The Journey to Build a Large, Profitable Business with Aleem Mawani of Streak
published October 13, 2020Episode #176
After raising money from VCs, Aleem Mawani (@aloo) chose a path that most VCs would consider a failure: to turn his company, Streak, into a large, profitable, and lasting software business. To do so, he'd have to pivot away from a failing idea, start charging customers who'd always been free, and bet everything on a risky platform controlled by another company. But today he's never been happier. In this episode, Aleem and I discuss when to work harder vs when to call it quits, how to pick the right community to surround yourself with, and how he chose a SaaS idea that scaled to millions in revenue.
Transcript
Courtland Allen:
What’s up, everybody? This is Courtland from IndieHackers.com and you’re listening to the Indie Hackers Podcast. On this show I talk to the founders of profitable internet businesses and I try to get a sense of what it’s like to be in their shoes. How did they get to where they are today?
How do they make decisions, both at their companies and in their personal lives, and what, exactly makes their businesses tick? And the goal here, as always, is so that the rest of us can learn from their examples and go on to build our own profitable internet businesses.
Today I’m talking to Aleem Mawani the founder of a company called Streak. Aleem and I both started companies around the same time, 2011 for me and 2012 for him. We were both funded by Y Combinator and both of us built Chrome extensions that modify your Gmail inbox and attempt to make you more productive.
The difference between our two companies is that his still exists. I gave up, quit, and moved on to other things whereas Aleem and his cofounder kept plugging away and today his company is very profitable, generates millions in revenue, employs a few dozen people, and he’s happy running it. In this episode we get to hear Aleem’s story and how he got here.
It’s cool talking to you because we’ve both done things in the email space. I did Y Combinator back in 2011 with this app, Taskforce. Paul Graham had this huge kick on how everyone was going to work from their inbox, everyone already is working from their inbox.
If you can just build something interesting on top of the inbox, then that is your Trojan horse to get hundreds of millions of users. It didn’t really work out that way for me, I ended up pivoting away from Taskforce and working on other things. But I think you started Streak when, in 2012?
Aleem Mawani:
Early 2012. Yeah, we were in YC 2011, we should talk about that later, but we pivoted through YC and, yeah, 2012 is when we actually got serious about Streak.
Courtland Allen:
It’s been eight years now. How well is Streak doing now in terms of revenue, users, company size, or however you measure your success?
Aleem Mawani:
Yeah, revenue is obviously a big part of it. I think the part of it that we are most proud is profitable, being sort of a profitable Silicon Valley startup. It kind of shouldn’t be abnormal, but it is, and so we’re happy that we are sort of self-sustaining and basically controlling our destiny.
So, yeah, profitable, we have 30 folks on the team. We were in two offices before and now we’re remote like most people. And, yeah, revenue in the millions.
Courtland Allen:
Super exciting and not particularly common for companies, I think, that were started back then to try to be profitable. I remember doing YC and building an email product and the partners there saying, “Why are you charging money?” because we were part of the Stripe beta in 2011 and it was like anathema back then to try to charge money for what you were doing.
You needed to grow as big as you possibly could, get millions of users, and then figure it out later like all the rest of the Silicon Valley startups were doing.
Aleem Mawani:
Right. We tried that as well, actually. It wasn’t that we were profitable from day one. We didn’t charge from day one either. But at some point, we were like, for us it was like we are a CRM product built into Gmail and so for us we weren’t too worried about people paying us because they were used to paying for CRMs. They were used to paying for expensive Salesforce.
We weren’t too worried about, “Hey, could we eventually charge for this product?” We kind of knew we could. And we just honestly like we were kind of lazy at the beginning. We just didn’t want to do the billing system; we didn’t want to do like promos and A/B testing pricing pages and stuff. We just wanted to hone and perfect the product.
Courtland Allen:
And there was really probably no pressure back then to start charging anyway.
Aleem Mawani:
Yeah, I mean like we had raised the money and done the YC things and got some money there. We had raised Seed Rounds and we had some money there. We weren’t really hiring that many people, we had 3 or 4 people on a team. So, like there wasn’t a lot of pressure for us to like start charging right away.
Courtland Allen:
So if you could go back to 2012 and tell the brand-new founder Aleem, “Hey, this is where we are in 2020, this is what we are up to, this is how much money we’re making, and how big the company is.” What do you think he’d say?
Aleem Mawani:
It’s interesting. I would be happy that we didn’t die. I used to think of startups as like very, very bimodal, and like that is kind of is in the conventional wisdom, that you either get massive like Google-massive, or you die.
Like those are the two options. And I think the thing that would have surprised me back then was that there is this third option of being a large, growing business that is profitable and making money but not necessarily like Google-size. And that’s like a great place to be.
Courtland Allen:
Yeah, I agree. I mean, you get a lot of control over basically what you do with your life, what you build at your company. You’re generating revenue, you’re profitable, you got 30 people. I mean that’s enough people you can just do pretty much anything you want. You can say, “OK, we’re going to build this cool feature.” And just go do it. You can take probably weeks off and be fine.
It’s not necessarily, I think, what investors, at least in like high-growth startups, have traditionally said they wanted. They want you to go for the boom or the bust. How do you deal with those expectations because you said you raised money? Do your investors care that you want to take this third option?
Aleem Mawani:
Right, right. Maybe it’s more than 3 options because either you die, or you get Google-huge in nine months and then this sort of middle option a lot of investors would claim that’s kind of like a lifestyle business. But I don’t look at Streak as like a lifestyle business, I look at it as like, “Hey, I’m still putting in a lot of work and a lot of effort.” But it’s because I want to, and I really enjoy what I’m doing.
It’s not a lifestyle business in the sense of like, “Hey, I work 4 hours a week and that’s it.” It’s not that at all. Maybe that’s like a fourth option. But there is this option of still working hard on a business you really enjoy, it growing, it becoming very large. There are examples of companies, like Basecamp is a good example.
I don’t think they’ve published their revenue numbers but from what I know, they are an extremely profitable company. In terms of revenue, like, very large. So, you can be a large, growing company without necessarily the whole VC route.
I think that’s great for us because, yeah, like you said, we don’t have all the pressure to do things we don’t want. We have the time to focus on making sure the inside of the company is solid, the people enjoy their work.
That we communicate well, we enjoy the people we work with, we work on things we enjoy, and we have more time to breath and do those things as opposed to like, I think when you’re under constant pressure on the VC track, like you kind of put those concerns aside and you’re like, “Oh, I’ll deal with those later.”
Courtland Allen:
I think the term “lifestyle business” being this sort of derogatory phrase to describe people who don’t want to work is so silly because number one, who doesn’t want a good lifestyle? You look at the founders of any huge company and you know what they are doing? Spending a lot of time making sure their life is great.
Number two, there isn’t just one lifestyle. Not everyone wants to work just four hours a week and then sit on a beach. A lot of people really enjoy the companies that they build, really enjoy the unique lifestyle your company can provide for you. I think you get a lot more control over it, quite frankly, if you run your own company than work for someone else. I’ve never really understood why that’s been such a derogatory term.
Aleem Mawani:
Yes, I don’t look at it as derogatory and you’re right. You have to spend time designing your life. I think maybe the difference is with the VC backed companies you can say, “Hey, this is going boom or bust in 18 months and so for 18 months I can do – I’ll put up with anything.” I don’t care about my lifestyle being great, or not. I’ll put up with anything and just get it done and then after that everything will be fine.”
And so, it’s great if it works out like that because there is finite time. It’s kind of like two camps where the lifestyle people are saying, “Hey, this VC track people are doing the wrong thing,” and the VC track people are looking at the lifestyle people and they’re saying like, “Hey you’re doing the wrong thing.”
I think both are fine as long as you know which one you are doing and why you’re doing it. So, if you are on the 18-month thing and you’re like, “Hey I want to know – I want to have an answer in 18 months whether this is huge or not.”
Great, do the VC track thing and like, go for it. If instead, you want to design your life starting from now, you do it a little bit differently. Actually, sort of an open question for me that I’ve been struggling with is actually, we started in that path. We started in the whole like, “Hey we want to do the 18-month thing,” or whatever.
And that’s obviously changed sort of since then. But I think we got really lucky. We got the opportunity to raise some money, so we didn’t feel the pressure at the beginning. We had the chance at going big in 18 months, not that we’re not going to go big in a longer time horizon, but we had a chance to go big and that didn’t happen.
The alternative wasn’t zero for us. The alternative, instead what happened, was we failed according to the VC model, but the alternative was we created this large, profitable business instead. That was the failure-mode, was large profitable business.
