like, okay, let's build an email client with chat in it so we can actually do our internal and external comm inside the same application. So we were geeking out around that idea and just pretty much enjoying ourselves, geeking out on that idea. And then obviously it took a long time. And after we launched for real, we stopped to talk to customer and it took a long time. I think it took two years to get to 10K MRR. And in those two years we had a lot of conversation. There's things we did not have in V1 that was required for a lot of people. And it was assignment, right? So people have emails, they want to be able to take them and assign them to other people in their team. So just the ability to chat in between email was just not good enough in V1. So we had to talk to customer eventually to understand where's the value in such a product. And then iterate, iterate, talk to customer. Iterate, iterate, talk to customer. And then eventually we started to have more traction with our early customers.

[Omar Khan]

So it purely started from scratching your own itch, a problem that you were having, and then just following your curiosity and basically a bunch of geeks who are like, yeah, we love building products, so let's just spend a bunch of time building something that we're really excited about. And then you, you went out there and started to find customers. Basically what we tell most founders not to do. It's like how you guys started, right?

[Philippe Lehoux]

But, but the important thing is to know we had a conference badge which was a profitable product. We could run for a few hours per month, right? So pretty much it was running so big, people were ordering name badges and then we had a printing partners doing that stuff. So we're pretty much just doing customer support for those. And the rest of our time was available to do missive. Right? And I would never have done missive without this first because like the scope is the ambition of working on an email product. You soon realize, okay, it's not like a two months project. Right. It's probably a lifetime project now.

[Omar Khan]

Yeah, yeah. I mean I think that's a huge factor. The fact that you had that other business and it takes a lot of pressure off and that was the question I was going to ask you, was like of all the stuff that you guys could have built, this is like a complicated piece of technology and wasn't there something simpler you could have done? And it's like now it makes a lot more sense that it's like you've got a business, it's paying the bills, you don't have that much pressure and it gives you that freedom to be able to really explore something that you feel like it's challenging or you want to go and fix and stuff. So you ended up launching a free version of Missive, I think you told me end of 2015 and then it took what about a year or so to get the first 10 customers.

[Philippe Lehoux]

Our first 10 customer I think was probably five to six months. The first customers was Conference Badge. Obviously we were doing all of the support and everything with it. But then I think it took probably six months before having our first 10 customers. And to this day the first two real customer, they're not Conference Badge obviously because it's us, but the first two customers, they were still Missive customers. So there's one which is a solo user, but there's a team. Kenny Kenny is a product feedback startup you can use to gather feedback on your product. They've been like our first customer and they're still around.

[Omar Khan]

Wow. How did you get the word out? How did you find those first 10 customers?

[Philippe Lehoux]

I think Cane was probably us call reaching them or via Product Hunt. I think we launch on Product Hunt and that start a few conversation. You know, when you release an email client, it's exciting for a lot of people because like there's a lot of already ad tech adopters and they want to try everything. And our first version was kind of cool, right? It was kind of beautifully designed for 2016 and or 15. And so we had a lot of good feedback of people interested in the tech that we were building. It's just like they were not necessarily teams, right. So they were mostly like solo user or developers. I mean in 2050s product Hunt was mainly, I guess it's still the same but it was mainly like indie hacker and people. Everyone on Product one was pretty much people trying to launch a product on Product Hunt. That started a few conversation and I think Canny was our real first team customer. I think we found them via product.

[Omar Khan]

So product hunt. And then you were spending time on like, was it communities or Twitter or wherever and just like where, you know, starting conversations wherever you heard people talking about issues with, you know, other products.

[Philippe Lehoux]

Yeah, that was just one of the most effective strategy initially was like, hey, like let's say there was a conversation about, on Twitter about how do you do support? How do you do support around email in your business? I would go and like, hey, I built that product. You can try it for free. Or if people were talking about a competitor product, like another email app or another help desk, I would drop in. Hey, we have a new way to work around your customer support. It's a really client noted for a help desk. And the reaction was surprisingly always good. And I think a lot of people converted with this. At first I was, it's not like I'm not a marketer, like I don't like to interrupt people, like, I don't like sales call. So to me at first that was not something easy to do. But I learned that because it was relevant to the conversation people were having. It was not salesy, like reception was always extremely good. And I think that a lot of our early success were from those social media conversations.

