Ep. 342: On this episode of the SaaStr podcast, our CEO, Jason Lemkin, chats with Zapier CEO, Wade Foster, on Distributed Teams and Building a Cloud Product. Zapier is a global remote company that allows end-users to integrate the web applications they use. Although Zapier is based in Sunnyvale, California, it employs a workforce of 250 employees located around the United States and in 23 other countries.
This interview was recorded in February 2020.
This podcast is sponsored by Guru.
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Below, we’ve shared the transcript of Jason’s interview with Wade.
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Announcer: Up today, Zapier CEO, Wade Foster.
Jason Lemkin: All right. You want to hit a few of the things that we wanted to chat about on this list?
Wade Foster: Sure, let’s do it.
Jason Lemkin: First of all, just because it’s fun… Well, actually, before we get there, does everyone get Zapier pronounced right? What are the odds that folks get it pronounced right?
Wade Foster: I think it probably is like 40/60 right to wrong.
Jason Lemkin: [inaudible 00:00:01:04]. Do you roll either way?
Wade Foster: I roll either way because… So here’s what I like to tell myself. This is how I sleep at night. It’s like a gif/jif thing. So there’s an internet controversy, people like a controversy and it creates word of mouth. That’s what I tell myself to sleep at night.
Jason Lemkin: Because I think the zap is a hard consonant and it’s hard to say it.
Wade Foster: Yeah.
Jason Lemkin: It’s hard to say, isn’t it?
Wade Foster: Yeah. But you want to zap stuff. That’s what you’re trying to do. You’re trying to zap things. I don’t know, so is Zapier. But when you can’t afford domain names in 2011 because they’re all taken, you get the one with one P because that’s what’s available.
Jason Lemkin: [inaudible]
Wade Foster: And it has API in the name so it’s kind of clever.
Jason Lemkin: I didn’t actually know that until the last time we met, that it had API in the name.
Wade Foster: Yeah. It turns out cleverness is not a great marketing strategy.
Jason Lemkin: Like the arrow in the FedEx logo that you don’t know until someone… And then you’re like, “Oh my God, there’s an arrow in there.”
Wade Foster: You can’t unsee it. Or the A to Z in Amazon, right?
Jason Lemkin: I guess if it was a little Z, big API, it wouldn’t have been hip, but you-
Wade Foster: So we did do that. The original logo has API in gray.
Jason Lemkin: I see.
Wade Foster: It’s not super hip, but whatever.
Jason Lemkin: All right. So for folks that don’t know the company, I don’t want to go back and talk about the early days when you went through Y Combinator, that’s all fun. I want to talk about forward looking stuff. But give us a rough sense, where are you at today? How big are you? You’ve talked a little bit about revenues, how many employees? What do you want to accomplish maybe by the end of the year?
Wade Foster: Sure. Zapier, 300 employees, global, fully distributed team. Well over 100,000 customers, last revenue number we talked about was early last year, 50 million ARR.
Jason Lemkin: So more than that today.
Wade Foster: Yeah, more than that today. What do we want to accomplish this year? I think a big part of this, we’ve got the company’s product, we want to do a better job of servicing these mid market users, make sure that we’re there for them. We want to do a much better job of making automation easier. I think there’s an opportunity for us to really make setting this stuff up super simple.
Wade Foster: It used to be engineers did all this work. It used to be that you had IT staff that did all this. Now with Zapier, anyone can do it. But it’s still a little nerdy, it’s still a little technical. And so I think there’s more we can do to abstract away parts of that so you’re run of the mill sales rep or your run of the mill recruiter or whoever can just sort of step in and be like, “Automation is part of my tool set. It’s how I do my job. It’s how I’m more effective at my work.” So there’s a whole bunch of design and simplification and product extensions that we have in mind to really make that first run experience really good.
Jason Lemkin: Essentially, when I think about folks that I work with that use Zapier, I would say, for example, tech focused marketers, folks that are next generation. They love the app, right?
Wade Foster: Yeah. They’re all in.
Jason Lemkin: They’re like, “I can’t connect my dated marketing automation app to my janky CRM to my website,” because we are all using hundreds of apps, right?
Wade Foster: Yeah.
Jason Lemkin: So forget about even a lay engineer, I think a technical marketer can use the product and love it, right?