And large, profitable, and growing software business. And so like, I think that’s an option for – I think with SaaS it opens that option as like, there basically needs to be a new model for, “Hey, yes, you can raise money and attempt to go to the billion outcome in 18 months, but if it doesn’t work out here’s this other option.”
Right now there isn’t a clean way to make that transition. We kind of got lucky making that transition but there isn’t a clean way, for example, with investors of like how you make that transition. There is no convertible note that says, “Hey, if you end up becoming a large, profitable business instead, here is what happens to the note.”
Right, like all the financing docs and stuff like that are built around if you go huge, here’s what happens and if you die, here’s what happens.
Courtland Allen:
There is no in between.
Aleem Mawani:
Yeah, nobody talks about that. I think that’s an option and a lot more founders would start companies if they knew, that like, they could still go big, and if not, they could still be a large, profitable company.
Courtland Allen:
You’re right. There is something appealing about that 18-month vision of like, “OK, I’m just gonna work super hard, I’m going to crush it, I’m going to sacrifice these two years of my life and then I’m going to be set for the rest of my life.”
It works out for some people. We’ve both met people who that happened for. I tried that also in my 20’s and a lot of people say they don’t have any regrets. I regret trying it—100% if I can go back in time and do it differently, I would have worked more reasonable hours.
I think there is this idea that you can will a billion-dollar company into existence just by working super hard. But often I think if you hit on the market right and your product is right, like it’s kind of dragging that work out of you.
You are just running just trying to keep up. But if you are trying to push something that’s not really blowing up that way, you could get the same amount of work done in the half the time and have probably similar outcomes.
So, it’s not worth it. What are you sacrificing your life for, this thing that is not going to blow up? So, I think the dream makes a lot of sense but ultimately, it’s important to know when to call it quits and know you are not on the unicorn, crazy, compounding growth path.
Aleem Mawani:
Yeah, it’s probably useful to timebox it where it’s like, “Hey, this is something I want to do in my life, is to try to go down this VC path and make the next Google or whatever,” and there’s a huge amount of risk associated with it so I’m willing to commit sorta this amount of my – this number of years in my 20’s is reasonable to invest in that. It’s not reasonable to invest all of them, it’s not maybe reasonable and have no income. But, yeah, as long as you sort of timebox it.
That’s kind of what I mean with the investment thing, too, right. Like right now if you tried to raise money from an investor right now and said, “Hey, my plan is to become a billion-dollar company but in 18 months if that doesn’t work out, I’m just going to become a large, profitable business.”
If you said that in any pitch meeting, you would not get funded. But it is, I think, a really useful heuristic for founders, is to like, “Hey, I’m going to invest this amount of effort and this amount of time in doing this high-risk activity and when that high-risk activity doesn’t work – if it works, great I’ll keep going. If it doesn’t work, then here’s what I’m going to do next.” That’s a really useful heuristic for founders but right now it is too taboo to say that. You couldn’t say that in an investment meeting.
Courtland Allen:
I want to go back in time to the beginning of Streak and find out what you were thinking back then because now you’ve got all these very wise end takes where you’ve been through the trenches and seen possibilities.
At the beginning, if you are anything like I was, you had no idea what you were doing, and it was a huge black-box mystery in terms of what could happen. How did you first come to start working on Streak? How did you come up with the idea?
Aleem Mawani:
I was in grad school and knew I wanted to do a startup. I had been at Google before then and I actually left Google because I was like, “Hey, I’m kind of jaded on software and it’s not for me.”
So, I went to grad school to get into more physical businesses. I wanted to learn about transportation, I wanted to learn about manufacturing, but while at grad school, like I was doing all that work, but in my spare time I was like programming for fun. Like that’s just what I was doing for fun. Eventually I kind of realized like, “Hey, if I’m doing this for fun it’s probably what I enjoy and should be doing. But maybe just the environment at Google was not sort of for me.”
And so, I knew I wanted to start a company, and so I started working on, you know, like a made-up idea. It’s like, “Hey, I want to do a startup,” like, “what would be a great idea for a company?” And I just sat in my room by myself thinking of startup ideas or whatever. I think you can kind of predict where this story is going. It was basically like some loyalty program with your credit card or whatever, you know, something people don’t really care about.
And actually, I had a great line from Paul Bucha and TG (ph) about that. But yeah, I was doing that and ended up going to Y Combinator for that idea, worked on it for the entire batch and then basically --
Courtland Allen:
So they liked the idea?
Aleem Mawani:
I think they liked us because what I did was, with that idea, I went out to – and our customers would have been like local businesses. And so, I went out to a bunch of local businesses and said, “Hey, if I built this, would you use it? Would you pay for it?” I’m happy we did that, and they all said yes.
So that was interesting, but they all said yes. And I said, “Well, I don’t know if I trust you. Sign this piece of paper that says, ‘If you built this, I would pay for it.’” And, by the way, it’s non-binding at all. And so, of course, everyone signed it. And so, like that kind of made me feel like we were on to something and our business was sort of two-sided marketplace.
We had local business on one said and consumers on the other. I didn’t even bother testing the consumer side, I just went to the local businesses. And so, they liked the – YC liked us because we came into the interview and we were like, “Hey, we got like 20 letters signed. We haven’t built anything, but we have 20 letters signed.”
Courtland Allen:
Yeah, you’ve been pounding the pavement, you’ve been doing sales, you’re like the prototypical, “these founders are hungry, we’ll invest in them no matter what they are working on.”
Aleem Mawani:
Exactly, exactly. We do the office hours with PG (ph) and he would always push back on the idea being like, “Hey, is this really useful? Does anyone really want this?” And we’re like, “No, no, no.” Like, we were trying to be the prototypical founder of like, no you gotta really believe in your idea and you gotta like push back on anybody thinks that it’s going to fail or anything. So, we were like, “No, no, it’s going to work.”
And then, you know, two weeks before demo day we go to the PG office and be like, “Hey, like, our metrics aren’t good, like, how do we do demo day and show this to investors when our metrics aren’t that great?”
And he’s basically like, “Forget demo day. I’m just trying to understand how long it’s going to take you guys to realize that this is a bad idea, and you should not be working on this?”
I’m so grateful he was so direct, because like, and he was right. There’s no use in like, you know, putting lipstick on the pig for demo day. So, we pivoted two weeks before demo day.
Courtland Allen:
Crazy.
Aleem Mawani:
And then he had basically – PJ had great advice on how to pick the next idea and the main thing was, “What would you yourself have used in these last two months that you’ve been working on your business?” Like, what would you have used?
And initially our ideas were all like related to the thing that we were pivoting away from and he’s like, “Hey, your old crappy idea is done. Don’t try to like salvage anything from that. Don’t try to repurpose something you built for this new thing. No, just get rid of it, it’s gone. You’re starting from scratch.”
Courtland Allen:
Let’s zoom in on this solving your own problems thing where you’re trying to come up with an idea because I love the approach that you took. Often, I tell people that the best way to come up with an idea is to start a company that does anything, literally anything and when you are working on that you’re going to realize there are all these tools that you would pay for, that you would use, that you need, that are missing, and then go start one of those companies.
Aleem Mawani:
There was probably like ten or fifteen things we built internally that have now gone on to become like 100-million-dollar businesses or more. And it’s because like we needed them and so we kind of built them and had Streak not been going well we would have definitely picked on one of those ideas and made that our company, you know. So, I definitely agree with that advice. Just work on something and you’ll find something to work on.
Courtland Allen:
How did you choose Streak over these other ideas that had promise and could have been big companies? Why was that the one that stood out to you as promising?
Aleem Mawani:
Yeah, so for us, man, we were just so lucky, I think. I know that is not useful advice to say we were lucky, but I think it is important to recognize some events that happened. For us, we were selling to local businesses and we were pounding the pavement. We would literally walk down streets in San Francisco and knock on every local businesses’ door and just be like, “Hey, we want to sell you this thing. Hey, we want to sell you this thing.”
It was me and my cofounder and we’d come back to our office/apartment at the end of the day and it’d be like, “OK, like, how did you deals go? How did my deals go?” Eventually we were like, “Hey, this is kind of like what a CRM is for.” We had vaguely heard this term “CRM” and so we tried Salesforce and it was like, awful. For two people trying to run a small business, like Salesforce is not the product for you.
We were just shocked that that was the state-of-the-art and everyone used it. So instead, we just did a shared Google spreadsheet. We really liked it because we got to define the schema. You get to define what each row means, and you get to define what each column means. It’s like you define the products that you want to build.