[Omar Khan]

So would it be fair to say that the majority of your effort, all the founders was about building the product or was it like, okay, we're going to spend like half the time on product, half the time on growth.

[Philippe Lehoux]

It was 90% time on product. I mean, I'm the only one who did marketing. I did two other was 100% product and I probably spent just 10% of my time on marketing.

[Omar Khan]

Okay, so you were doing this sort of code outreach, just looking for opportunities to start conversations. And then you started building these alternative pages. Right, or versus pages. Can you talk about that?

[Philippe Lehoux]

Yes. Our competitors most of the time massively funded Silicon Valley businesses. So they had first they did a lot of marketing, good marketing, and they were able to educate people on what is a shared inbox or, you know, how what is a good modern email client or. And so we were looking for a way to write those, you know, so let's say they spend 20 million in marketing and we can actually insert ourselves in the conversation when people are dissatisfied with them or they're actually, when they're planning to buy them, looking for their other product that are similar to it. So we build those long versus page. Like not, you know, there's two types of versus page. Just like, hey, this is our product and it's five bullet points and it's always the same against each, like, product or versus page rate. In our case, it was like, hey, you cannot do that or you can do that, or yeah, it's actually this product is best for this use case, but our product is based for this product. So we tried to do an honest job there. And all product were always evolving. So sometimes we had email. Hey, you're saying that in your versus page. Oh, sorry. And we would, like, fix it or change a copy to still make it fair. And I think to this day, that's probably our most successful marketing initiative. And still today, we still rank good for a lot of those pages, even though we don't really put much effort in those anymore.

[Omar Khan]

I mean, the thing with those pages is, like, everybody does them now, and it's getting harder and harder to rank in terms of organic search for those pages, especially if you're competing against some of the bigger players. And probably, I'd say most people are getting to the point where they probably don't believe what it says on the page anyway. Right? Because it's so biased most of the time. But it's still a great way for people to discover you. Right? And it's like, they may still be skeptical, but it's like, okay, great, there's another product on the list. I'm looking for something else. I should at least check them out.

[Philippe Lehoux]

Yeah, definitely. It's normal, actually. People are skeptical. I am extremely skeptical customer. So I wasn't expecting people to read those pages like, oh, you know, that other. Because all products are, you know, those other products, they're goods in their own niches or they offer things that we don't. So I tried to do something first. But yes, the idea was having people to download missive and actually, like, try it or attend our webinar where we could explain the difference. And because those other products, like Front Superhuman, invested so much in marketing, even if we could insert ourselves in just 5% of the people that knew about those, it would still be a big win for us. And a lot of time was the crazy part is, like, I was doing all the webinars for a long time, and a lot of people that use those products for a few years and then discovered us when they were unsatisfied via the Versus page, sometimes they were pissed. There was like, what? You've been around since 2015. Like, come on, man, beef up your marketing, man. Why didn't I know about you? Right? You're a goddamn good product, right? So this is just an illustration that first we were writing the success of those other businesses and that we're absolutely the worst marketers.

[Omar Khan]

So when I was looking at missive, like we talked a little bit about this earlier, but before we started recording, like I was trying to like figure out the positioning. Where does missive fit? Because it was like, is this an email client that's sort of competing with, you know, the superhumans and other clients out there? Is this a team inbox that's competing with the Zendesks and fresh desks and those types of products? Or is this some kind of communication tool that's competing with Slack? And when I asked you that, you were like all of the above, right? And it was. And then, and then you gave me an interesting fact where you broke down and you said like, you know how horizontal your product is. Can you just explain that in terms of like the, the niches or the types of customers that you serve today?

[Philippe Lehoux]

Yeah. So if you look at our mix panel where we break down like our customer base and what industry they are, and we do that by first asking them in the product or by other ways looking at the domain and whatnot, and I think like the biggest industry is like 7% of our customer base. And I think it's like logistic and transportation, like freight brokers, things like that. Right. And then travel businesses, travel related businesses. So like travel agency people with many Airbnbs or things like that. And then there's lawyers, then there's financial accounting. Those are like 4, 5, 6%, never more than that. And in term of use case, we also ask in product, what's your use case with it? And it's all over the place. Right? It's in between like email delegation, customer support, just internal external communication. Like you said at the end, like Slack +gmail. Right. So all over the place. So we pretty much do like, we pretty much go against all business advices. Like in our zone tool product, we don't have any niches we're serving. It's like Gmail. We're pretty much doing Gmail Play. It's just an email app. Use it as best as you can. Of course, having said that, when we have conversation with customers, we try to understand they have a lot of different use case, but we try to come up with the essence of what's common in between all those industry, how they use it and build the feature around those things. But yeah, pretty horizontal.