Wade Foster: Yeah.
Jason Lemkin: But what’s the next frontier beyond that? I don’t know what the term is, but it’s like web savvy. You got to be web savvy, right?
Wade Foster: Yeah.
Jason Lemkin: Do you think someone that isn’t web savvy will be able to use the product as effectively as someone that is by the end of the year?
Wade Foster: I mean, I hope so. That’s the goal.
Jason Lemkin: What do you need to do that? We’re running out of time to talk about no code maybe and all this stuff, but that’s an element of getting beyond the web savvy, right?
Wade Foster: Yeah.
Jason Lemkin: Just getting to a level with web aware people. How can a web aware people use your application, right?
Wade Foster: Yeah. I think a big part of it is we get simpler, we get easier, so we find better entry points into the product that as you’re going about just using these tools, you’re prompted to set up zaps and there’s very little configuration to go on.
Wade Foster: I still remember my experience using Squarespace in the early days. When you had to configure the DNS settings and stuff like that, Squarespace has always been easy, but it used to be like you have the tutorial open on one side and then you were going through their setup flow in the other and you’re copying and pasting links into it. It was easy in the fact that it was straight forward, but there was just a lot you had to do.
Wade Foster: Now, when you go in to set up a Squarespace site, you buy the domain and then they have a little spinner and they’re like, “Ta-da. Your site’s ready for you.”
Jason Lemkin: That’s what you want. It integrates with Google domains, right?
Wade Foster: Totally.
Jason Lemkin: And we want that, right? Even I get a headache. I screw it up, I can’t remember what my C name is or my whatever it is and I want to just jump off the roof.
Wade Foster: Yeah. And it’s not that it’s hard, it’s just that there’s a lot of steps and you’re copying and pasting a bunch. That’s our job is to get rid of all that stuff where you don’t care about that. You just want it to work for you and the worst thing is [crosstalk 00:05:57].
Jason Lemkin: And what’s the single hardest part of that that you want to conquer this year? Do you have a sense of what [crosstalk 00:06:03]?
Wade Foster: Yeah, a big part of it is you’re mapping data from different services, one service to another and so how do you extract that stuff away? How do you just say-
Jason Lemkin: It’s always been wrong. It’s always, always the corner in the edge cases break, right?
Wade Foster: Yeah.
Jason Lemkin: Fields don’t match, there’s more than 256 characters in the wrong field, the data doesn’t flow the right way. How do you-
Wade Foster: Then you get an error message that a user looks at and they’re like, “What the heck is that?”
Jason Lemkin: You do this at scale.
Wade Foster: Yeah. So I mean, the big part of it is you just get a lot of data and you start to know and you can match on other users use cases and say, “Hey, you’re trying to do this stuff. We’re going to take those configurations and we’re going to make those default configurations for other folks,” so that out of the box it sort of works.
Jason Lemkin: Yep. And last one because I want to tie this into a question, but do you think… I used to hate this term persona, but I’ve evolved. I do think it summarizes a lot of things as organization… I used to hate alignment as a term, now I like it. But as you look to that future, is there different persona that will use the product?
Wade Foster: I definitely think so. Right now-
Jason Lemkin: Do you have a name for this person?
Wade Foster: We don’t have a name yet.
Jason Lemkin: [crosstalk 00:07:07].
Wade Foster: We’re going through all of our segmentation. Yeah. We’re doing all the segmentation work and things like that right now. But I think you hit it on the head where web savvy, tech forward, technology oriented companies love Zapier today. Now it’s about how do you get it in companies that maybe there’s a web savvy person in the company, but maybe the company isn’t tech forward. So how do you enable them to implement it inside their organizations?
Wade Foster: And then how do you go the next step further where it’s like, “I’m just an organization and technology is sort of being foisted upon me and I just got to catch up.” The Cloud is everywhere. Well, how do you make sure you get that sort of last wave of folks on board with it?
Wade Foster: As companies age and grow, you’re trying to get as far through that thing as you possibly can. That’s how you get as much market penetration as you want.
Jason Lemkin: This next question I have, it’s early in the year and you’re at a very interesting point because you’re trying to connect whatever we call them, we can call them… How many apps do you connect? A thousand apps? Five thousand? Five million?