The only problem is after we would pound the pavement, we’d email these small businesses and do all our sales over email and we were copying shit back and forth between email and spreadsheets and it gets out of sync and you don’t trust the spreadsheet anymore and then each of us just relied on our inbox. It was a complete mess.
So basically, the idea came from that. But the part that we got lucky with was when we shared the idea with PG we basically said, “Hey, we think there is something here for the sales use case but integrated in to email. We think there’s something there.” And he’s like, “Oh, let me show you this other email that I sent all the other YC founders.”
He had sent an email to a bunch of YC founders saying, “What do you need most as a company? What would you use most as a company, as like a product that you would use most?” And people started replying to him and describing all these products but 30% of them were like, “I need help doing X inside my inbox.” And these are all founders. So, it was like, “I need help doing hiring in my inbox. I need help doing sales in my inbox. I need help doing fundraising.”
It was all these founder use cases, and they were doing them all over email and they just needed some product to help them with that. And so that solidified the idea for us. Is like, hey, like, yes, we were thinking of it as a sales CRM use case in email, but really this is like every business process goes through email so like let’s build that thing.
Courtland Allen:
It just feels like it was meant to be where you are already solving this issue with your inbox and all this sales stuff and then everyone’s like, “Hey, we really need help in our inbox.” It’s like, “Well, if this isn’t a sign, I don’t know what is.
Aleem Mawani:
Right and again, super lucky. All those people that responded yes, like, PG forwarded that email to us and those were our initial customers. We just reached out to them and said we were building exactly this. So here it is. That’s how we got out initial few customers, too.
Courtland Allen:
That’s one of the most touted benefits of going through Y Combinator is that you have this giant batch of companies who all are trying got get ahead. They all need to pay for products, and they could be your first users and customers.
I think people who are building outside of that, like if you are trying to bootstrap a company today, it’s super underrated to just make friends with other founders, go to networking events. Now it’s all online but there are ton of webinars and online meetups and accountability groups and stuff like that, where you can just be friends with people.
Those people are trying to start stuff and they have money. They will pay you. They could be your first customers. It’s much easier to do that than it is for like your first contact with customers to be like attempting to launch Product Hunt. No one’s ever heard of you, no one’s going to support you not knowing who you are.
Aleem Mawani:
Right and no one cares.
Courtland Allen:
Yeah, no one cares.
Aleem Mawani:
That’s interesting, actually. I wonder if it’s like, there’s something to being part of some community that helps breed start-ups. Either like a university community where like your first users are your like classmates. Or something like YC where you’re first users are your batch mates or if you happen to live in Silicon Valley and like all your friends that you hang out with are all techies and so they become your first users.
Courtland Allen:
Or you are part of the Pay Pal mafia or something. You are part of a start-up and everyone there starts companies.
Aleem Mawani:
Yeah, exactly. I wonder if that is a hidden advantage for some of these communities – why these communities produce so many start-ups. It’s not just YC. Maybe it can be almost any community that you can leverage to being your first set of users.
Courtland Allen:
I think its super useful. I think it’s – we’re just social creatures. We look for inspiration among our tribes and the people around us. If you’re in a tribe of people who are not really that motivated and they’re not starting anything and not really working hard on anything. You’re going to feel less motivated and you’re going to feel kind of dumb about what you are doing.
Whereas if you’re going through Y Combinator, which is literally the polar opposite end of the spectrum, it’s like you’re going to suddenly feel like a crazy amount of energy to do a bunch of stuff you probably would never do. You are literally a computer programmer walking around the streets of San Francisco knocking on doors.
How many software developers anywhere else on earth are really doing that? I also feel bad for restaurants and store fronts in SF, because how many phone calls have they had?
Aleem Mawani:
How many things have they been pitched, yeah?
Courtland Allen:
I’m in Seattle but lived in SF for ten years. You walk into any restaurants in SF and they have 15 different gadgets on their counter from start-ups who pitched them some random stuff.
Aleem Mawani:
Right, right, right. Yeah, actually I think you’re exactly right. Being around people that are like maybe just one step ahead of you but still your peer group is probably the best motivation. Because you kind of look at your peers and you’re like, “Oh, man, I want to be like that and they’re doing really well, and I need to catch up to them.”
And, you know, at YC, there’s definitely like – they don’t really tout this, but there is definitely some social pressure. Right?
Courtland Allen:
A lot.
Aleem Mawani:
Like every Tuesday you get together with all the batch mates. And what’s everyone talking about? They’re talking about like the shit they got done in the last week and you’re like, “Ok, I don’t want to go to another dinner and not have anything to say. You know, I’m getting shit done this week to make sure that I have something to say on Tuesday.”
It’s not like the YC itself puts that pressure on you but they set up the environment where for sure where you want to talk about progress.
Courtland Allen:
That’s exactly it. Whatever environment you are in, that is what you are going to care about. If you’re part of the rich housewives of LA you’re going to be looking at lots of plastic surgery and who can live the most fabulous life and like that’s going to seem the most meaningful.
If you are going to these YC dinners every Tuesday and it’s like, “Whose company is growing the fastest?” You don’t want to be embarrassed and be at the bottom of the list. I think that trying to figure out a good social group for yourself is extremely important.
Aleem Mawani:
I think I got lucky with that. I’m not trying to name drop or anything but when I said grad school earlier, I went to Harvard Business School as my grad school because I wanted to try these different businesses.
And as an engineer going into a business school, you’re kind of like, you’re kind of suspicious. You’re like suspicious of this set of people. They’re all going to be like finance people or consulting people and like they’re just there to party and they aren’t really learning anything or whatever.
And so, I was like highly suspicious going in, but it was actually an amazing experience for me, like ignoring the academics. We can talk about it more later but ignoring the academics. The people that were all there, what surprised me was like they weren’t necessarily smart in the classical sense. Like, you know, engineers have this, like, you know they love being rational and logical and they love this idea of being smart. And so, you know, the people at this business school would not have met their definition of like being smart.
The think I learned from them is that they’re just incredibly hungry and incredibly driven. And you look at these people and they’re not any smarter than anybody else, yet they are doing some incredibly ambitious things and they work incredibly hard. And I would say that’s the thing I learned the most at business school.
I had a classmate who in his second year in business school raised 50 million dollars for a company he started at business school and the company was doing like sort of ecommerce in Brazil. Had he ever been to Brazil? No. Did he know the language? No.
But what did he do? He flew down there on weekends, he set up a warehouse, he like hired a bunch of people and he raised money, he bought a good domain name, and he parlayed that in to more and more success. He did that in the last 12 months of his time at business school.
Courtland Allen:
Crazy.
Aleem Mawani:
He ended up, you know, raising $50 million for this company that like – I don’t think your typical engineer would think of doing that. Right? Would think that that’s possible or think that they could do it. Just seeing that really kind of transformed my thinking of it.
Courtland Allen:
How did you approach starting this new company in the very beginning having had all this inspiration from these crazy hustlers at business school and having had gone through this failed knocking on restaurant doors and trying to sell them a product? What was your first step with your new product, your new idea, Streak, to build something in the inbox?
Aleem Mawani:
Well, we knew we had to talk to users. I think a failure mode that we had in the first company, so the first company was like loyalty points via credit card. And so, like you spend on your credit card and you get points automatically. You don’t have to scan anything or any bs like that. And we thought like, “Oh, loyalty points are great. You get free shit. Who’s not going to want free stuff? Everyone wants free stuff, right? Like everybody wants a free sandwich or free coffee or whatever. And so, all we have to do is like sell the businesses and then we’re good.”
And so, we sold the businesses, but it turns out the consumers didn’t actually want it. Right, like, if you ask a consumer, and you’re like, “Hey, like, do you want a free coffee?” They’re like, “Yeah, sure.” But, like, do they want it enough to tell their friends about it? Do they want it enough to put up with the bugs in your app? Do they want it enough to like, even download your app and connect their bank account? Like, no, they don’t. And so, we didn’t want to make that mistake again with the second product.
And so, yeah, we got our initial users through YC and we just basically like talked to them. We’d build something, show it to them, talk to them, build something else. Just take their feedback and just build it and that helped us a ton. To your point earlier of pushing versus pulling, like, once we had this sort of product built out, we had a lot of pull. Users were telling other users about it a lot.
And so, like, for us it was mostly about getting on the phone with them, the people that heard about us and wanted us. Getting on the phone with them and like making sure that we were the right fit, making sure we knew what they were trying to use it for. So, yeah, you can definitely feel when you are on to something versus when you are not on to something.
Courtland Allen:
And who is we at this point? You’ve got a cofounder?
