The Twenty Minute VC (20VC) Episode Summary: Scaling Monday.com with Eran Zinman
Podcast Information:
- Title: The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
- Host: Harry Stebbings
- Guest: Aaron Zinman, Co-Founder and Co-CEO of Monday.com
- Episode Title: Scaling from $6M to $120M in ARR in 3 Years | How Monday.com Built the Best Performance Marketing Engine in SaaS | Going Upmarket, International, and Multi-Product; The Biggest Lessons and Mistakes
- Release Date: January 17, 2025
1. Introduction to Aaron Zinman and Monday.com
Harry Stebbings welcomes Aaron Zinman, the Co-Founder and Co-CEO of Monday.com, to discuss the company's remarkable growth journey. Aaron shares insights into how Monday.com scaled its Annual Recurring Revenue (ARR) from $6 million to $120 million in just three years, despite initial challenges in fundraising.
Notable Quote:
Harry Stebbings [00:23]: "The story of Monday.com is insane. Turned down by 99% of VCs, the company then scaled from $6 million ARR to $120 million in just three years."
2. Early Challenges and Scaling
Aaron and Roy Mann, the other Co-CEO, recount the early days of Monday.com. Initially branded as Da Pulse, the founders struggled to raise funds as investors didn't fully grasp their vision. Despite this, they managed to grow the company's ARR significantly within three years.
Notable Quote:
Roy Mann [00:09]: "From $6 million to $18 the year after and then from $18 to $50 and $50 to $120 in three years."
3. Embracing Failure as a Path to Success
Aaron emphasizes the importance of confronting difficult aspects of the business rather than avoiding them. Reflecting on his first startup failure, he explains how embracing failure became a core part of Monday.com's DNA.
Notable Quote:
Aaron Zinman [04:28]: "I try to avoid the hardest things in your business. If something is very painful, that's the right time to get into it and fix it."
4. Building Monday.com: Origin and Strategic Pivot
The conversation delves into the inception of Monday.com. Both founders had prior startups and identified a gap in the work management and project management market. Initially focusing on communication tools, they pivoted to a more flexible work management platform after realizing that existing solutions were perceived as "nice-to-have" rather than essential.
Notable Quote:
Aaron Zinman [07:01]: "The work management, project management industry was always packed with a lot of tools, but we had a different view about the market. We said, look, there's such a huge vacuum today in the market."
5. Developing the "Big Brain" Performance Marketing Engine
A pivotal moment for Monday.com was the creation of an internal tool named "Big Brain." This performance marketing engine meticulously tracked every campaign, user interaction, and conversion, enabling the company to optimize marketing spend and scale efficiently.
Notable Quote:
Aaron Zinman [17:05]: "We built this tool to track every campaign... to make the business very efficient."
6. Multi-Product Strategy and Going Upmarket
Monday.com's flexibility allowed customers to build various solutions like CRMs on their platform. Recognizing this demand, the company introduced dedicated products such as CRM, Dev, and Service, each managed by specialized teams. This multi-product approach not only diversified revenue streams but also positioned Monday.com as a comprehensive platform for businesses of all sizes.
Notable Quote:
Roy Mann [32:07]: "Every product is in a different phase... dedicated salespeople and we scale them. It's like small startups within the company."
7. Board Management and Company Culture
Aaron shares his philosophy on board management, emphasizing transparency and regular communication. By sending daily performance metrics to board members through "Big Brain," the company ensured that the board was always informed, fostering a culture of trust and accountability.
Notable Quote:
Aaron Zinman [43:59]: "Never surprise the board. We sent daily performance metrics so they knew everything better than I did."
8. The IPO Decision and Its Impact
Discussing the company's decision to go public, Aaron explains how reaching a $1 billion ARR milestone underscored their readiness for an IPO. The transition to a public company brought a new level of maturity and introduced sophisticated public market investors, enhancing Monday.com's market presence.
Notable Quote:
Aaron Zinman [39:45]: "We felt that, you know, eventually we want to build a huge company. When we look at the most inspiring SaaS companies today, they were all public."
9. Co-CEO Structure: A Path to Synergy
Aaron and Roy discuss their unique co-CEO arrangement, highlighting how their complementary skills and mutual respect have been pivotal to the company's success. This structure allows them to efficiently divide responsibilities and maintain a harmonious leadership dynamic.
Notable Quote:
Roy Mann [42:54]: "He's one of those people that has no ego. You want to do what's best for the company."
10. Personal Insights and Lessons Learned
Aaron delves into personal development, sharing how therapy helped him balance work and family life. He underscores the importance of self-care in maintaining leadership effectiveness and preventing burnout.
Notable Quote:
Aaron Zinman [47:26]: "Finding the right balance... I went to therapy to make a change. Today I'm more efficient."
11. Rapid Growth and Future Plans
From an ARR of $6 million, Monday.com achieved $120 million within three years, underscoring their effective scaling strategies. Looking ahead, the founders aim to reach a $1 billion ARR, driven by their robust performance marketing and expanding product line.
Notable Quote:
Roy Mann [25:07]: "We grew from $6 million of ARR to $120 in three years. It was super rapid growth."
12. Navigating AI's Impact on SaaS
Aaron expresses optimism about integrating AI into Monday.com's platform. By allowing customers to incorporate AI into their workflows, the company remains adaptable and continues to enhance user efficiency without compromising on data transparency and control.
Notable Quote:
Aaron Zinman [37:45]: "We took the same principles of easy user experience and customizability and instead of building a dedicated AI product, we just allowed our own customers to integrate AI into their own workflows."
Conclusion
This episode of The Twenty Minute VC offers a comprehensive look into Monday.com's strategic growth, emphasizing the importance of flexibility, performance marketing, and a strong company culture. Aaron Zinman's insights into embracing failure, prioritizing transparency, and balancing personal well-being provide valuable lessons for entrepreneurs aiming to scale their startups effectively.
For more information, visit www.20vc.com.