Wade Foster: Yeah, We’re 1,600 right now.
Jason Lemkin: Okay. But there’s a lot of Clouds in those apps that you’re connecting. And you’re trying to do it in a much more effortless way than enterprise products. You’re forced to think about the future of the Cloud in a way different than the Davos sound bites. What do you see down the pipe that other folks don’t see because you’re in this intersection? What do you see happening, not this year, but in three to four years that maybe even could disrupt Zapier, right? That even could change the ecosystem. What are you worried about or excited about that maybe other people don’t see [inaudible 00:08:44]?
Wade Foster: I think there’s just an explosion in the number of tools that people use. We all use the big stuff, right? We all use Slack, we all use Zoom, we all use G Suite. We all use that stuff, but every org has a slice of tools that… You could probably tell me right now a half a dozen tools where I’d be like, “What is that? How does it work? I’m not sure how it is.”
Jason Lemkin: And I rely on them.
Wade Foster: Yeah, and you rely on it. And it’s probably a 10 million ARR business and it’s a really solid business. So I think there is going to be just a… It wouldn’t surprise me if the new sort of family business is a software shop, a SaaS business that does like 10 million in ARR, or a million in ARR, somewhere in between there and it’s pretty successful. Yeah, it’s not a venture scale business and no one ever talks about these types of businesses, but they’re everywhere right now.
Jason Lemkin: They are.
Wade Foster: If you group them all together, there’s pretty significant adoption across all those tools and they need them to work with all this other stuff that they have. I think we like to think of tech as, hey, the Faang companies and these big Saas companies and whatnot, but there’s a lot of tech that’s not that.
Jason Lemkin: Yeah. And what do you think at the other end of the spectrum of things like UiPath and Automation Anywhere that are… Or even Plaid from the other day? I know they sound like a bunch of apps, but they’re taking another approach. They’re bypassing APIs, they’re using next generation scraping, flat files and whatever it takes to make anything work. In some ways it’s opposite end of what you’re doing-
Wade Foster: It really is.
Jason Lemkin: In some ways you’re trying to solve similar problems though, aren’t you?
Wade Foster: Those are important problems to solve. I think they’re transitionary problems is how I would talk about them where they’re big business-
Jason Lemkin: In like 2040?
Wade Foster: I mean, perhaps, yeah. Enterprise moves slow, right? But I think we all know that APIs are a better way to consume data. This is the ideal state. Let’s use files as an example. Drive was into the market before Dropbox was. But Drive said, “It’s all about the Cloud, it’s all about docs and sheets and stuff like that.” They didn’t think about file formats and whatnot. Dropbox was like, “We’re just going to start by syncing your file formats. We’re going to deal with all this crufty, old school, desktop related stuff and do it really well.”
Wade Foster: And in some ways, that’s sort of transitionary. We are all now on the Cloud. Outside of photos and maybe videos, we don’t actually interact with files all that much anymore. So in some respects, Dropbox was focused on a transitionary thing, but they use that to build a billion dollar business out of it. Now they’ve got to figure out how do they exist in a world where most everything is Cloud? I suspect they’ll figure it out.
Wade Foster: But it’s the same thing, I think, with when you look at UiPath and Automation Anywhere, is they’re tackling this thing that is a massive problem, but all those things are somewhat fragile. Businesses don’t want it to operate like that for forever. So 2040, what’s the better way to do this stuff?
Jason Lemkin: Yeah. I want to throw out one thought that you kind of tease at and then I want to hit the next one on our list. But we launched this product called SaaStr University just a couple of days ago to take all of our 6,000 articles and blog posts and organize it for the next generation, and we already have almost 4,000 founders on it. It’s pretty cool.
Jason Lemkin: I didn’t have time. Over the holidays I had extra time and I picked a platform called Mighty Networks. It’s very limited and it’s very slick because it’s like a social network with learning attached and it only has three integrations in it. It has Google Analytics, it has something I forget, and it has Zapier to solve all the things that it doesn’t integrate with. Now that’s profound if you think about it. There’s a bunch of things to think about. That’s a brand that you have, it’s a product. And you know that I’ve gotten passionate about that. Once you have a brand and you’re past that point, how are you thinking about leaning in so that everyone will build… There’s only three products and you probably never even heard of it until I brought it up. You’re the only one of the three and they’re not going to probably put the effort in… Whoever your number two competitor is, I don’t know who it is. They’re not going to do the effort.