[Omar Khan]

So how did you, how did you focus like where. I know you said you weren't sort of doing a lot of intentional marketing. You Were looking for some of these opportunities. Although you did start doing SEO and these, these landing pages. But when you've got a horizontal product, like every time I talk to a founder who's like trying to serve like multiple markets, it's like. And not, you know, struggling to get traction. You know, I always say like find one, one niche, one place you can start. It'll be easier to target those people. It'll be easier to figure out the right messaging, the right use case, all of that stuff and then you can expand from there. Did you guys try to do anything like that? And if not, like how did you, like how, like how did you market to the right people?

[Philippe Lehoux]

We really built missive at first for us, right? So I think that led us like when you build something that you deeply care about that you use daily. And a funny story is that initially after I think was probably in the first year we were for co founder initially and one was like, hey guys, it's not working. We should focus on conference bad and whatnot. Like should we stop doing missive? And like the four of us, the four of us, we sit down and I remember, I think it was a chin saying, like, well we can stop working on missive, but I know I would still code it in the nights and weekends because I still want to use it myself. Right. So that really what gave us the energy to work for so long, to escape and have velocity in others people industries that we didn't know about. Right. So I would say earlier probably the people in transportation and finance, that user were like early adopters willing to take a risk on such product. And because it was a new sexy email client, it was like they could project their own use case into missive. Right? Because it was like it was an email client in the end. Right. Everybody is doing email so people try to innovate with their workflow and whatnot. So I think those things allowed us to insert ourselves into those other industries without having to focus or you know, like target our marketing around their needs or whatnot. I'm not saying we won't do that. Obviously there's like we're growing a team, we want to invest more in marketing. So all those traditional things we're probably going to start doing now and have more like clear landing page for each industries, adding case studies with customers and whatnot. So obviously those things are all good. But I think initially for us it was important to build our horizontal product because we didn't want to restrict it to one specific use case on issues.

[Omar Khan]

And the versus Pages we talked about, how many of those did you start up building and how long did it take for them to start driving, at least move the needle in terms of the type of traffic you were getting?

[Philippe Lehoux]

I think the most successful one was all about new product as well. So we've been around for a long time. So anytime there was a new email like app, we would try to come up with a page like that, like front superhuman, short wave and whatnot. So I think we had success because we could insert ourselves, we could build content around new products. So there was no content about those products, right? So we built one for Slack that never had any traction, right? So we built one for Gmail that never had any traction. So it was our. It was. Those worked because those products were same age as missive, right? So I guess Google was like, okay, well, similar industry, similar product. Like, we should rank those guys at the same.

[Omar Khan]

Are you a surfer? No, because it's like you guys, it's like this thing. It's just every example you've given me is like finding these waves, right, that are sort of emerging and then figuring out how to ride them at the right time.

[Philippe Lehoux]

I think it's a good analogy and I think, yeah, any SEO success we had or content we had was always around a wave. And I think that's why it's important to be on social media or to read things on social media. Like last year when OpenAI released their chat GPT, it's like, it was instant for me. It's like, I mean, I do so many typos in my emails and it's like, okay, that thing can actually make me a good writer, right? And so it's like, I need that admissive. And I knew that if I would be the first email client with that, it would be good for SEO and content. So I think like a month later, we released the first, like, version of the OpenAI plugin. And then to this day, we're still like a best 2024 email client with AI. We're always in those lists, right? So that helped. That was writing the A waves, even though. But still, I built it for myself because I wanted it. But I think it's important. Anything you do, you always need to find a way to insert yourself in a movement. And that's how actually you can have an impact even if you're a small team. And obviously the success with AB is not like tremendous or exponential, but we still had some amount of success, right? And it's a good point. A lot of time was about Ensuring ourselves in a movement. Right.

