SaaS Interviews with CEOs, Startups, Founders
1151 Weebly CEO: 50m Users, North of .5% Conversion to $8/mo
18 Sep 2018
Chapter 1: What inspired David Rusenko to start Weebly?
When he's not getting his butt kicked by his mother-in-law at Bridge, he's building Weebly Lunch back in 2006. Made the trek across the country to get into YC, where he raised his first capital. They've now raised over $35 million. Last raise really was back in 2014.
He's managed now to keep the company profitable with more cash in the bank today than all the money they've raised, so more than $35 million in the bank.
Chapter 2: How did Weebly secure its initial funding from Y Combinator?
When they first launched the pro account, they were converting just 0.5% of those users. Don't expect to do more than that. That's a good lesson for everybody. Generally gotten better than that today, over $50 million. paid accounts. If you assume some of the numbers he gave us, you can maybe back into a minimum of about 24 million bucks in ARR growing fast and profitably in the Valley.
It's rare. This is the top entrepreneurs podcast where founders share how they started their companies and got filthy rich or crash and burn. Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines.
Chapter 3: What are the main revenue models used by Weebly?
We went from a couple hundred thousand dollars to 2.7 million.
I had no money when I started the company. It was $160 million, which is the size of many IPOs.
Chapter 4: How has Weebly's conversion rate evolved over time?
We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is David Rusenko. He's the CEO and co-founder of Weebly.
He created the company in his Penn State dorm room back in 2006, and Weebly now hosts over 50 million entrepreneurs in 225 countries all around the world. He's helped scale the company to 300 plus employees in five different global offices. He's dad to a 1.5 year old, and his hobbies range from the stunt car driving to roaring to a roaring game of bridge with his mother-in-law.
David, are you ready to take us to the top? Yeah, let's do it. All right, so here's the big question. On an average night, who wins Bridgemore, your mother or you?
Uh, you know, like bridge is a tough game and I've only been playing for a few years now. So, uh, so I got to give it to my mother-in-law. She'll win every time.
And what are the stakes? Does she get a percentage of the company every time you lose? What's on the table here?
That would not be a great bet. Uh, you know, you, you, usually it's bet over a bottle of wine.
That's good. All right. Let's jump into Weebly here. So I think most people obviously are familiar with the space, but for the rare person who's not quickly tell us what Weebly does and what's your revenue model. How do you make money? Sure.
So Weebly is the easiest way. If you're starting a business and you're trying to get online and get found, Weebly is the easiest way to do that. If you're trying to sell online and start an online store or even just get something as basic as a website up to get started, you can sign up on Weebly.com. Within 10 minutes, you can have something online.
Within a couple hours, you can be completely finished and be ready to go.
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Chapter 5: What strategies does Weebly use to drive customer growth?
So are you using a more basic, um, uh, website that's just kind of telling your story? That's probably in the four to $8 a month range. Are you starting to do some e-commerce and starting to sell online? Um, that's in sort of that 16 to $25 price point. Um, are you really getting advanced with the e-commerce? You want to include our email marketing products, um,
our Facebook advertising products and really start to grow your business and get found, that's where you're getting some of those slightly higher price points.
And why have you chosen to take the war to two separate spaces? And what I mean by that is on your website, there's a clear delineation right when you start.
Chapter 6: How does Weebly handle competition in the website building space?
Are you building a website or an e-commerce platform? And on both of those sectors, you have massive competitors, be it Shopify on e-commerce or Squarespace, Wix, and the other guys on the website side. Why fight two wars at once?
Sure. I mean, the space is huge. You know, a lot of entrepreneurs like to pride themselves on saying we have no competition. If you have no competition, that's a bad sign. You know, that usually means you're in a small market. So the market's absolutely massive. I think, you know, we go where our customers are. And what our customers have told us more and selling online.
