Zapier's Growth Story

Cofounder Wade Foster on $0 to $5 Billion

Brian Bourque
November 25, 2023

Sponsored by

Hello to every unicorn in the galaxy, especially those of you in parallel dimensions.

I’ve been doing quite a bit of exploring in the AI space and despite being overlooked for the new OpenAI CEO role, I’m still optimistic about its future.

Zapier occupies a position of lore in startup mythology and is an important connector in today’s AI tech space.

Zapier was essentially bootstrapped from $0 to $5 billion valuation (they raised $1.2M in 2012).

It was a Y-Combinator company and has grown to be every entrepreneur’s dream: a massive SaaS company with product-led growth and a fantastic programmatic SEO strategy that continues to pay dividends.

Today we’re going to look into Zapier’s founding / growth story through the eyes of cofounder and CEO Wade Foster.

Strap yourselves in.

Today’s growth strategy is Zapier’s Founding & Growth Story.

"The best opportunities I feel like are trying to find these lesser-known tactics that are maybe working somewhere else but are just not deployed in the space that you're looking at."

Wade Foster, Zapier cofounder

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What is Zapier, really?

Zapier is a workflow automation platform that allows users to easily connect over 1,300 different work applications like Slack, G Suite, MailChimp, QuickBooks, Stripe, Salesforce and more.

What problem does Zapier solve?

Many of these software tools do not natively integrate with each other, so users can’t easily get different tools to share data or workflows
Zapier provides an easy no-code way for non-technical people to set up automations and integrations between these tools, eliminating tedious manual work
For example, set up an automation so new Salesforce leads automatically get added to a MailChimp email list, or new orders in Shopify automatically create invoices in QuickBooks.

Zapier Founder Story

Wade Foster started Zapier along with co-founders Bryan Helmig and Mike Knoop.

They had been doing freelance web development work, and kept getting requests from clients to build custom integrations between different software tools like connecting PayPal sales to QuickBooks.

This gave Bryan the idea to build a tool that would allow non-technical people to easily automate and integrate apps without needing to hire developers.

Wade was struggling with using marketing APIs at the time, so the idea resonated with him.

The three co-founders were based in Columbia, Missouri and started Zapier as a side project, working on it nights and weekends before eventually focusing on it full time after going through Y Combinator in 2012.

They took an unconventional path, bootstrapping the business while being fully remote from the start, rather than following the common Silicon Valley model of rapid hiring and fundraising.

Zapier’s Minimum Viable Product

Wade and the team started by building a very basic integration prototype over a weekend at a startup event.

Click here to see the first version of Zapier.com on the web.

They had the idea to facilitate app integrations using a "hub and spoke" model rather than custom point-to-point integrations.

After the startup weekend, they spent 9 months iterating based directly on customer feedback before the public launch.

They would give access to early users and then get on Skype calls to watch them attempt to use it, taking detailed notes whenever users struggled or got confused.

This allowed them to see exactly which parts of the product and user experience were difficult, confusing, or preventing completion of core tasks.

Wade mentions struggling through the initial user onboarding, having to talk a customer through every step since the UX had various issues that prevented self-serve signup.

They brought this feedback back to the development team to focus on fixing specific pain points before exposing the next batch of test customers.

While development was challenging and they lacked resources, Wade credits this disciplined early customer development process with helping hone the MVP feature set until it resonated strongly with users.

Zapier Product-Market Fit

Zapier found product-market fit early on through directly observing customers using the product.

Wade shares the story of the first customer who struggled through the complicated initial user experience, needing guidance to set up the integration.

But upon getting it working and seeing it automatically transfer data from one app to another, the customer had an ecstatic reaction about how much it would improve his business.

This showed Wade the stark difference between their prior products that hadn't shown market traction despite polished designs, versus a rougher but deeply needed Zapier.

It provided the key realization that they didn't need more refinement upfront if the product solved high-priority pains.

Wade then knew if they iterated to make setup/use smoother for less technical users, while retaining the core automation capabilities relieving major frustrations, they would have a winning platform.

Growth Strategies

Here are some early growth strategies Zapier used:

SEO/content marketing to drive inbound leads:

From the start, Zapier focused on a landing page and SEO strategy inspired by Patrick McKenzie’s Bingo Card Creator.

They created unique landing pages targeting keywords related to software integrations, so they would rank highly in organic search for related terms.

This generated leads of users already looking for the functionality Zapier provided. Over time they expanded content marketing to produce more articles helping educate and attract relevant users.