Aleem Mawani:
Yeah, it was a cofounder of mine. We had kept in touch since college and I told him like, “Hey, I’m thinking of leaving business school and starting a company,” and he was actually working on his first company. So, he actually had some start up experience, which was great. That helped us a ton, too.
And he was actually just exiting that company, and so the timing was super gratuitous. I kind of hate saying we were lucky because it’s not useful advice for people, but I think maybe the thing to take away there is just like kind of keep in touch with your friends and, you know, talk about what you’re working on and talk about your interests and talk about, yeah, your goals.
Courtland Allen:
I think that is exactly it. People talk about making your own luck. How do you make it so like the universe just seems to open up its arms and just provide you the exact person or help you need at the right time?
And the secret is you just constantly do what you’re saying. You broadcast what you’re working on, you broadcast your challenges, your goals, what you’re trying to do. And that’s the only way people are going to know how to help you.
Aleem Mawani:
Yeah, and I think that goes back to our earlier discussion of the 18-month company versus the like, decade company. If you’re building an 18-month company, you have to be like – you don’t have time for any of that, or you don’t have time to build a relationship over a long term and so like you’re just hoping that you’re hyped enough to attract all the people that can help you, versus, like, for us for example. Our head of engineering I met in our YC batch. And it took me five years. He was a friend for five years before he become our head of engineering.
Right, like, so you could say it took me five years to recruit him. And it’s like, yeah, like if you’re building one of these long-term companies and you have to know that you want to build a long-term company, but the things that you do now are going to be helpful five, ten years from now.
Courtland Allen:
So when did you get to the point where you realized, like, this was actually going to work and wasn’t just temporary excitement from having the first few customers in the door, but it was a long-term business idea that you wanted to stick with?
Aleem Mawani:
When people started telling other people about it, is kind of when I figured, like, “Hey, we’re on to something.” Always in the back of your head when you are starting a new company, you’re kind of like, “Oh, like, if this doesn’t work, like, I wonder what else I can pivot to?” When people started telling other people about it, then that kind of thought in the back of my head kind of went away.
I was like, “Oh, no, no. This is a thing. This is a real thing.” Like if people are willing to tell other people about it then they are finding value in it. And so that’s when I kind of knew it was working and then just getting on the phone with them. We started doing pricing discussions. We were free for a while, but once we started doing pricing discussions that was another sort of proof point for me.
Courtland Allen:
Give me like a snapshot of what this actually looks like. I think a lot of founders are good at like the code part. They’re building the product, they’re like making something take shape. Maybe they see people signing up or whatever. But like you keep talking about getting on the phone with people and having these conversations. How are you actually convincing your customers to get on the phone with you? Who were these customers?
Aleem Mawani:
So, initially, because people were telling other people, people would sign up on the website or they would discover us in the Chrome Web Store because Streak is an extension built into Gmail. The way you install that extension is you go the Chrome Web Store. And it’s an app store, and back then there weren’t a lot of apps in there and so a lot of people would discover us there. So that was a little bit of fortuitous timing as well.
And so, they would discover us and then they would write into our email support. We only had email support. And they would write in questions like, “Hey, how do I do X?” “How do I take meeting notes?” Or “I’m getting on a call with a customer and I’m using your product as a CRM, how do I take call notes?”
Oh, we didn’t know people did that. Ok, let me email this person back and be like, “Hey we don’t have that right now, or you could do this weird work-around, like you could take notes in a Google doc and link it in the CRM.”
But, like, can I talk about that use-case. And basically, we’d hear that kind use-case enough and we’d be like, “OK, time to build it.” Right? And so, like maybe the first time you email them back and learn a little bit more and you kind of like bank it. Then you hear it a second time, a third time, and then that becomes like, “OK, this is something that people really want. We’ve got to build this.”
And like, to make sure we are building it right, let’s talk to them first to make sure we’re not building the wrong thing. We weren’t trained salespeople, we did sales for three months so we kind of knew the basics, but we didn’t know enough of the space to just build it off of our own knowledge, so we definitely had to talk to other people.
Courtland Allen:
It’s so strange to enter an industry where you’re not the expert. You didn’t work at Salesforce. You don’t know what people who use CRMs really need and so you’re kind of just winging it.
But, on the flip side, you’re solving your own problems so you kind of know what you need and that will get you a little bit of the way there. Contrary to popular belief, it’s not going to get you all of the way there. There aren’t a hundred- million people who are exactly like you and it turns out if you actually want to grow you’ve got to actually listen to this feedback and figure out what other people want.
This word-of-mouth thing is also pretty interesting, where you have people telling people about your product. And I think the common wisdom is to get word-of-mouth growth what you do is you have to build something that’s ten times better than what everybody else has.
It’s got to be so much better than when people use it, they don’t just continue using it happily, but they continue using it and telling everybody else how great it is. And that’s where word-of-mouth growth comes from.
Based on someone who has actually been in this position and people were spreading your product through word-of-mouth, how true is that? And are there other factors that contribute to people sharing what you’re doing?
Aleem Mawani:
I think it is definitely true for us because, I think there is a caveat to it. We were 10X better in one area. In a bunch of other areas, we were actually 10X worse. We were really bad at most things, but in this one specific area, our Gmail integration and how deeply we integrated with the UI of Gmail and the backend of Gmail, that experience was kind of sublime.
It’s kind of more common now, but back then it was kind of a revelation to see that, like, “Oh, the place where I’m doing all my work is also the place where I am tracking all my work.” That part of it was definitely 10X better. So, when people emailed us, they were like, “Hey, we love the product. We’re totally sold on the Gmail thing, but you can’t even take notes, you can’t make date column. I can’t record a dollar amount and you have no support for currency. How am I supposed to use you as a CRM?”
A lot of those things we still haven’t done to this day because it’s more important to be the 10X better and the way I think about it is that is the first phase of product development is that 10X better phase. Then the next phase is getting all the rest of the stuff to meet a minimum bar.
So, we spent a long time. CRM is kind of a product where there are so many features that people just expect and I think email clients are kind of like this as well. Building email clients is so hard because there are so many features that people just like, depend on like, “Oh, I need mute threads, I need to have email signatures, I need to have all these things and multiple inboxes, and split panes.”
And so, to even build an email client with your one unique insight, you have to build all these other features just to get people to use it. So, we spent a lot of time after building that 10X feature just getting decent at all the other stuff.
Courtland Allen:
At what point did you decide that you don’t want to try to be a billion-dollar company and that actually just charging people money for this 10X better product is a much better path?
Aleem Mawani:
I’d like to say that we were super thoughtful and smart about it. It wasn’t like a purposeful decision. It was like, “Hey, we’re growing at a fast clip and we’re starting to charge money and we’re profitable. So, there’s no huge need to raise money, but maybe we should do it for defense.”
That’s what most companies do when they are on this billion-dollar track. They raise money and so maybe we should do that and so we tested the waters a little bit and we could have raised money. It would have been a slog.
It would have been not on the greatest terms and we looked at that and were like, “Oh man, that’s going to be 6 months of pain to raise this money and for money that what would we even do with? It would sit in our bank account because we’re not money constrained right now.”
There’s nothing that we want to do where we’re like, “Oh, we don’t have enough money to do that,” and we have no pressure. We’re not going to die because we’re profitable. So why are we going to go through this pain of raising all this money and get not great terms? What’s the reason?
And so, we basically just kept pushing it off. We’re like, “Hey, is now the right time? Nope, we’re profitable. We still have money, and we can do whatever we want with the money we have. OK, so maybe in 6 months we try again.”
We kept pushing that decision forward and forward and forward, and like, it basically never came to a point where we needed to raise. I’d like to say it was some masterplan, but it definitely wasn’t.
Courtland Allen:
Was there a moment where you just accepted, you know what? This is never going to happen.
Aleem Mawani:
Well, I mean, if you ask me today, I think there’s still a chance that we go raise money. It wouldn’t be the type of money we raise one year in like a series A round or something like that. If we were to go raise money now it would be more likely to be a growth round or something like that.
I’m not philosophically opposed to any of these ideas. This idea of never raising money or this idea of “Oh, you must raise money.” I don’t buy in to the philosophies behind those. I’m just pragmatic about it. If we can use money to help reach some more goals then great, we’ll do that. And if we don’t need it, then we won’t do that.
Courtland Allen:
It’s the reasonable mindset. And people don’t want to hear a reasonable mindset. They want the extreme.
Aleem Mawani:
Yeah, it doesn’t make headlines.
Courtland Allen:
Yeah, it doesn’t make headlines. But I think it’s becoming more common. There are more investors nowadays who are figuring out ways to profitably invest in these sort of slower growth Indie Hacker companies.