Wade Foster: Not for Mighty Networks.
Jason Lemkin: They’re not going to do it, right?
Wade Foster: Mm-hmm (affirmative).
Jason Lemkin: Because they got too much stuff else to do, right?
Wade Foster: Yeah.
Jason Lemkin: We already used it to hook up to Marketo and some other things. Are you leaning in on that as you’re kind of thinking about [inaudible 00:13:16] beyond revenue, what are you doing to build on that and not break that relationship and build on your brand?
Wade Foster: Yeah. I mean, at the end of the day, for us, we’re about connecting the tools you use. And so the tools you use are so critical for us where we are going to make sure that we have every app on the platform, period. Everything is going to be supported by Zapier and the stuff that everyone uses is going to be supported super well. We’re going to make sure that the G Suites, the Slacks, the stuff everyone uses is going to be really good. Really, really good.
Jason Lemkin: You’ll do that no matter what it takes.
Wade Foster: We’ll do that no matter what it takes.
Jason Lemkin: You got to have a Slack team internally, don’t you? To make sure that that-
Wade Foster: Yeah. I mean, we have people dedicated to the top in apps on the platform.
Jason Lemkin: Do you get early access to their platform changes and know ahead of time?
Wade Foster: Oh, yeah. We work with them to… And in fact, oftentimes we try and build stuff together for that stuff. So we’re the guinea pigs on new, weird things.
Jason Lemkin: With those ones you’ve got deep relationships, right?
Wade Foster: Yeah.
Jason Lemkin: You’re given access to their staging servers and preview releases and all that sort of stuff.
Wade Foster: Yeah. And then for the long tail of folks, you’re trying to provide tooling, you’re trying to export the things you’re learning with your top in apps and make it really easy for them to self serve, to build similar type experiences to what you’re trying to do on this more experimental big side of things.
Jason Lemkin: But Mighty Networks, you’re not making any money off them directly, right? Maybe you are, maybe, but it’s small, right? What are you doing to empower that long tail in 2020?
Wade Foster: Yeah, you just give them tools. You give them the things so they can solve the problems themselves. These orgs, they need it. Their customers are begging for integrations. And so Zapier is the easiest thing they can do to be able to say-
Jason Lemkin: That’s why it’s one of the three. It’s the easiest thing they can do, right?
Wade Foster: Yeah, it literally is the easiest, fastest thing they can do. And so our job is, if it’s not the easiest, fastest thing that we can do, we’re in trouble. So we need to continue to be the easiest, fastest thing they can do to say yes to all these customer feature requests.
Jason Lemkin: There’s just one thing I want to go back in time on because when we were at the Inbound Conference we chatted about it, which was the early days when you had to build the integrations yourself versus crossed over, right? It never fully changes because you’re working with your top customers team. So you’re still building these [crosstalk 00:15:30].
Wade Foster: Yeah, we still build stuff ourselves.
Jason Lemkin: Maybe power dynamics is the wrong term, but when did the relationships change? How should you be aware of it? I see a lot of folks that… Especially folks that have good but not great engineering teams, they want the partners to do all the work.
Wade Foster: Yeah.
Jason Lemkin: It’s hard enough just to build an API. If you have no experience, it’s not easy. It’s not easy to build an API and you have four engineers and some pretty good but not great engineer needs six months to build your API. And then Slack comes in and Slack’s not going to build it.
Wade Foster: No.
Jason Lemkin: So what did you learn and when is it appropriate to ask the partner to do the work instead of you if you want to have a positive ecosystem?
Wade Foster: I think there’s sort of two things. You have to have something that people want at the end of the day. You’re not going to be a platform if people don’t want it. Typically, that means you got a lot of users because that’s what most of us are trying to do. We’re trying to tap into a user base that we feel like [crosstalk 00:16:27]-
Jason Lemkin: You want to pick a top three platforms and build on them, right?
Wade Foster: Yeah. We’re going to build on Slack because everyone uses Slack and so we’ll get all their users. That’s the dream. It doesn’t really play out like that, but that’s the dream.
