Crossing 8 figures in ARR by operating a funded YC company like a bootstrapped product

Aleem Mawani's business, Streak, was a YC product before it was cool. Halfway through the program, he pivoted and got funded. And ten years later, it's doing eight figures per year.

Here's Aleem on how he did it. 👇

Pivoting an idea

We started like a lot of first-time founders — working on a product that wasn’t working.

We were a two-person founding team, so we were doing sales, fundraising, and hiring ourselves. We needed something to keep track of it all. We tried everything from spreadsheets to Salesforce. But the products were either too slow/bloated or required too much work to keep in sync with all the emails in our inboxes. Usually both.

When we decided to pivot to a new product and look for new ideas, Paul Graham gave us two great pieces of advice:

1. “Don’t be constrained by your old crappy idea.” Don’t try to reuse old code or repurpose your product or even keep your existing customers. Start fresh.

2. “Be your own customer.” That way, you can iterate faster — you know what product would solve your own problems.

That made us go after the CRM market. At first, we thought we would just build a CRM for sales. But, luckily, Paul Graham had also recently surveyed a bunch of YC companies and asked them what they needed to help run their companies. A crazy stat was that approximately one-third of them needed help managing their email for a bunch of different processes — sales, hiring, fundraising, partnerships, etc.

That's when we realized what the real potential of Streak was — helping small, high-performing teams organize their workflows that involved people and companies.

An 8-figure product

Streak is the only product I focus on now — it’s a CRM built into Gmail. It’s a superpower for small, nimble teams. Founders especially love the product.

We’ve always had two price points, one for “serious” teams (even just 2 or 3 people) and one for solo users. We learned quickly that being the low-cost option is brutal. It's hard to grow and it attracts the worst customers who are likely to churn.

No matter how low we priced the solo option, it was always too expensive for them, these customers always churned the most, and they had the biggest support burden. Trying to make money from those users was a mistake, we should have just had a limited free option for solo users from the very beginning or a generous trial followed by full price.

These days, we use the typical per-seat subscription model. The theory being that this is a proxy for the customers who get the most value out of our product should pay the most.

Streak is very profitable and does eight figures of ARR. 

Raising while building

We had two core insights when we started:

1. All these processes happened in a team's individual inboxes. That’s where all the data was and it needed to be shared team wide.

2. To actually get people to use a CRM, you need to put it where they work — their inbox. 

We built an MVP in two weeks. It was jank. But we could use it ourselves.

We were in the last few weeks of YC so we were starting to talk to investors about fundraising. We raised a round with just screenshots and our prototype.

But more importantly, going through a fundraising process was a way to perfect the product. We just kept making the product better and better because we needed those features to raise money. Talk about a crazy-tight feedback loop — every feature we built helped us immediately close more investment dollars. It was do or die.

We ended up raising a very small round in a couple of weeks and putting our heads down for another six months to keep building and shipping to other YC companies. Then, we publicly launched six months later. We were then able to raise a $2M seed round because of all the progress we'd made.

I had some savings because I created a meme app when the iOS app store first came, but having that initial money from YC and the small seed round was what let us focus heads down on building for the first six months.

It also gave us our initial customer base, other founders from our batch and companies our investors introduced us to. 

Growing pains

Our initial customers were other founders, but once we launched publicly, we started attracting another type of customer — small teams at larger companies.

Our product development process had to change along with the customers changing. Before, we’d just noticed stuff we needed to build for ourselves or from another founder sending us a quick email that we understood intuitively. But once we started getting bigger companies using our product, we had to do a lot more customer interviews.

We’d talk to multiple people on their teams, trying to understand each of their roles and what was important to them.

Technical challenges

On the backend, we first optimized for being able to build features fast and operate with a very small team so we chose to use serverless (AppEngine).

Once we started scaling our usage, we had to optimize for costs and margin, so we eventually moved off of it. But it served us for a surprisingly long time!

On the frontend, we just had one developer and went fast by just using jQuery. Again, it got us surprisingly far. It became awful to maintain as we hired more frontend developers, though, so we slowly migrated to React, which is definitely better for a team.

The hardest technical challenge we face is deeply integrating into Gmail, so that it feels like a seamless experience and not just something that was bolted on. This meant reverse engineering the entire Gmail UI so we could inject ourselves in all the places — left nav, autocomplete search, the threadlist, sidebar, and the compose window.

A close runner-up is understanding the emails in a particular inbox and unifying them across an entire team — if one person marks an email or person as relevant to a sales process, then that email or person should show up as part of the sales process for everyone. Trickier than it sounds.

Revenue growth

In the past, we’ve tried to measure the impact every single one of our features had so that we could better prioritize future features. This was a futile effort. There are just way too many confounding variables. In the end, the only real correlation we found was that we grew fastest whenever:

1. We shipped what customers most wanted

2. We shipped quickly, building momentum

3. We offered super fast customer support (i.e. under 10 mins)

Being in the SMB space, the key determinant of our growth isn’t the amount of new customers we sign up but rather our net churn rate. As you scale a SaaS business, your net churn is a % of your current revenue, so even if you’re growing, you’re losing more and more to churn in absolute dollars. It becomes harder and harder to overcome that with new customers.