I think maybe 10 years ago, it was really about, you know, expectations were just a little simpler. It's like, hey, I just want to get found. I want to get that website online. That's kind of our bread and butter. That's where we started. And there's a whole host of people just looking to do that. We're finding increasingly that our customers are
Trying to actually say, look, getting found is great, but I need to start transacting online. And that's where the magic starts to happen. That's where you go on vacation. Your business is running itself, right? That's where you're making money while you sleep. And so increasingly, that's what our customers are looking to do.
Chapter 7: What metrics does Weebly use to measure success?
And we listen to our customers and we offer what they're looking for.
Why not then go all in on e-commerce and ignore the regular hosting? E-commerce is nice, too, because you have a direct attribution model. They can see a return.
Yeah. I mean, look, you know, we're continuing to push, like I said, exactly where our customers are looking for value. I think it's, you know, we've delineated website and e-commerce sort of on our homepage. It's not quite so black and white a delineation. I mean, you might, you know, even if you're going to sell a physical product, you might get started by setting up a website.
You know, even e-commerce functionality is on a website, right? So it's not quite so black and white. I think for a lot of our customers, you know, it makes sense as they're getting started to understand, are you selling today or are you going to sell later? That's kind of really the delineation. And, you know, I think over time, a lot of people are going to be upgrading to transacting online.
It's just sort of the logical next step.
Yep. So you launched back in 2006 in your dorm room. You've scaled to today. I know you've raised capital. Give us a quick update there. How much have you raised total?
Yeah, so we started ā I wrote the first line of code in February 2006. It was part of a class project at Penn State. Continued working on it throughout that class and that summer. We were interning in New York City, applied for it, got accepted to Y Comner that fall, moved out ā skipped out, I should say, from our last semester of school because we all ā
Sorry, I want to cut you off there real quick. When you were doing this and you applied to Y Combinator, what got you in? Were you post-revenue at that point? The revenue numbers impressed them? Or your user base...
No, this was 2017 for simpler times, if you will. Y Combinator had just gotten started. Most companies that were applying for Y Combinator at that point in time were just idea stage. That's obviously very different today. At the time, I think we were one of, if not the furthest along company that had ever applied to and gotten into Y Combinator. In terms of what though?
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Chapter 8: What lessons has David learned from his entrepreneurial journey?
Exactly. That's funny. Costco right there. Yeah. So 2006, you get into YC, um, to keep the story going from there.
Yeah, so we skipped out of school. I say we skipped out of school because we all ended up graduating after the fact, but we had a semester left, and I drove out from Penn State to San Francisco. This was early January. I drove 80. It turns out I would not recommend driving 80 in January.
I got stuck in Wyoming for about three days, but made it through with all the servers intact in my car, made it out here to San Francisco, participated in the Y Combinator program, Um, that April, uh, kind of a, kind of a fun, I suppose, if you want to call it that milestone, we, we, at one point we're left with less than a hundred dollars in our bank account. We just paid rent. We just done.
How many, how many, how many people were on your team at that point? Uh, just the three pounders. Okay. Um, and so, um, but, but so we had food for a couple of weeks and we had rent due like in another two to three weeks. So we basically only had a couple of weeks left and
And we weren't really sure how we were going to make it through, but demo day was coming up and we were sort of cautiously optimistic. We ended up, so it was 20K from Y Combinator in January. We made that stretch about four months. That was your first round, essentially, 20K. Effectively, that was the first round. And what have you raised today?
Today, we've raised just a little over $35 million in primary capital.
Okay. And when you say primary, why do you make that delineation? Have you done secondary stuff or venture debt or what?
Yeah, we've done a little bit. And I think primary capital is the best way to look at the business, basically, is like how much it actually taken in. And we actually so not to kind of just to skip through the story really quickly. I'm a six hundred fifty six hundred and fifty K was in April of 2007. You know, kind of just continued scaling the business from there.
In 2014, we raised thirty five million from Sequoia and Tencent. And today we actually have more cash in the bank than we've raised.
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