[Omar Khan]

So, yeah, okay, so the, I guess the product today we talk about very horizontal, lots of use cases, but you're still very clear about the types of customers and the types of use cases. That missive is a great solution for and the people that you can help the most. In the early days, you had a lot of solo customers using the product. Were you. Were you marketing it as a collaborative tool from the beginning? And I know trying to support these solo users, you spent probably too much time on them until you said, no, look, we need to stop and we need to focus on the collaboration aspect and teams more. But just tell me a little bit about that because that's an interesting part of the journey in terms of figuring out who your ICP is. Because even if you had an idea of who that person was, you're getting other people coming and they're paying you money. It's good money, Right? So it's like, what happened? What sort of problems did you start to see that had you rethinking that? Yes.

[Philippe Lehoux]

So first, the first. For the first few years, I'd say for me personally, it was important to listen to those solo users, right? And the reason is we're building an email client, right? So to me, there was two pipeline in the roadmap, collaborative innovation and then just nailing the email client aspect of the product, right? And this silo here was the artist, right? Anything people like, it's crazy. It can be the shortcuts, it can be like how the quote is rendered, how there's a lot of. There's thousands and thousands of small details. And nailing those was possible because we, what we had excited early customers. And most of the time, those were early tech adopters with no team. They just liked missive and they just wanted to use it for their email because they find like all the other solution was like either old or not good enough to them. Right? That was the first few years, but then we just like crunched the number and the churn rate for organization, admissive we call them, with more than three people was like 1.6%. And then churn for solo user was like 16%. Right? So it's like, okay, okay, so solo user, I mean, obviously they can use free email client, right? So our competitors are pretty much like, it's like the competition is free, so it's hard to compete, right. Eventually you can't just compete on aesthetic or quality of the product. At some point, the product doesn't offer much more value for a solo user. So Just manually. At one point we said, okay, well I think now that we have many customers, especially a lot of teams, we should probably price the product for them. And that was increasing a bit the price. So it became out of reach for most solo users. And it might sound counterintuitive, but for a small team like us, we cannot have too many people in the pipeline, incoming new customer, if they churn. Because it's like supporting those enthusiastic users take a lot of time because they send you emails like, hey, you should improve that. You should. And Right. And at some point it was like, okay, let's change the pricing. So it's still, because it offer a lot of value for the team, it's still affordable and it still makes sense for the teams. But for solo users, it's not going to even be part of their. They're thinking when they start thinking about using an email client, right? Yeah. So pretty much slow discovery of that. But initially because we didn't have any marketing or any ability to define who our target customer was, we were pretty much happy with all the customers and all feedback was welcome. And then eventually that changed.

[Omar Khan]

Like I said, let's talk about affiliates. So that was the next thing that helped you grow. And it makes a lot of sense given what we talked about. This horizontal market and trying to reach customers directly across the board is a huge, huge undertaking. Right. So being able to use like intermediaries, like affiliates makes a ton of sense. But a lot of startups will put, you know, launch affiliate programs and not necessarily see a huge amount of traction through that. So how well did it work for you? And then just kind of walk us through like what you did because there was a few things that you did, which again was a bit counterintuitive to what most startups would do.

[Philippe Lehoux]

Well, first let's start with the counterintuitive things. Like we did not use affiliate service or app. Right. We built it from scratch because the reasoning was people love missive. They're our best ambassador. Let's give them like, they like to talk about it just for the sake of like being happy talking about like an interesting tool you're using. Right? But let's give them value in doing so. Like let on top of it bring value, like monetary value. So the idea was like, let's like have an affiliate program where we can either like all the, like, let's say I use missive and I stop talking about it and then someone, somebody use it. Like I can either get three months like, or I could if I'm an extremely good athlete. I just have get a payment. But the core idea was that plus because we're an email client we're not comfortable adding third party script or tracking things in our all you know, pipeline whether it's a public website to the app itself. So we had to own that part as well. Not to add those in our like let's say GDPR or any other terms of page where you, you know, you don't want to list those marketing ish product that and have to say that they have access to data when they don't really have access. So counterintuitive thing. We built it from scratch and I think it's a reason, I think why it worked because now it's ingrained in the product for customer when they start using it like the dashboard is in the product. It's not something on top of it. And I would say half of our affiliates right now are customers now they the other half is professional marketers just like either doing ads with it or using other strategies. Sometimes I have no idea what they do with it but we try to monitor things. So it's like they're doing like things that are okay. But I would say half and half nowadays like half professional marketers, half customers.