Compared to when you started Streak and when I was in YC in 2011 there is just much more understanding in the high-growth investor community of building a business that is profitable, where you actually charge money.
I feel like both sides are sort of converging on this reasonable center which is like, “Yeah, evaluate your options, try to build a business that has good business fundamentals, and go from there. It’s not as religious as it used to be.”
Aleem Mawani:
Yeah. At the end of the day, like, if you’re not providing value to users, all of this is moot anyways. If you are providing value to users, all of this is also moot because it will be obvious what to do. It’s kind of like the only reasonable advice is to build something valuable and it’ll be easy to make decisions after that.
And by the way, some of these companies which are slower, but growing profitable businesses become juggernauts. After many years they compound. Like Atlassian, they didn’t raise a dollar for the first 10 years or something. Then they raised Sequoia money and then IPO’d or whatever. I don’t think it’s ever the case that doors are closed to you just because you’ve taken an approach in the past.
Courtland Allen:
I had Jason Cohen on the podcast who’s sort of like a bootstrapping hero. He bootstrapped three or four companies to over a million dollars in revenue and then his last one, it was doing the same thing, same trajectory, and he was like, “You know what? I’m just going to go for the gold.”
He hired a CEO, he raised a ton of money, and now he’s doing something like 200 or 300 million dollars in revenue. It’s crazy.
Aleem Mawani:
Amazing, amazing.
Courtland Allen:
You can take any path you want. You can bootstrap and then fundraise. You can fundraise and then never raise again and just sort of live off your profits. Start different companies and do different paths. What’s striking to me about your particular story is that you almost followed what today is the bootstrapper playbook.
You pick an idea where there’s like a proven track record of companies making money in this space. And it is kind of boring and kind of straight forward, it’s CRMs, they already exist. But you’re not trying to enter some sort of winner-take-all social networking market or something like that. You’re just trying to create a business.
And then in order to compete with everybody, instead of targeting their customers, you niched down and picked a really specific use case. Which, in your situation, was the email inbox.
Aleem Mawani:
Founders.
Courtland Allen:
Exactly. Email inbox, founders, and so ultimately, as you said, you’re ten times better in this very narrow scope and your ten times worse in every other scope but it doesn’t matter to you because you are a fledgling company.
You don’t care if you’re only making a few dollars, you’re just getting started. Do you remember like your very first sale? The very first time someone actually paid you for Streak?
Aleem Mawani:
Yeah. It’s kind of crazy. So, we weren’t charging for the longest time and we kind of decided, “Hey, we should probably start charging money,” just because at some point we needed to have income.
Actually, it was more being afraid of our previous experience with our previous company where like, actually people didn’t really want it. So, we were worried that like, “Hey, it’s free now and people are using it because it’s free,” but if it was paid people would never use it. And so, like we wanted to just double-check that.
But again, we didn’t want to build a billing system or pricing page or anything like that. We were lazy. So, we just called one of our biggest customers which was Uber at the time. Had like, I think like fifty users using us or something.
And we were basically like, “Hey, it’s kinda time to pay.” And we figured this would be the easiest sale because they had tons of money. This would be the easiest. And tons of usage of the product. So, we were like, “Hey, it’s kind of time to pay.” I remember the guy on the phone was like, “We’re not paying you already? We don’t already pay for this product?”
I’m like, “No, it’s free.” And he’s like, “I can’t believe we’re depending on your product which is not paid. We’re not paying you any money. I don’t know what kind of support we’re getting. I don’t know if you’re going to be around in six months, but we use your product for a critical part of our business. I can’t believe we’re not paying you.”
And so that was the easiest sale ever because they like, really wanted to pay. So, he was like, “How much is it?” So, I just made up a number. I said $10 a user a month and he’s like “OK.” Done. Hang up. That was it. So that was the first sale.
The next call sort of did the same thing. He said, “What is the price?” I said, “Oh, it’s $20 a user a month.” And they’re like, “OK.” Done. Hang up. I basically just kept doing these phone calls and kept raising the price by ten bucks until somebody said, “Eh, that seems a little,”
Like as soon as I got a little bit of push back, I was like, “OK, that’s the right price.”
Courtland Allen:
(Laughter). I did the same thing with Indie Hackers when I had sponsorships back when I first launched the site. I had a list of basically, “OK, these are my dream sponsors, these are people who have interacted with Indie Hacker before. I’m just going to go through them one at a time and just email them and call them and just say a price.”
But I went backwards. So, like, my dream sponsors was actually Stripe. And they’re at the very bottom of my list so I was like ok, I want to talk to them last after I perfect everything. But you went after the juggernaut immediately.
Aleem Mawani:
I just wanted somebody that was going to say yes. We could see their usage internally and so we knew that they were depending on the product, and so like I just wanted to get to a yes.
And I think that a lot of startup is like kind of building momentum and like it felt good to have that first sale, that second sale. It kind of just like built up some momentum. Even later if we got some push-back on the pricing, that didn’t feel bad because we had sort of built up this momentum.
Courtland Allen:
Yeah, you locked in those yeses. I should have done it that way because I got a lot of no’s at first. Pretty discouraging when everyone is like, “No, no, no. We can’t afford it. Nope, sorry.”
Aleem Mawani:
Yeah, it’s all momentum based.
Courtland Allen:
So at this point you’re charging for your product. You’ve got some money in the bank. You’ve got Uber using you and you know you’re actually building something that people care about.
Which I think is worth actually diving into for a second because you mentioned earlier with like your sort of loyalty program thing you were working on, people told you they would pay for it, but they didn’t care that much. It wasn’t like if your thing goes down people will be in tears on the street because their life is ruined.
No one really cared. It’s kind of like this unessential thing. Whereas what you’re doing with Streak was very mission critical. Uber is using it. They’re concerned that if your company goes out of business they will be screwed because so much of their data is in what you are doing.
I think a lot of founders have trouble with this when they’re first trying to figure out what to work on like, “Well, I don’t have big team, I’m real small. Can I build something important and mission critical? No, I don’t trust myself to do that, I’m too small and can’t compete. So, I’ve got to go build something that solves a really small, simple problem and is really cheap and people will pay for that. I’m just not big enough to really try to go after an important problem.”
From your perspective, as somebody who has done both of these approaches, what would you say to a founder who is convincing themselves of that right at the beginning?
Aleem Mawani:
Oh man, based on our experience, again, this is only our experience. But like, when we had something free it was harder to sell than when we had something that was paid for. Actually, it was better than free. We would give you free stuff, we would give you coffees and sandwiches. We’d give you free stuff and we couldn’t get people to pay attention.
And it’s because like that’s not the thing that is on their mind every day. They don’t think, like, in the morning, they don’t wake up and go, “Hmm, how am I going to get my free coffee today? Like I really gotta be thoughtful about the tools I use to get my free coffee.”
It’s like, no, they don’t give a shit. But for us, when like a sales manager wakes up, they are thinking about, “Hey, my sales team, like I need to know if they’re doing well. We’re paying them a lot of money; I need to organize our deals. I need to look at all of my teams’ deals and see what is going on with them.”
It’s a really important thing for them. Because they are thinking about it all of the time. When they’re in the shower in the morning, what are they worried about? What’s the critical piece of their job as sales manager? It’s like, “Am I going to hit my quota this quarter?” That’s the thing they think about in the morning.
So, giving them something that takes away that pain, takes away that worry, is so much easier because it’s on their mind. It’s like at the forefront of their mind. So, I think maybe the generalizable advice is to find the type of person who has – like know what this persona has at the forefront of their mind. What’s their biggest pain? And then make something that makes them feel less stressed.
Do that and there will be some pull. Obviously, it’s easier said than done. The hard part is knowing the persona, knowing what makes them stressed, knowing their problems, knowing their motivations and their incentives and that kind of stuff. Again, I guess that goes back to talking to people.
Courtland Allen:
That’s so unintuitive, especially if it’s your first time starting a business. People don’t buy things because they’re cheap, they buy things because they are valuable. I could probably sell you a $10,000 car way easier than I could sell you my $10 pair of socks.
And people who aren’t aware of this don’t spend a lot of time thinking about, “OK, what do my customers find valuable, what’s the most important thing on their list?” They instead get stuck trying to lower their prices and maybe that will get people to buy. Or trying to add a bunch of random features and maybe that will get people to buy. It doesn’t work.
Aleem Mawani:
There is always that temptation to just like start building something. As an engineer I totally feel that even today. At Streak we are working on a new product that is going to be integrated to Streak, but my first temptation was, “Oh, let me mock this out and get the team to build it and we’re good.”