So we focus almost everything we do on improving our net churn. That means:

1. Making the product better for our power users so they don’t have to move to another CRM as they scale

2. Improving the onboarding experience for new customers to make sure they build a habit of using our product

3. Using a customer success process to make sure customers get a lot of value out of us and don’t consider leaving

User growth

We’ve gone through four phases of attracting users that have been responsible for our growth. 

Phase 1 — Network

First, we tried to get every founder we knew to use the product. Our YC batchmates, friends of friends, startups in our investors' portfolios, etc. This was great but not really scalable and we ran out of companies to pitch. They also had a pretty high mortality rate.

Phase 2 — Marketplace

Our next phase of growth came from finding an unfair distribution channel. In our case, it was the Chrome Webstore.

Chrome had recently launched this store as the way that extensions got distributed. The amazing thing was that they put a link to this store on the New Tab page by default in every Chrome browser. That meant hundreds of millions of users saw the link to the store every time they opened a new tab. At the time, there were very, very few serious Chrome extensions so we got a lot of attention and the Chrome team even featured us.

At one point, 90% of our new users came from people randomly discovering us there. The users weren’t all great but there were a lot. Eventually, this arbitrage closed as more and more companies started adding listings in the Chrome Webstore.

Phase 3 — Word of mouth

By this point, we had a healthy user base of customers paying us and loving the product. So the next wave of users came from pure word of mouth — users recommending others. We were in this phase for a long time. Our growth was 100% correlated to our improvements in the product.

This was good and bad. We tried other marketing channels but nothing worked. Word of mouth was strong enough that it sustained growth for a while, but eventually, our userbase was large enough that natural churn was eating into this more and more. 

Phase 4 — Content

That leads us to where we are today — we’re finally seeing signs of another channel working: Content.

We worked hard at this, writing a lot of content. And we learned the hard way that there's a difference between attracting page views and attracting customers.

It’s a long game, but our investments are starting to pay off. Over the last 12 months, the number of users being driven to our site by content each month has gone up by about 2.5x — 267,064 in October.

Experimenting

We’re also starting to work on some interesting outbound experiments that may work, even in the low-ACV customers that we have.

What doesn't work

Two things have never worked for us: paid ads and splashy launches.

We think the paid marketing channels in our industry are too saturated to get enough clicks. As for splashy launches, they never seem to attract real users. Just a spike in people window shopping. 

The plan is to continue working on new types of content that are actually useful for our customers, and hoping that attracts people like them. But it's a long-term investment.

Read these handbooks

There are two startup handbooks that I swear by:

1. The ShapeUp method by 37Signals. This outlines a product development process that keeps momentum high and minimizes waste. The key insight is that you should make the timeframe of a project immutable, and make the scope mutable instead of the other way around. A quick read, and you can pick and choose the pieces that best fit your style.

2. The High Growth Handbook by Elad Gil. Regardless of whether you’re starting a “venture-scale” business or a profitable bootstrapped company, the value-per-word in this book is unmatched. It tours you through all the functions of a business (hiring, fundraising, strategy, operations, management, company systems, etc.) and gives founders a solid foundation in each. All highly applicable techniques to your day-to-day, and perfect to reference often.

Don't lose your momentum

The biggest challenge has been maintaining a feeling of momentum over a decade. Momentum is everything in a business — it helps with morale, hiring, customer trust, and even prevents burnout.

Once you’ve lost momentum, it's really, really hard to build it up again. We’ve lost it once and it flatlined growth for 12 months before we could recover that feeling. A big part of my job is designing a system (the company) that makes everyone feel a sense of momentum. 

One example is that we don’t allow “mega” projects anymore. We don’t build any features that take longer than six weeks. Something has to ship within 6 weeks. So we break things down into small shippable pieces. Even if it would be more efficient to do it as one big project, that crushes our momentum so we don’t do it. And usually, it's actually less efficient to do a big project because without it actually being used, the likelihood of it being correct goes down significantly as the project takes longer. 

When you hire, do it async

When it was time to hire, one thing really helped: making the process mostly asynchronous and project-based.

We require candidates to submit a Loom video about themselves and why they’d be a good fit for the role. Most of the interview process is a paid take-home project.

This simultaneously helps you get through more top-of-funnel candidates while also weeding out a bunch of candidates who aren’t the right fit.

The era of MVPs is over

When you're just starting out, you don’t have many resources, so it’s really easy to get unfocused and make little progress. You really just have to focus on two things:

1. How am I going to get my next customer?

2. How am I going to wow them?

The mistake I see most often is not making an amazing product. I think the era of MVPs that you throw at the wall is kind of over. The competitive bar and customer expectations are just too high for that. Your product really has to be world-class at something. 

What's next?

We’ve intentionally built a business that is highly profitable with minimal funding. We never really resonated with the growth at-all-cost mentality, as we want to be in control of our destiny and that requires profitability.

This has had so many benefits. We can take a long-term view and we can attract talent that wants to work in a small company but not have to worry about the company going under in nine months.

This doesn’t mean we aren’t ambitious, though. Our goal at Streak is to get to $50M ARR with <50 employees. Why cap the team size? Because it just makes for a way better place to work. More craftspeople. Fewer managers. Each person has a high impact. And you know everyone's name. Those are the things that I, personally, care about.

Really, the only way to accomplish this goal is to become amazing at hiring super senior and talented people who resonate with this way of building a company. It does mean we have less room (but not none) for junior mentorship and that is a tradeoff we’re making. 

You can follow along on Twitter and LinkedIn. And check out Streak.