[Omar Khan]

Cool. So that was the other counterintuitive thing that I think most startups would probably say. You can, you can be an affiliate but you can't run ad campaigns and you know, or you can't target certain keywords like our branding, you know, whatever. Did you do that or did you just give them free rein?

[Philippe Lehoux]

Initially it was like you could do anything. Well except illegal stuff, right? Obviously right. So like for a long time and that guy's a customer of missive but he's just on the marketing firm. But that for a long time if you type missive in Google, the first was a link that you use this asset link it was paying eventually once we got our trademark. So we could enforce not using missive in any ads first because it would make less sense for them because the price of the clicks would go up a lot and also because eventually they were making a lot of money and it was like okay, I think like we should stop this and that would change the policy. You cannot advertise on missive like and you cannot use the term missive and advertise against it whether it's on Google or YouTube or whatnot. But that affiliate actually submitted a list of keywords that we approve we could not use like missive pricing and whatnot. A lot of those and then we say, okay, it's okay. If you want to use missive some of the times on longer queries, that's fine, no problem. We have our conversation with him because it's good. But in a way, it's kind of a way to not have to deal with paid ads. Right. It's like you let your affidavits deal with that stuff and we can still be a small team and not having dedicated resource in the company doing it. Of course we're probably leaving money on the table, but like I said at the beginning, keep things simple.

[Omar Khan]

Okay. So I want to just kind of be clear about the timeline. So you. I think the first paid customer was kind of like end of 2016, it took about 2 years to get to 10k in MRR. And then what? It was another 2 years to get to the first million in ARR.

[Philippe Lehoux]

Yeah, to a year and a half.

[Omar Khan]

And if I had to describe it, it's like I kind of see like this big circle where 90% of this is all about building a great product, doing some plg. And then outside of that, there are these efforts around. Okay, we did some cold outreach in communities or on social these versus pages and then starting to introduce an affiliate program. But outside of those three things, was there anything else that was significant driver to get to that first million?

[Philippe Lehoux]

No. It's a good summary. I wrote a blog post called 10 Years of Lazy Marketing. In the sense that I think there's 28 bullet points in it in 10 years. That's not a lot of things. And I really like try to really remember everything that I did. I look at my Twitter feed, so I scroll to see like whatever I did that I post right to the years and I ended up with 28 bullet points in nine years. Not much, but yeah, product led being in a space email client where people are willing to experiment and try them. It's easy. Like you download, you try it, you like it, you start using it. Maybe you're a solo user, you start talking about it to your friend that own businesses and whatnot.

[Omar Khan]

So what I thought was interesting was that the business today is 480k, nearly 500,000 in MRR. And nine months ago, in December, the team size was still three people.

[Philippe Lehoux]

Yeah.

[Omar Khan]

How did you manage to go that far that long with just the three of you?

[Philippe Lehoux]

I don't. I think it goes back to keeping things simple. Right. Never spending time on imaginary problems or creating fake work. There's a lot of fake work in businesses and a lot of fake work in startups, I believe. Right? One reason I was like, people ask me like because like venture firm or people were interested in missive like always kind of what's that thing? Right? And sometimes I had conversation and so people were like, hey, you talk to those guys? Would you be interested to get investment? I was like, honestly, I have no clue what I would do with that much money. I would have had to invent things. Let's try those 10 initiatives that I absolutely no clue if they're going to work or not and just create work around them. For us it was always to do just the bare minimum and the bare minimal minimum was often just replying to our customer email as best as we could, fixing their problems, getting into call with them to understand their issues, their pains and then iterating and improving the product. And of course you need time to do that, you need a runaway. And in our case, like I said, we had that run away from conference badge and in a way I sold conference badge. When we did, we stop missive was bringing enough revenue so we didn't need that runaway anymore. So to me was more annoying to have that small business running in the side. Right. I preferred selling. It wasn't a huge price, it was a fair price but I preferred to stop adding it because it was a distraction. But for a long time it was just an enabler. That's why we could invest so much time into all of this. And so, you know, I think Paul Graham said that like, like you, you want to be cockroach. Like we were like the absolutely best cockroach. I was always like, there's nothing that can kill us, right? Like, let's just like keep doing those small things daily. And then that thing, those things compound. I think right now we're at a moment where probably in a year or in two years, like the company will look a lot different because I think we, I feel it's a new seasons and the takofunders our personal situation, the attraction of missive. I feel that we're at a place where we are going to change the ingredients and now we're cooking. But for a long time that was it. Keep things simple.

