Episode 603 | Bootstrapping HotJar to $40M ARR Using D2C Marketing

Startups For the Rest of Us

Rob Walling

Management, Entrepreneurship, Business, Marketing

4.8 • 792 Ratings

🗓️ 17 May 2022

⏱️ 44 minutes

🔗️ Recording | iTunes | RSS

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Summary

In episode 603, Rob Walling chats with David Darmanin, one of the founders of Hotjar. Hotjar was bootstrapped to $40 million ARR with a fully distributed team of 170 employees. David and his cofounders sold the company for a 9-figure exit in 2021. From their incredible launch story and their unique DTC approach to sales and marketing in a B2B SaaS business to David’s mental models and the thought process behind selling the business, there is no shortage of key insights in this episode. Topics we cover: [5:07] How David initially financed building Hotjar [8:11] The biggest difference between Hotjar and its competitors [12:03] The unique approach that David took when launching Hotjar [12:44] Lessons learned from a failed product launch prior to Hotjar [15:01] How they built their initial launch list to 60,000 subscribers [19:32] How to know how much to spend on paid ads [24:53] Why David said it was easy to work 60-80 hour workweeks for the first 6-9 months of Hotjar [27:22] The two key ingredients needed if you want to sell a low-priced SaaS product [30:31] How they tripled their growth from $1M - $3M in the first year [33:26] How their initial launch strategy gave them a major competitive advantage when they started doing content marketing later on [34:03] What led him to sell Hotjar [40:39] How long the exit process took Links from the Show: David Darmanin @DavidDarmanin I Twitter Hotjar Episode 569 I The Life-Changing Decision of When to Sell your Company How a 7-hour workweek led to Anna Maste’s 7-figure sale I They Got Acquired Conversion Rate Experts Delivering Happiness Selling The Invisible The Dip Built to Sell The Great CEO Within Let My People Go Surfing Just Cause If you have questions about starting or scaling a software business that you’d like for us to cover, please

Transcript

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0:00.0	It's another week and another episode of Startups for the rest of us.
0:02.8	This is episode 603.
0:05.1	And in it, I have the most incredible conversation with David Darmine.
0:08.9	He's one of the founders of Hot Jar.
0:10.8	And I had not realized that Hot Jar had been bootstrapped to 40 million in ARR,
0:17.6	170 employees, fully distributed team, and that they had exited for an
0:22.9	obviously incredible sum. At that ARR, it's definitely a, we're looking at a nine figure exit.
0:28.4	But what I hadn't realized is that they had bootstrapped the company, and so much of their
0:32.6	early marketing was D to C. It was direct to consumer approaches with their launch and even with the way they
0:38.6	thought about it in the early days. So I was honestly blown away by David's approach to
0:44.9	entrepreneurship. I'm just so surprised he hasn't been on my radar before as a bootstrapped
0:50.0	SaaS founder who almost immediately struck me as one of us, you know, someone who might listen
0:55.4	to this podcast or someone who should attend a microconf. And after we recorded this episode,
1:01.1	I actually asked him straight up, I was like, you and I need to meet at some point. Would you
1:04.8	come to a microcom if there was one near you? So I think that there is a future with David because
1:10.1	the amount of wisdom he has and his posture of learning.
1:13.8	If he listened through this interview, just all the books he names.
1:16.9	And he just, he wouldn't know a subject so he'd go read all the books on the subject.
1:20.0	And it's books by Seth Godin and a lot of classic books selling the Invisible, a lot of classic books that we talk about in our circles. It was such a good
1:28.8	conversation. I actually let it run long, as you'll notice, by the episode length. I honestly
1:35.0	didn't want it to end. But before we dive into that, I want to jog your memory for episode 569 of
1:40.7	this podcast, which came out last September. It's called The Life-Changing Decision of When to Sell Your Company.
	...

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