Calendly getting to $10M ARR
Respect the competition
It's a company I'm a fan of because of how simple it is, it's staying power despite fancy competition like x.ai, and how focused they remained. Everyone uses it today, they have great reviews on Glassdoor, but what's the backstory, how did it grow and what are the takeaways.
Tope Awotona, when 12, saw his dad get shot in a carjacking in Lagos. He had tried 3 e-commerce companies before he put his entire savings, including 401-K, into Calendly. He hired Railsware to put out V1 since his own experience was in enterprise sales at IBM and EMC as an AE/AM. Atlanta Ventures and OpenView Partners are the only external investors after a frustrating fundraising process, complicated by being a black founder in Atlanta.
He moved to the US in 1996, started Calendly in 2013, which has been profitable since 2016. Pivoted from a pure consumer product to consumer and business. Started charging for the product in Aug 2014.
Even before starting, spent 6 months researching the competition, paying attention to the existing tools on the market. Looked at how many clicks and how many page refreshes. The number of steps a user had to go through to book a meeting, maniacally focused on reducing those steps, eg: detect time zones in a much better and cleaner way for the user.
After hiring Railsware, took 6 months to put out an MVP. BrightBytes is also a customer of Railsware and their customer success people become Calendly's first customers. They talk to people in education, so Calendly now being used for PTA meetings.
Capital efficient growth, ie, little outside capital raised. Made each bootstrap and revenue $ stretch. No advertising or outbound sales team.
Freemium model and in-built virality to create awareness
Bottoms up growth inside companies
Simple, efficient to discover, try and buy
Solves a painpoint whether free or paid
Solves a painpoint whether used alone or in a team
Phase 1: First year, product was 100% free. Learned how users were using the product and as feature requests came in, figured out how to package into a premium plan. Eg: "Calendly is great, we use it with customers, but we'd love if you could remove the branding" -> tested both what the feature should be and the exact price point to see if the combination was compelling enough for users to pay. Today Calendly is $10/user/mo, but in 2014 they tested $5- $10/user/mo to figure out the right price point. This experimentation went 4 months and took them from $0 to $100K ARR.
Felt like the world was going to end when they started charging for the product. Almost gave up. Noisy minority that were disappointed, but a silent majority that went ahead and paid.
Self serve: eg: Automatically sign up by hitting a button and putting in a credit card. Automatically convert from monthly to annual plan.
Offline teams: Managers wanted to sign up 4-5 people in their team. Calendly told them to onboard individually, but there were pain points around expense reporting and so there was dropoff. It was hard to self serve this, so instead Calendly gave the manager a form to fill out that they then manually onboarded.
Team and business offering: Eg: Team scheduling. Idea came from listening to users. Combine availability, distribute invitations to team members, admin capability (permissions management, add/remove users), integrations (SFDC, GTM, publish API for Zapier and embed in website).
Added inbound sales team. Until then conversion happened online, but as larger companies (Zendesk, Marketo) started onboarding, they needed help with change management.
Started accepting POs.
Scaling out the team.
But it's still about individual users, do they love the product.
Did not impose will on customers. Listened a lot to users.
Churn because of many smaller users like SMBs could be higher than for a SFDC, but the effect's minimized by account expansion.
Calendly, has a weekly process of collecting every piece of customer input and triaging to zero.