SaaS Interviews with CEOs, Startups, Founders
Yac Is Audio Slack, Hits 10k Weekly Users, Raising $8m on $30m
11 Feb 2021
Chapter 1: What is the main topic discussed in this episode?
It's really the goal for this year is to hit a million AR. That's what we're aiming for this first two quarters is to start working towards that goal. Growth is the North Star right now. It's how many users can we get on this platform.
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Hello everyone, my guest today is Justin Mitchell. He's the founder and CEO at Yak. He also builds products at SoFriendly.com and runs Newton Mail now. Justin, you ready to take us to the top? Yeah, absolutely. So I'm a Yak Power user. For people that have not used it before, describe how it works.
Yeah. So Yak is asynchronous meetings. So the goal with Yak is to have such rich communication throughout the day that you just don't have to have those long, hour-long Zoom meetings throughout the day back to back. You're just communicating over voice through asynchronous voice messages. You can attach your screen, you can do a video, maybe even a selfie vid with your webcam.
You're sending that off to your team. The biggest differentiator here is the social graph side of it. So instead of this being content that you're creating and you're putting on a help site somewhere, or you're sending in an email, you're dumping into your Slack, all the actual communication happens inside of Yak. So it's back and forth. It's conversational. This isn't for creators and viewers.
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Chapter 2: What is Yac and how does it function?
That was kind of the idea. So yeah, we really just kind of leveraged their audience They put us in their newsletter. They put us on their Medium blog. They tweeted about us. They put us on their Facebook. And then we won the hackathons. We were on the homepage of their website. And all of that resulted in thousands of people coming into the funnel for free. We didn't have to pay for any of that.
I don't know, I guess contractors and a couple of developers on our own team for like four days of work to actually build the product out. But we didn't have to pay for any of this newsletter sponsorship. We were just featured for free because we did a good job. And by doing a good job in their hackathon, we were obviously promoting their brand.
Justin, when did you post this on Product Hunt for the first time, Yak?
Yeah, so the Makers Festival was Thanksgiving 2018, so it was like November 28th.
Why can't I find it? When I go to your profile and I look at what you've made, there's nothing listed. Was it a different name?
No, so the original one was going all the way down. You might find yelling across cubicles, which was what YAK actually stands for.
Oh, interesting. Okay, I can't, oh, yelling across cubicle. Oh, that's hysterical. I didn't know that. Okay, so you posted this back in December of 2018. You got 429 upvotes. How many, how much, do you remember how much like website traffic, how many signups this drove?
Yeah, so I mean, that resulted in probably a thousand signups, downloads, really, you know, let's translate it into downloads. You know, I think we probably had at peak, maybe like 500 people using the app on kind of a weekly basis. I mean, admittedly, this part, It was not that great, right? It was definitely a hackathon project.
So I was surprised that many people actually got it up and running. And a lot of them were in like weird industries. We didn't expect either like Roche Healthcare, like kind of an enterprise healthcare company, not a fun, you know, remote first startup. So yeah, they just found out about it through Product Hunt, downloaded the app, and started using it in their team.
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Chapter 3: What is the business model of Yac and how do they generate revenue?
Oh, we didn't even know that group messaging existed. Oh, we didn't even know a Slack bot was an option. And so now that we have these features, we're going to go back out to them and say, great, so upgrade to the Teams plan will activate that Slack integration for you.
So how many active teams do you have today and how do you define active?
Yeah, so active we define as basically an every other day usage because it's a meeting tool, right? And so we don't necessarily always see daily usage out of each team, especially dipping around like weekends, right? So we're typically looking at weekly active users. So you're looking at about 10,000 people that are on the platform. You're looking at probably 300 teams. Yep.
Yep. That's great. So 300 teams where at least one person on their team uses it every other day. Right. Got it. And there are 10,000 people across the center teams that do use it every other day. Right.
So we're looking at registrations every day. We're in... precincting on a regular basis, but we have hundreds of people that are registering on a day-to-day basis.
Now, of those 300 teams that you define as active, how successful have you been at converting them to paid, making them hit those limits and actually pull out the credit card?
Absolutely awful. But it's also not a priority for us right now. What's awful? Why do you say awful? We don't actually enforce a paywall. So we say we have a paywall, but we don't actually enforce any of it. So it'll say like, upgrade to get the desktop app. But you can technically still download the desktop app without upgrading. It says upgrade to get group messaging.
You can just create groups. We don't actually block any of that functionality. A big part of our story has always been really, really tight iteration cycles with our users. Hey, what do you like? What do you not like? How did this make you feel? How did it not make you feel? And so a lot of the pricing is there just so we can get gut reactions.
did someone upgrade immediately when they saw it or did they upgrade later? And then ask them like, hey, so why did you upgrade? And a lot of times it'll be, oh, I upgraded for the Slack integration. And that way we know, okay, that's a mainstay. That's going to stay on the pricing page because that was a reason someone upgraded.
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Chapter 4: How did Yac acquire its first users?
About a year ago.
I mean, we haven't even hit a year, right? So March 2019... Or March 2020... Hi, bad. March 2020 is when we actually launched this available to everybody. It was early access before that. So they weren't even able to, you know, get in without like an invite code. So March 2020, we were actually going to do this at South by Southwest, but then COVID hit and we had to do everything digitally.
Yeah. Okay, great. So 250 to 1000 today. That's great growth. You're doing a lot of this stuff digitally. Churn is obviously critical. You can measure churn from a revenue churn perspective, but also just an act, you know, you used to have X amount active. Do they stay active? So how are you measuring churn right now? And what is it?
Yeah. So churn is improving all the time, but probably very awful for us. And we don't measure it on revenue right now. It's definitely on usage.
So how do you measure it? What is it on usage basis?
Yeah. So we're seeing it based off of active users on a daily basis. We definitely have a cliff. If you start sending group messages, you never churn. If you're a group messenger, for some reason, that's a huge sticking point and you just start to stay with the product. If you've never sent like a group message, we definitely see you churn early.
So a lot of what we're doing right now is kind of like optimizing in funnel stuff as soon as you get in, like introducing them into the concept of group messaging. Here's a channel. Here's how you create one. Here's how you invite more people. And there's so much that we need to do to improve on that. Like I said, it's a weird concept. It's a different way of working.
So if you don't introduce these concepts early on, we see people turn really fast. And so what we're working on is that first impression. How do we tell you have a new connection? How do we tell you're in a new group? How do we prompt you to send a message into that group? How do we create those kind of sticky moments early on? Justin, what's the team size today? Yes, we're seven full-time.
How many engineers? A couple contractors. So we've got four engineers. And any quota-carrying sales reps?
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