Wade Foster: There has to be some other reasons. It’s not for access to your customers. What is it that you’re providing them that they’re willing to say, “You know what? We’re going to do a thing that isn’t going to impact our entire customer base.” I remember the moment–we were having this debate very early on, I remember the moment it flipped a switch in our head was when Aaron from Box, he sends us an email at like 2:00 AM on a Saturday and was like, “Why isn’t Box on Zapier?” And the answer was, “Well, we’re three people just going as fast as we can. Of course Box should be on Zapier, we’re just not there yet.”
Wade Foster: But that got us thinking. He sent us an email in the middle of the night, maybe he would put an engineer on it. If he cares enough to do that, maybe he would do that. And so we just emailed him and said, “Hey, would you put an engineer on this if we had a way for you to do it?” And he was like, “Sure.” And so we were like, “Okay.” That’s enough of a signal for us that if we make the tooling good enough, maybe they would go do it.
Wade Foster: I think a lot of us have this dream that’s like everyone’s going to build on us, but basically no evidence that someone would do such a thing. So for me, it’s like you got to have some evidence that someone’s willing to go do that before you go stake the future of your company on this platform vision.
Jason Lemkin: Yep. And Aaron Levie’s story is a good one. And sometimes what happens, too, is you think everyone’s going to build on your API and no one does. But often what happens in the early days is there’s one or two high affinity partners. Sometimes they’re another little company in YC, sometimes they’re a big company. They may not even be huge. They may be one of your 10 million mom and mom companies, but you solve a big arse problem for them so they bring you into every deal overnight. I’ve had a few. Did you have any experience like that where someone needed you?
Wade Foster: We’ve definitely seen it over the years, where Zapier is basically if you don’t use Zapier alongside the tool, the tool itself kind of doesn’t do enough.
Jason Lemkin: Do they literally package you up with their product and pull you into deals?
Wade Foster: They start, yeah, basically. They’re like, “You should just use Zapier.” A company like Clearbit, take that for example. It’s a dev tool. However, a lot of their companies aren’t devs.
Jason Lemkin: Clearbit’s super interesting. It’s a dev tool and a lot of marketers and others want to use it.
Wade Foster: Yeah. And it’s like, okay, if you want to use it but you’re not a dev, how do you do that?
Jason Lemkin: Yes.
Wade Foster: Zapier.
Jason Lemkin: That’s how our marketing team uses it. Exactly. Even though you’re both dev tools in a sense, are you aligned from a go to market perspective? Is it totally incidental? Do you guys know each other? Do you work together?
Wade Foster: We know each other. It’s mostly incidental. We’re not aligned, we don’t have co-selling agreements or anything like that.
Jason Lemkin: Do you have a BD team or a partner team that helps facilitate this stuff?
Wade Foster: Yeah, we do. [crosstalk 00:19:24].
Jason Lemkin: What’s their KPI? Or do they have a goal for 2020 or a job?
Wade Foster: Yeah, there’s different teams. So we have teams focused on our biggest apps and so that’s a different goal versus teams that are focused on the programs that you put in place of help for the thousand apps and whatnot like that.
Jason Lemkin: Cool. All right. For a couple minutes, before we run out of time, I want to talk about distributed teams, which is your super passion. But I want to dig in on a few topics that maybe you talk about it a little bit less that we’ve chatted about. The first one is just advice. I mean, first of all, I need your advice. I’m struggling to learn how to do this and you could give me personal advice, which I will be grateful for. But the meta point is, I know your point which is great, which is good counsel, which is go all in early, right?
Wade Foster: Yeah.
Jason Lemkin: The Zapier story is you have the co-founders, your co-founder goes through YCS to go back to the Midwest and you decided you better learn how to do it because you have no choice. It’s a great story. But a lot of us don’t start that way. I invested in another YC company that I love that’s a rocket ship and they’re 10 dudes, all guys, which is bad in 2020, all working in one room that have coded together for years. And then they just broke it all up and said, “We’re going 100% distributed.”
Jason Lemkin: That’s such a big culture change from [inaudible 00:20:43] to… What’s your advice if you don’t start there? What’s your advice to folks you’ve met that are at [crosstalk 00:20:50] a hundred and it’s not that I want to have a remote, an extra office, because that’s not the same.