That was my first instinct. Even then, I think I am probably the most qualified person to take that approach because I’ve been talking to these users for eight years. Even still, I’m doubting myself and so I had to hold back and like, let me do ten user interviews before I actually spec something out or mock something up. Just let me make sure.
And honestly, I don’t think it’s that bad to build a few features to test the waters a little bit but definitely time box it. The worst thing to do is to go for six months building stuff that nobody is using.
I would say like, a couple of weeks build something, enough to get a conversation going with somebody. This is actually a great conversation starter. To be able to send a little feature or a little toy, whatever you built to a prospective customer and be like, “Hey, I built this small thing. I know it’s not everything that you would want, but what is your feedback? What do you think about it?” I think that is an easier way to talk to people because most people don’t answer your cold emails.
Courtland Allen:
It’s also, I think, becoming more common for people to build these small MVP-ish things. In part, because number one, there are more people who are developers who could just do it, but also because there has been kind of this rise of like no-code and low-code tools where you can whip out a landing page or a mock-up or a concept of a feature using Zapier or something in almost no time.
I meet Indie Hackers all the time who are like, “Yeah, I build this thing,” and I’m like, “This is incredibly impressive, how does it work?” And they’re like, “Oh, it’s just all these things I stitched together in the back end, it’s held together by duct tape and it’s going to fall apart at the lightest breeze, but, like, I built it in a day,” and you can go show that to people.
Aleem Mawani:
I know there is a lot of hype around the no-code thing and I think there is something to it for exactly the reason you are describing, which is like it’s a great sales tool. It makes you seem bigger than you are. To your point earlier, like, how is somebody going to take me seriously? I’m just one developer.
But if you use Webflow and a good template off Webflow and hack some stuff together using Zapier, there’s almost no difference between what a customer would see between you, a single developer in your basement, and like, a team of 20. It looks roughly the same on first blush.
And so, like you can fake it till you make it. We used to hear stories of these start-ups who would hire a bunch of people off Craig’s List to just come into the office and sit in desks and pretend they were employees when a big sales meeting happened on site just to make them look bigger.
But I guess no-code is the new way of making yourself look bigger than you actually are. So, I think it is great from that perspective, but I don’t buy in to the hype that this is going to be the way that we build apps in the future. Maybe some internal tooling is useful?
But even then, one of the companies that I’d love to plug is Retool. They are a low-code platform for internal tools. That I think is the right model. The customer is internal people who have sort of a lower, I wouldn’t say quality bar, but like design or aesthetic bar.
You still code a little bit, there is still JavaScript in there. It’s actually meant for engineers to build, but it just amplifies their efforts. That’s the way I see this low-code versus no-code thing. I’m not a huge believer that the no-code thing will replace how we build apps.
Courtland Allen:
You heard it here first, folks. Aleem Mawani, no-code hater, he’s a doubter.
Aleem Mawani:
Honestly, I tried a side project using nothing but no-code and there was a surprising amount of code in no-code. Even if it doesn’t look like coding, you’re coding. You’re using their drag and drop builders and building IF statements and stuff like that. It is coding.
Courtland Allen:
Of course. You want to put your own logic in there, you want to react differently to different situations and have loops and repeat things. Eventually you are just a coder using kind of shitty coding tools.
Maybe what will happen is it will get people more comfortable with coding. Once they realize that what you are doing is actually kind of coding and then we actually take a tutorial for learning how to code. Some of these concepts now seem familiar because you’ve done them in no-code. You’ll be more willing to take the leap and go further.
Aleem Mawani:
I think the tool that has already done that is Spreadsheets. Excel and Google Sheets have already made programmers out of millions of people that don’t even know they’re programmers. And the problem is, they can’t make the jump from sheets to coding because spreadsheets are a functional language and most beginner coding tutorials or whatever are all imperative.
There are all these environments that you have to set up and stuff like that whereas a spreadsheet you just open it and start coding. That is why I am a huge, huge believer of things like Darklang, or Repl.it, those kinds of platforms. If you can take a spreadsheet coder and make them a regular coder, that’s a big opportunity right there.
Courtland Allen:
I’ve taught a few people to code, just friends and family. The biggest hurdle is always the environment. It’s always like, it just takes them hours just to get to the point where they can write any code somewhere where it’s actually going to run or they’re writing in a random box on this website that doesn’t correspond to where they’d write it in real life.
Just getting a computer in their environment set up to be able to actually compile or interpret code is a huge hurdle and people give up because it doesn’t seem worth it.
Aleem Mawani:
Yeah, think about it. Spreadsheets, it’s like the ultimate programming environment. No set-up, you see all the intermediate values at all times, your program is always running, it’s easy to debug because you can see the state throughout the whole thing, and you type the code in to the place where the interface is.
It’s not like you type into a text file and then see the web page somewhere else. It’s all in one environment. It’s the ultimate programming environment. So, I’m not surprised that it has millions of programmers.
Courtland Allen:
All right, so if you are listening and looking for a business idea, I think teaching people to code is always lucrative. People pay thousands of dollars to learn how to do it. The number of ways to teach people to code is pretty much infinite because people have different learning styles and so if you want to take Aleem’s spreadsheet idea and run with it, then you should go for it. Give him a cut.
With your particular product, Streak, I think I’d be remiss if I didn’t remark on the technical challenges that you faced because I also built products in the inbox and it’s not easy. You have a lot of platform risk specifically because you are building this CRM that is directly integrated into Gmail and Gmail did not have an API for modifying their user interface.
They weren’t like, “Oh yeah, we support this, this is fine.” They’re randomly, and I know this from my experience, they’re randomly just changing their interface all the time without any sort of warning. They’ll deploy tests on some users where some people will have their inbox tab moved to the left, or some people get the new features, and some people don’t.
You, as a developer, trying to build on top of all this can be kind of blind. You have no idea why your app is breaking for some people and not for other people. At least if you are anything like me, I always have this fear in the back of my mind that if I keep building on top of Gmail, one day they are going to flip some switch and I’m screwed. My whole company is done. Did you not worry about that?
Aleem Mawani:
Yeah. It was the 10X feature that made users want us, but it was also the biggest risk in our company. We got that same sort of push back from investors, we got it from potential employees, we got it from just like customers. Even customers, because our customers were actually technically savvy, they were always worried that Streak wouldn’t exist in six months or whatever.
So actually, that’s one area where we did actually, and the no-code thing would not have helped us here at all, we did have to invest a lot of technical effort to prove that model out and prove that we could be resilient to Gmail changes. So, not only did we want to show that like, “Hey, we can build a complete app inside of Gmail,” we also wanted to show that irregardless of how Gmail changes their implementation, we’re still OK.
So, we built a bunch of systems that made that possible. We had systems that monitored Gmail’s dom (ph) to make sure that everything was where we expected it. And if something wasn’t where we expected, then it would alert us, and we’d go look into it, like, “Hey is Gmail rolling something out?” Because like, Gmail rolls things out slowly. So maybe 1% of our users would see this slightly weirder dom and we want to make sure we’re still compatible with that.
So, we have all these tools and systems and automated testing in place to make sure that that was super solid. And all that technology that knew how to deal with Gmail, we actually opened it up, we opened it up for other developers.
If now you want to build an app on Gmail and you don’t want to go through the same worries that we had to and go through the same Herculean effort that we had to in dealing with Gmail, we have an SDK that lets you program against high-level API’s and we handle all that stuff dealing with Gmail.
We react when Gmail changes and all that kind of stuff. But yeah, back in the day it was a big risk. One thing that helped the risk as well was that I worked at Google and so I kind of knew the people who were on the Gmail team.
Courtland Allen:
I knew it. I always wanted to ask you how many people did you know at Gmail? Because this is inordinately stressful.
Aleem Mawani:
Yeah, I knew a few engineers on the team, I knew a few project managers on the team. Of course, they couldn’t officially endorse it, but they were like, “Hey, here’s our two-year road map and we don’t think we are going to change these parts of it,” or whatever.
So that gave me a little bit of comfort. But the thing that gave me the most comfort was when they actually said, “Here’s my two-year road map,” the time it would take them to deliver that two-year road map was actually like five years.
So, Gmail is a great platform to build on because it has a billion and a half users, but it’s such a slow-moving platform that I’m not worried that Gmail is going to keep changing stuff that would affect us. We are way faster than they are. When they change something, we react in a few hours and for them to change something takes them years. So, like it’s not a huge deal.
Courtland Allen:
A lot of people today starting start-ups are dealing with this issue of platform risk. Maybe not code-based platform risk but more like distribution based. If I start my blog on Medium or Substack, am I going to be locked into that? If I start on YouTube am I basically at the whims of YouTube? How do you think about de-risking that? Or did you 100% go “We’re all in on Gmail and if we’re dead we’re dead, but we don’t care about the risk.”