[Omar Khan]

I love that you were telling me that you felt like you had underinvested in marketing and now you're changing that and building a team around you. And I asked you like, hey, do you think your revenue would be significantly greater if you had done that earlier? And you were like, yeah, of course, absolutely right. And then I thought about it and maybe it's just Like I'm getting older and like a bit more philosophical and stuff, right. But it was like, hold on a minute, you're running a business that's profitable or at least you had and you know another business along as well to put you in a place where collectively it was, it was profitable. So you don't have that pressure. It's growing. You're working on something that you really enjoy, all three of you. It's something that you know, even as you said, if, even if we weren't doing this or selling this, we'd still use this product ourselves. And it's like then I was like, well, what's the rush, right? It's like you're in a great position. That's what everybody wants to be able to work on. Something that you enjoy is fulfilling. You don't have to worry about money. So who cares whether it's 6 million or 60 million, right? I mean if you had investors, obviously they care. And now you guys are sort of like into a point where you've been forced to really bring on that team because you've realized it's just too much for just the three of you to do. But just tell us about that. So the team is now what, like 12 people? Yeah.

[Philippe Lehoux]

So first we mostly onboard developers because dealing with emails just an infinite long term tell of issues, exceptions that you need to dealt with and then not only do we have emails, but we support many APIs and channels and API and channels always evolve, there's always issues and whatnot. So at some point it's just like not possible for just the three of us to cover all this. So we onboarded developers. I also onboarded like I think another counterintuitive things we did like my like the first IRA was like a operation person. I knew we had no time to onboard people successfully. We were just too many things to do that were core to running the business. Like the three of us. Like whether it's support or it was an infinite flow of things to do. And I knew from past failures that if we wanted to onboard people successfully, we had to have the trustable people person that could help with that. And so I hired Jenny at Operation and then that helps a lot. She came from a place where she was in bigger teams. I mean keep in mind we were in three for many years. So we were kind of didn't know how to actually manage a team. Right. So she helped with that and then that could help us scale the team. So I hired someone at support customer experience so I could detach Myself from support from webinars think more long term. And then it's been a year now that we've hired people and we just starting to feel like things to accelerate again. Like the first few months was just like okay, stop and go, stop and go teaching. It was a lot of teaching. Document documentation and then telling what's the culture telling how because we never had to explain ourself. It was just the three of us. We were all synced. Funny thing, my wife is always oh, how's it day? How's Raf? Like my cdo? I have no clue. I haven't talked to him. Like what? Like how. When was your last meeting? I don't know, like two weeks ago. Like it was just like we were all in sync. Right. And so you have to unlearn some habit you've developed in that way of working. And now that first year with a bigger team was like to learn and to improve around that. And yeah, so now probably our long term goal is to not be more than 20. So it's still important for us to be a small team. So I think we're probably going to take a year to reach that 20 person size of the team and then I want art stuff at 20. I want us to be able to do a lot with just 20 people and knowing that in advance and telling people, I think help us like, like build systems and whatnot to, to, to make it work. But that's the long term goal to be really. Yeah. It was impressive to just be three. I, I, I still want the size to be impressive. In, in 2, 3, 4.

[Omar Khan]

All right, we should wrap up. Let's get onto the Lightning round. I've got seven quick fire questions for you. What's one of the best pieces of business advice you've received?

[Philippe Lehoux]

Well, I just love all Basecamp books so I mean that's probably something you hear a lot here. But yeah, pretty much all of their.

[Omar Khan]

Books are teaching and anything that Jason and DHS says right.

[Philippe Lehoux]

It's like, yeah, I mean I was at the Railsworld last week in Toronto and that was the first keynote with dhh and that guy is just like, is a giant. I mean, you know, sometimes I'm, I'm, I'm a bit annoyed by it. But every time, like I think in First Principle, I'm like, well, I pretty much agree with everything you just said. Right. So yeah.

[Omar Khan]

What book would you recommend to our audience and why?

