1757 How Wistia Hit $18m Revenues, Used $17m Debt from ACCEL KKR To Buy Out $1.4m Seed Investors With Tender Offer
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What is the main topic discussed in this episode?
All right, guys, what's up? Nathan Lackey here. Today, our guest is Chris Savage. He's the co-founder and CEO of Wistia, a web-based software solution that helps marketers turn viewers into brand advocates to grow their businesses.
What is Wistia and how did it start?
Now, more than 500,000 businesses across 50 countries depend on Wistia's products to build their brands like HubSpot, MailChimp, Sephora, Starbucks, and Tiffany & Co. Chris, you ready to take us to the top?
Let's do it.
All right, man, I already told you I'm envious of your video setup here. You're totally putting me to shame.
I'm just at my desk, man.
This is how it looks. Just another day in the office. All right. So we just hit on the bio, but anything you want to add in terms of Wistia for folks that, you know, if they haven't heard of you guys, what you guys do?
Yeah. I mean, I would just say, um, we've been around for a long time. We're a classic overnight success, you know, field of security for many, many years. Um, and then figured out like how to build a freemium business. Um, and we just help small medium sized businesses use video better. And that means, um, analytics, see how your videos are performing, hosting, sharing tools, marketing tools, the ability to build channels. Like we have a ton of stuff to help people do that.
Yeah. Now the context of this, what I want to talk about is something very unique to what you've done, which is an acquisition offer you got recently and decided to do something totally off the rails, which was instead of taking the acquisition offer, raise debt and buy the folks out. So we'll get to that in about two or three minutes, but first give us context in terms of where you're playing. So would you categorize yourself as kind of SMB mid-market enterprise? What's the average customer looking like?
Yeah, we're in the SMB space. That's where we've set our target. I think any business that's freemium, you end up with customers across the spectrum. We're mostly SMB. There's some mid-market. There's a little bit of enterprise in there. But what it means for how we've built a business is that we have to be really efficient in how we get customers. We have to make a product experience that's incredibly easy, incredibly simple. Um, and I think also the other thing about the SMB space, as you know, is just, it takes time, right? Like it's hard to find all those folks. So it's hard to build that brand equity. Um, and so, but that's the path we've chosen and it's, it's been good for us.
So, I mean, fair to say sweet spot for you guys is your, your $99 a month kind of pro plan. It was that accurate or no? Yeah, that's accurate. Okay. All right. So give us some, let's put this on a timeline and then we'll get to the recent event. So when'd you launch the company? What year?
Launched in 2006.
Okay, 2006. So how much had you raised? Well, first off, when did you get the acquisition offer? What year? And how much had you raised prior?
We got the acquisition offer in 2017. And we only ever raised two angel rounds. So for a total of 1.4 million, we raised 650,000 in 2008. And another about 800,000, a little less than that in 2010. Okay.
Dude, I did not know it was that little. I thought you had raised like five, six million.
No, no. It was a very small amount. I mean, especially in today when we see how much people raise for a seed round. Yeah. Yeah, we raise very little. We're incredibly capital efficient. And that was from the beginning. Like when we started the business, my co-founder and I were both very fortunate in that we graduated college without debt.
What unique acquisition offer did Wistia receive?
My dad was a professor and had a good deal. And so we saved the meager amount we earned the first year of school. And that is what we use to fund ourselves the first two years.
Yeah. Now, 2017, obviously, was about two years ago. Give us it before we talk about kind of logistics here. Give us a sense of size of company at that point. How many customers were you serving? And if you can kind of revenue range?
Yeah, I think the revenue range was around like. About, like, right at the time of the offer, I think we were about, like, an $18 million run rate or so.
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Chapters
6 chapters
1
What is the main topic discussed in this episode?
0:00–0:11
2
What is Wistia and how did it start?
0:11–3:12
3
What unique acquisition offer did Wistia receive?
3:12–3:53
4
How does Wistia define its target market?
3:53–5:10
5
What challenges did Wistia face in customer acquisition?
5:10–13:15
6
What decision did Wistia make regarding investor buyouts?
13:15–31:30
Speakers
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