Aleem Mawani:
So what’s interesting is, yes, our product lived in Gmail, but our distribution didn’t come from Gmail. Our distribution came from the Chrome Web Store. So that was the only place you could find us before was in the Chrome Web Store. And it was great because not a lot of competition like I said, and we were getting a ton of installs from there.
But that distribution channel was like an arbitrage, like a lot of traffic for not a lot of people knowing about it. But these arbitrages, they disappear, so over time we went from having 90% of our traffic come from the Chrome Web Store to 10% of our traffic coming from the Chrome Web Store.
So, I think for other founders, take advantage of these weird distribution opportunities but make sure that your product is agnostic of where the distribution comes from. You could switch to another distribution channel.
But it’s still useful to build on Medium or Substack or whatever when there are there these weird arbitrages but eventually you’ve got to build your own. Like now, 90% of our traffic comes direct. We don’t do marketing, outbound marketing or anything. It comes direct because we’ve built a user base that knows about us, that likes us, and tells their friends about us.
So now we have it in our control, but there was a time when like if the Chrome Web Store turned us off, we would have been dead.
Courtland Allen:
When you were looking at those numbers falling what are you thinking? How do you model that process in your head like, “Oh shit, this distribution channel might not work forever,” and you’re not quite sure which ones to explore?
Aleem Mawani:
The writing was on the wall. When the Chrome Web Store first launched, anytime you were in the Chrome browser and pressed the new tab page, there was a giant link for the Chrome Web Store, and you had 300 million people using Chrome.
So obviously there is going to be a ton of traffic for that thing and you go to the Chrome Web Store and there’s like 20 apps and they are all shit. And we’re like, “OK, this is not going to last. People are going to see this and it’s not going to last.”
We can use it to build up our user base, but really, we need to find other distribution channels and for us the other distribution channel was just word of mouth because we saw that even though our Chrome Web Store traffic was going down, our overall traffic was going up and we started asking, “Where is this traffic coming from?” And it was all people recommending other people and we were like, “OK, we’re not worried anymore.”
Courtland Allen:
Crazy. And such a good channel to have, word of mouth. It’s the one thing that will last even if everything else goes away. Even if you never find a replacement for the Chrome Web Store. Even if you never hit on influencer marketing or become and expert at SEO.
If users keep telling other users and they’re churning less often than they are recommending other people, then that is just an engine for indefinite, permanent growth. And you don’t really have to invest a lot of money in marketing and growth and getting bigger.
Aleem Mawani:
Agreed. 100%.
Courtland Allen:
So where is Streak at today? I mean, obviously, you’re up to 30 people, you’re generating millions in revenue, what’s at the top of your mind and what are some recent things you’ve been working on?
Aleem Mawani:
It’s kind of crazy. We’ve been working on stuff that’s been a problem that our users have told us were problems for years. And we kinda never had a good solution in mind up until very recently and we launched that two months ago basically.
We call it Streak 3, it’s like our third major version of the Streak product. It’s stuff we’ve wanted to do for like literally six years and haven’t either had the technology or haven’t really understood the product well enough or understand our users well enough and we’ve finally gotten around to doing it.
We’re still working on things that are pretty fundamental. That’s what I mean about this sort of longer-term companies. It’s important that we are still solving hard problems because our team, that’s what we enjoy doing. There’s still plenty of those problems left.
In terms of goals, we want to expand our product suite, we want to offer new products. It is kind of cool to be working on new products while having existing products because an existing product, making sure that 10X part is still really solid, and making sure all the other features you have to beat table stakes at, you’re getting all those done.
So, we get to do a little bit of that kind of product development. We also get to do early-stage product development where it’s, “Hey, we know nothing, we know nothing about the problem. We want to talk to a bunch of users. We’re going to build something really small first. We’re going to see how that works. We’re going to think about how we’re going to do distribution.”
Even though it’s like a single company, I feel like larger companies, we’re starting to offer multiple products and that lets you have a way of keeping things fresh and not boring.
Courtland Allen:
You’ve been around for close to ten years now and I think rebuilding your product from the ground up is exactly what they warn you against doing as a developer. It’s one of the ten developer commandments. So how do you get away with that and what is your rationale?
Aleem Mawani:
Our users. They just tell us, “Hey, this thing sucks about your product, and it could be way better if it worked this way.” And the way they wanted it to work was fundamentally different in a certain area, and so we had to rebuild a huge part of our product.
Also, a part of it is packaging and marketing because on the engineering side it’s really, really good practice to launch features as they come like, small tweak here, launch it. Small tweak here, launch it.
And like, as fine grained as you can, just continuously be launching. That’s really good for your existing users because they see the steady improvement and it’s really good for engineering because it’s easier to do that kind of deployment.
But it’s not great for marketing because if there is a customer who hasn’t seen you around or checked you out maybe a few years ago, there is no reason for them to look at you again unless there is some big, new thing.
And you can’t make a mountain out of a – it’s hard to make a mountain out of a mole hill when like you just dripped out one small, little feature and you’re like, “Hey, come check us out we just did this one small, little thing.” That’s not really a marketing event.
Press doesn’t want to pick up on you, it’s not worthy of a Product Hunt launch, it’s hard to really talk about as some new thing you should check out again. But, if you take all those features that you’ve sort of built up and launched individually, even though they’re already launched. You know we launched a lot of Streak 3 before Streak 3 launched.
And you take all those features, you bundle them all together and you say, “OK, this is Streak 3. Now I’m going to tell the world about Streak 3.” It’s this bundle of things and I’m going to market it and I’m going to tell people why its new, why it’s different, why it’s a different product than what they may have tried in the past.
Emailing a bunch of our old users saying, “Hey, we have a package of things now that is fundamentally better.” So yeah, that was another reason why we wanted to make a big launch.
Courtland Allen:
Yeah, it’s like the best of both worlds. Sort of drip out features and then to package them together in a huge launch, so people don’t realize you just dripped them out the whole time.
Some companies do the exact opposite. Google drives me crazy where they’ll just abandon a product for all intents and purposes, you see nothing happen. I use Google Play Music for whatever reason instead of Spotify and it’s like they just didn’t improve or update this product for seemingly years, and it turns out that behind the scenes they’re building this entirely new thing called YouTube Music, but as a user I’m just pissed because I’m like, “What’s happening here? You don’t care about it and you’ve abandoned it completely. Why am I going to keep placing faith in you when you’re not even working on your own thing? God knows how many engineers, you can’t spare a few to fix these obvious bugs?”
They’re like, “No, no, no, no. We’ve got this big, packaged thing coming, don’t worry. It’s called YouTube Music. But it’s like by that time I’ve already left. So, if you can sort of like drip them out and then make this announcement that no one has to know is really just a bunch of stuff you released like a year ago. I feel like that is the win-win.
Aleem Mawani:
I think it’s a good tactic for start-ups because I think users want to know that this product that they are using from this tiny company is going to be around. So, when they get a steady set of emails, existing users, we try to email our existing users at least once every two weeks with something new that happened.
“Hey, we just launched this thing. Hey, we just fixed these bugs. Hey, we just did this.” Again, makes you seem bigger than you are because it gives users confidence that you are going to be around and that you are investing in this thing and they’ve made a good decision.”
Like, “Hey, maybe the product that you’re using right now doesn’t do all the things that you want it to do.” “Oh, but I know that Streak team, they just crank on features so maybe it’s coming soon. I’ll stick around.” And it helps your retention, it helps so many things if you just advertise to your existing users the drip. But new users, you do the package.
Courtland Allen:
There is a lot of, I think, very common start-up advice and I want to get your opinion on having actually lived through it. Some of it’s older, some of it’s newer. One of the older takes is that “market trumps everything.”
I think it was Mark Andreessen who first started saying this maybe ten years ago. Like, “Hey, I’ll take the market over the team any day.” If you have a great team and you give them a crappy market, they’re going to be dead in a few years. If you take a mediocre team and put them in a great growing market, they’re going to crush it.
Aleem Mawani:
I think the market basically sets the cap. It sets the upper limit on how big the company can be so you can have a great founder and a great team working on a market that is capped at 10 million bucks and they’ll execute the hell out of that and get to maybe 90% of the market.
And then you have the same great team on a market that is maybe a 100-million-dollar market. They’ll get to 90 million. They’ll always get there. They’ll always get to where they are going to go in terms of percentage of the market.