[Philippe Lehoux]

I love Biography because I love, I pretty much just read Biography. No business book. Well, except Basecamp, but those I read them years ago. Now one that I read recently was called Black Spartacus and it's the story of the black general who liberated Haiti or Saint Domingue in those times from the reason that one is interesting, but I pretty much love them all. I love to see the struggle of people that had an impact in their time or in their culture. And it really helped relativize your own struggles or your own problems because, I mean, all their lives were shit shows usually. And reading about them, like, usually like comfort myself and how I do things.

[Omar Khan]

And what's one attribute or characteristic in your mind of a successful founder?

[Philippe Lehoux]

I mean, it's a cliche now last few weeks, but they talked about founder mode and it's probably for bigger startup and business, which miss. It is not. But caring about the details, right. To me is really important. And I think the three of us, we really care about all the small details and. Yeah. So not being managers, but being people that cares about small details, I think that's one reason where we're successful.

[Omar Khan]

What's your favorite personal productivity tool or habit?

[Philippe Lehoux]

Me personally, I have the last two years, I have a three session with a trainer, a gym trainer, and that changed my life.

[Omar Khan]

Yeah. Cool. What's a new or crazy business idea you'd love to pursue if you had the time?

[Philippe Lehoux]

I want to start incinery. Oh, that was my kids.

[Omar Khan]

The kids are here. We knew. We knew we were kind of hitting that time. So. It's all good. It's all good.

[Philippe Lehoux]

Also. Yeah. Citri, I want to have a scenery at some point. I don't digest beer, but I love to drink with friends. I drink cider. So eventually I'd love to have a cider fan farm. And yeah, they're always a dream.

[Omar Khan]

The kids have got a perfect timing because the next question is like, what's an interesting or fun fact about you that most people don't know? And I know the answer.

[Philippe Lehoux]

Yeah. I have four kids. I have four kids. Yeah. So.

[Omar Khan]

And they've just come home from school or they're starting to come home.

[Philippe Lehoux]

It's just there.

[Omar Khan]

And finally, what's one of your most important passions outside of your work?

[Philippe Lehoux]

That one's hard because I work a lot and so I would say my passion is still like my work, which I don't know if it's. It's okay to say, but yeah, work is my passion.

[Omar Khan]

Cool. Philip, thank you so much for joining me. It's been the thing I love the most about this conversation is about, you know, this constant theme of keeping things simple, focusing on the core stuff, not getting distracted by shiny objects and unnecessary stuff. And just a lot of, like, counterintuitive stuff that you've done and that you've made work. Which hopefully other people thinking who might be hitting their heads against the wall today might just get a bit of inspiration from that and say, well, maybe I need to try something different instead of what everybody else is doing.

[Philippe Lehoux]

Right. Usually being different is good. Yeah.

[Omar Khan]

Yeah. Awesome. So if people want to check out missive, they can go to missiveapp.com and if folks want to get in touch with you, what's the best way for them to do that?

[Philippe Lehoux]

X.com Twitter like P. Lou Elu or on LinkedIn. If you search my name or missive.

[Omar Khan]

We'Ll include links to both in the show notes. Great. Thank you, my friend. It's been awesome. I appreciate you making the time and we almost made it before the kids came back.

[Philippe Lehoux]

He's just there. You really want to get in? You want to come now? Yeah. All right. Cheers.

[Omar Khan]

Take care. All the best. Bye. Remember those development headaches we talked about? Look, building software shouldn't be a worrisome experience. Innovation should be fun. That's where Axle Hub comes in. They've been building software for 10 years, but here's what makes them different. You work directly with Phil, their CEO and technical leader. No middlemen, no managing multiple developers. Phil guides the entire process and personally oversees your product. Think of him as your technical co founder minus the equity stake. He brings his expert team to build everything right from day one. Want to focus on your business instead of managing developers? Visit axlehub.com that's a X E L H U B Com all right, this episode was brought to you by Attio. The next generation of CRM. ATIO is powerful, easily configured and deeply intuitive. You can set it up in less than a minute and in seconds of syncing your email and calendar, you'll see all your relationships in one place, all enriched with valuable data. What's more, you can also build zapier style automations, get powerful reports and seamlessly handle any go to market motion. From PLG to sales led, Attio is designed for the next era of companies like yours. So it's time to say goodbye to inflexible one size fits all CRMs and join industry leaders like 11 Labs, replicate modal and more. To scale your startup to the next level, you can try Attio for [e-mail] that's attio.com.