Developer platform for partners to build Zapier integrations:

In mid 2012 they launched a program to empower other software companies (like MailChimp, Hubspot etc.) to natively build Zapier integrations.

Some partners were attracted by the opportunity highlighted in their own user forums asking about Zapier.

This created a flywheel where more integrations led to more valuable use cases, which attracted more users, which in turn brought more partners to integrate.

Multi-step Zaps expanded capabilities and use cases:

This major product improvement transformed Zapier from simple point-to-point integrations into an automation platform.

It vastly expanded the ways people could leverage Zapier, unlocking many more creative use cases beyond basic data transfers.

Team plan for collaboration:

Later improvements focused on helping groups manage shared automations and providing admin controls around team workflows.

Concierge assistance guiding setup:

To increase adoption within organizations already using Zapier, they are piloting 1:1 consulting for users to educate them on automations relevant to their stack.

Zapier Hiring & Culture

Hire slowly and deliberately in the early days:

Wade took time to carefully add team members, not hiring again until the latest hire was fully integrated. This kept spending controlled, ensured full understanding of each role before expansion, and allowed maintaining a tight culture.

Promote a learning mindset and embrace reinvention:

With many phases of rapid growth and change, Zapier focused on flexibility and continual learning. This prepared the team to constantly evaluate processes and evolve systems organically over time.

Balance distributed setup with in-person connection:

While fully remote from the start, Zapier still flew people together frequently. Shared meals, activities and informal connection time built camaraderie and trust despite the geographic distribution.

Share context constantly through public internal systems:

By defaulting everything to public exposure within the company, providing weekly recaps, and through an always-on chat system, they increased transparency. This also allowed employees to better coordinate by understanding wider company activities.

Coach managers early and set clear expectations:

Wade admits they should have hired experienced managers sooner. Lacking management expertise made scaling operational processes and culture harder despite product-market fit.

Maintain high standards but be flexible on specifics:

Zapier focused on maintaining consistent quality standards for core company values and workflow integrity.

But they balanced those with flexibility around specifics of tools, methods and procedures as the team refined preferences.

Challenges & Setbacks

Here are some key challenges and setbacks Zapier faced as a startup:

Early hiring and management inexperience:

As first-time founders without prior management expertise, initially scaling up hiring and team integration was extremely challenging. This made it harder to build operational processes.

Overly complex initial platform partnerships:

Early on Zapier invested extensive engineering time into a integration with a major company that flopped due to complexity and lack of post-launch support. This taught them that even if a partnership opportunity seems hugely valuable on the surface, it's critical to start small in scope.

Dealing with shifting regulations on major consumer platforms:

Wade mentions issues where major networks like Facebook, Twitter and LinkedIn have sometimes cut off developer access or limited APIs in ways that disrupted Zapier workflows. Adapting to these kinds of external platform shifts continues to require significant flexibility.

Overcoming remote work limitations:

At times coordinating fully remote workers at scale posed difficulties, around challenges like ensuring employee effectiveness or trusting team members. But Zapier developed specialized tools, constant check-ins, and in-person meetups to overcome issues.

Through disciplined iteration and learning from dealing with these ongoing obstacles, they've been able to continuing adapting their approaches to overcome them.

Wade Foster’s Advice for Entrepreneurs

Start small, resist overbuilding, and focus on critical customer needs

Keep initial scope limited only to solving key urgent problems vs attempting elaborate polished products. Get a "good enough" working prototype out and incorporate user feedback.

Obsess over core distribution channels

Think hard about traction channels from day one, don't just focus narrowly on product features. Optimize any organic acquisition sources as priority.

Leverage partners early on

Look for partnerships with platforms your customers already use, which can exponentially expand reach. But ensure clear value to the partners via shared objectives.

Embrace constraints and capital efficiency

Wade believes their capital efficient bootstrap approach increased focus and creativity by limiting options. Raising and spending huge funding too early can be distracting.

Don't blindly follow conventional wisdom if it doesn't fit

Decisions like remote work or distribution methods were based on assessing Zapier's unique situational needs rather than existing playbooks.

Stay flexible and keep testing assumptions

Be willing to question seemingly successful approaches when contexts shift. Maintain a culture of transparency, feedback and continual learning.

Conclusion

Zapier built a kick-ass product and scaled with a thoughtful organic growth strategy.

Their product development centered around user feedback, which led to a better product, faster.

Unlike other startups of the day, Zapier relied heavily on self-funding and sustainable growth through organic channels.

Wade largely credits their success to embracing flexibility, maintaining curiosity and transparency at all levels of the company, and focusing intensely on maximizing distribution channels even ahead of near-term revenue.