And so, I think for founders deciding on what market to go after, it doesn’t have to be the billion-dollar market. We’ve shown that you can be very profitable and grow very well in like a 10-million-dollar market and you just have to set your expectations at like, “I’m going to execute well. I’m going to make a five-million dollars a year business, that is what I want, I’m happy with that. Or, no, no, no, I want the hundred-million-dollar business and I want there to be more competition and I’m happy to go against that competition, whatever, and execute there.”
I think both can be successful. It’s kind of a non-answer but both can be successful depending on what you want. But you don’t have to go after the big market. You just have to do well in whatever you are going after.
Nowadays, because everything is global, every market is big enough to have a great life. If you’re successful in software now, it almost doesn’t matter the size of the market because every market is big enough for you to have a great life.
Courtland Allen:
How important do you think it is to be early to the market and be one of the first players doing the particular thing that you are doing?
Aleem Mawani:
I don’t think it’s that important. If another CRM came along that was in Gmail, I think they would do great. Because the markets are just so big now. There can be multiple players and you can just carve your niche infinitely narrow to do so well in that niche.
Courtland Allen:
Gmail is like 20-30% of the email market?
Aleem Mawani:
Yeah, a billion and a half users.
Courtland Allen:
A billion and a half users—nuts! And like Streak certainly doesn’t have a billion and a half users. A lot of space there.
Aleem Mawani:
Right, nor would we want it.
Courtland Allen:
What do you think of this sort of new mantra of building an audience before you start a business? Back in the day everyone just kind of leapt in and created stuff. Nowadays, a lot of people, even developers are saying, “I’m not going to code anything. I’m going to write, or I’m going to teach, or I’m going to build up a Twitter following or build up an email list. Once I have an audience of people, I’m gonna then figure out what I’m gonna launch.”
Aleem Mawani:
I think it’s great that there is another new distribution channel that exists that didn’t exist before. It’s always been hard to get attention. Right, like, that’s never going to change. It’s never going to change that you need to occupy some percentage of a person’s attention for them to care about you.
And how you get that attention is, there are crowded areas and so it’s hard to get people’s attention and there are less crowded areas. This is a new area. It will get crowded. This community-building approach will get crowded.
It’s a nice arbitrage right now, but it will get crowded. Because eventually, how many communities can you really be a part of? How many podcasts can you really listen to?
There’s a few podcasts that I listen to that I really respect the person that’s doing it and I want to listen to all their stuff. But how many could I possibly listen to? Maybe like five of them? Maybe ten?
But it’s going to get crowded eventually where you’re just fighting for attention in community-building. Just like you were fighting for attention in distributing your product.
It’s going to end up being the same thing. So, I think that while there’s an opportunity right now, there’s an arbitrage opportunity, definitely take it. But know that it may disappear.
Courtland Allen:
I actually like the way things are headed where things are getting crowded. Because it’s unfortunate if you are trying to build a billion-dollar unicorn. If it’s going to turn out where there are a million little distributed communities or distributed newsletters and there isn’t one winner who takes the entire market. Well, yeah, that really puts a cap on your ambitions if you want to capture the whole market.
But there are actually like a ton of markets like this that have worked for ages, in fact for the entirety of mankind before there was the internet, where there wasn’t just this one player who dominated the space.
If you wanted to start a school, you’re never like, “My school has to teach every student on earth otherwise my school is a failure.” No, it’s cool if your school has a few thousand students and there’s a million other schools.
I think the same is true if you’re starting one of these more audience-focused aggregators like a newsletter, or podcast, or community. Maybe you only have a thousand people or a hundred people and that is good enough for you to make a living on. If you can do that, that’s great. And if it gets super crowded and you don’t get to a million people, that’s fine.
You can take whatever you have and parlay that into some winner-take-all market. Or you can just be happy running your business just the way it is.
Aleem Mawani:
I think that is true, but I wonder how hard it is to build one of these communities. We’re basically saying, build a niche community of people that really enjoy your writing and then figure out what product they want and then build that thing.
That makes sense but isn’t that just shifting the problem from: build something the users want to, write something users want. And then build something users want. Like it seems just the same.
Courtland Allen:
That is exactly what it is doing. It’s equally as hard in terms of the challenge that is posed to you. I think the actual execution of it is slightly easier just because your feedback loops for writing and talking are insanely tight.
You can write a blog post in a day. I just talked to Alex Wilhelm who works at TechCrunch and when I interviewed him, he’d written seven articles in the past 24 hours. That guy just has an insane feedback loop where he’s like, “Oh, this is really catching on. I wrote about no-code, everyone really loves this.”
Whereas if you are coding something you can talk to users etc., etc., and it takes a while. So, I think you are completely right. We’ve just shifted the burden and you still have to go through the exact same process but it’s a little bit of a faster process to go through, luckily.
Aleem Mawani:
OK, so maybe that’s a faster way to find your users than building a product as a way to find your users.
Courtland Allen:
I think so. But anyway, obviously the route that you took has worked out spectacularly well for you. I’ve been putting out some polls on Twitter and I think it’s the route that most software engineers want to take. They want to build a SaaS company.
Aleem Mawani:
Yeah, and I don’t know if what we did would have worked today. And conversely, what works today wasn’t available back then.
Courtland Allen:
What would you say is like the biggest lesson that you’ve learned from what you’ve done than an early stage or aspiring founder could really take away?
Aleem Mawani:
It kind of goes back to what we talked about at the beginning but it’s important to understand if you are trying to build a big company it’s going to take a long time. No matter what route you take. You can do the VC back route, or you can do the growing comfortably route and become huge that way.
Both routes take a long time. It’s kind of like advice that has been hammered home but you kind of have to figure out if you’re going to enjoy doing to do this thing for many years? That sounds like an impossibly high bar, but it’s not as bad as people think because you have to remember that as your role as a founder, you get to change what you work on.
In the beginning I build our back end. I build our IOS app then I started to do a lot of design, now I do more management, more product development. And so like, you get to change what you work on, but the great thing is you get to decide what you are working on.
It’s a little bit easier than, “Oh, you’re building a tool for lawn care professionals.” You don’t have to love and want to live and breathe lawn care professionals for the next decade, that’s not the idea.
It’s that you have to enjoy the day-to-day work that you could be doing. Maybe in the beginning that is engineering, later it may be sales, later it may be design or whatever. You just have to remember in the back of your mind that, like, that you have to keep yourself going. It’s a marathon. You have to keep yourself going for a long time and so like use all the tricks you can to make stuff interesting for you.
Courtland Allen:
That’s the best part about being a founder. You have the freedom to keep things interesting and to change that whenever you want to.
Aleem Mawani:
Right.
Courtland Allen:
Aleem, thanks for the time for coming on the Indie Hackers podcast and sharing your story and your knowledge.
Aleem Mawani:
Thank you for having me.
Courtland Allen:
Anytime. Can you let listeners know where they can go to find out more about what you’re up to with Streak?
Aleem Mawani:
Yeah, just Streak.com. S-T-R-E-A-K and for the founders listening, we built it for ourselves and for the founder use case. Founders have to do a lot of stuff like sales, hiring, fundraising. It’s the perfect tool to do all that stuff in your email.
Courtland Allen:
It’s super under-rated to get to get a ton of leverage from a tool that could just make you move so much faster. Especially if you’re an early-stage founder and you’re trying not to waste a bunch of time.
Aleem Mawani:
Right. Or sign up for a bunch of things.
Courtland Allen:
Yeah, exactly. All right, Aleem, thanks again.
Aleem Mawani:
All right. Thank you so much.
Courtland Allen:
Listeners, if you enjoyed this episode and you want an easy way to support the podcast, you should leave a review for us on iTunes or Apple Podcasts.
Probably the fast way to get there if you’re on a Mac is to visit IndieHackers.com/reviews. I really appreciate your support and I read pretty much all the reviews you leave over there. Thank you so much for listening and as always, I will see you next time.
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Great show, you guys. Good to hear 2 ex YC people from last decade having a candid conversation in 2020. You guys are like old timers now. ;)
Good insights. I like the point of no-code / low-code bring perfect for internal tools / corporate intrapreneurs.
PS: I used to run Streak in like 2012. :)
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Haha, your approach (at around 15:30) for coming up with ideas is priceless: start building anything (literally anything), then you'd come across tools that you want to use and would have to pay for, and then start building one of THOSE.
I actually did the exact same thing while building a web scraping service (https://datagrab.io) and also built out an email marketing automation tool. However, if getting traction for one product is hard, working on multiple products simultaneously seems almost impossible to me. So I've put this email marketing tool on a pause for now and I'm focusing on the scraper. -
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