Wade Foster: No, it’s not.
Jason Lemkin: It’s not even remotely the same, is it?
Wade Foster: So I’ve given this advice to a few folks and a few folks have followed up on it and it seems to work. If you follow it through, it seems to work. Now, like anything, you have to commit to it, which is, take, let’s call it two weeks. I think two weeks is long enough, but you might need to do longer. It’s enough time where you basically have to deal with it where you can’t say, “I’m going to go back to the office,” For two weeks no one can come to the office. Doors are locked, you can’t show up. It has to be long enough where your default response is not like, “Well, when we’re in the office again, let’s make sure to discuss this.” Or, “When we’re in the office again, let’s make sure to figure this out.” So it has to be long enough.
Wade Foster: It doesn’t have to be the whole company, but just take a team first. So if you have a small team, that team, lock the doors on them, everyone’s from home, even the boss. You have to just do it and figure out, we have a core problem to deal with and we just don’t have any of the tooling, any of the documentation, any of the infrastructure set up to deal with it. And so you’ll just start realizing, okay, we got to start putting in a little bit of a process for this, a little bit of a discipline around this type of thing.
Wade Foster: Then even if you decide, “Hey, we’re not going to be fully remote. We’re actually going to go back into the office,” just the exercise of having done that will make you a better run company. You still decide to run out of an office, you’ll get to bring some good habits from that exercise.
Jason Lemkin: I love that idea. I’m going to think about that. Based on those learnings and your own, what about folks who they really enjoy being in the office if you have an office? It’s their time away, it’s their third place and they don’t want to work, I mean, I’m looking at you on Zoom in your home office, which I’ve seen on a few videos. But not everyone has a home office. Maybe there’s four of us in an apartment in San Francisco and we don’t even want to go to WeWork, right?
Wade Foster: Yeah.
Jason Lemkin: Maybe that’s the answer. But what do you do for folks that it’s not just collaborating, they literally want a third place.
Wade Foster: Yeah.
Jason Lemkin: Because you’ve got 500 employees, right?
Wade Foster: Yeah.
Jason Lemkin: So you have to have thought about this.
Wade Foster: Yeah. We’ve got 300. So we are at a point now where… So first thing, there’s a certain amount of this where if your social life comes from the office, if that’s how you get your connection to your community, a fully distributed team, it might just be tough for you. It just could be a thing of like, “Hey, you should opt out of that.” That said, some of these companies are getting big enough that we’re starting to solve some of these problems too.
Wade Foster: At Zapier, certain cities have a pretty high number of employees. I think Portland has like 25 people for us. And there’s a whole social scene around work for folks in Portland, where we don’t have an office for them, but a person on that team schedules coffee shop meet ups and happy hours and come over to our family’s house for dinner on a Friday night events for the team. Where you start to build camaraderie and a real sense of community around the people you work with.
Wade Foster: And so I think you try and just find little nuggets like that, where you can provide some of that. It’s never going to be the same thing as showing up in an office 40 hours a week. But I don’t know that you need that. I don’t know that everyone wants the full thing, they just want a little bit. They don’t want to feel like they’re on an island by themselves.
Jason Lemkin: Yeah. All right, man. Well, this was great. Thanks for being part of the SaaStr community. I think you were at SaaStr like 2016 or 2017 or something.
Wade Foster: Yeah. It was a long time. If I remember it was like sub-1000 people was the first one I was at or something like that.
Jason Lemkin: Yeah. You’re coming back this year which is great. You’ve done the podcast before. So thanks for everything and thanks for teaching us. I mean, I know doing this kind of stuff is good, but I think really we are learning about distributed teams and no code from you in a big way and I’m personally learning. So thanks for everything that you do.
Wade Foster: Yeah. I appreciate it and thanks to you, as well. I think we’re all learning from the SaaStr community together.
Jason Lemkin: The Cloud keeps evolving, we’re all learning, right?
Wade Foster: Yep. That is the truth.
Jason Lemkin: All right, man. I’ll see you in San Jose and we’ll chat in a little bit.
Wade Foster: Awesome. Thanks, Jason.
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Published on June 12, 2020