Speaker 0 00:00:08 Welcome to the breakout growth podcast, where Sean Ellis interviews, leaders from the world's fastest growing companies to get to the heart of what's really driving their growth. And now here's your host Sean Ellis
Speaker 1 00:00:25 Episode of the breakout growth podcast. I interviewed Joe Cohen, founder and CEO of universe, an iPhone app that enables users to create complete websites using only their I-phones. So I asked Ethan, guarded, joined me for this interview, given his expertise in mobile growth. And I expect that I'm going to bring him back for other interviews with mobile app companies. The last two companies I had on the breakout growth pack cast were valued at over $10 billion. So I wanted to focus this interview on a stage. That's going to be a lot more relevant for many of the listeners, uh, universe itself launched via a pivot. And Joe Cohen was really the full team at that time, since then they've raised over $17 million. So clearly the pivot paid off. So what, what was the pivot all about? It was really based on this idea that if they could empower the next generation of internet entrepreneurs, think like Tik TOK and Instagram users, then they could really unlock a wave of creativity.
Speaker 1 00:01:30 And given that this generation already edits photos and videos from their mobile devices, they really do everything from their mobile devices. Why not actually enable them to build full websites from their mobile phone and this insight combined with working to grow in partnership with creators as unlocked, explosive growth for, for universe. So before we get started with the interview, I wanted to remind you to check out, go practice.io. This is the simulation that I built with Ola Yaqoob in cough. Who's a former data scientist from Facebook. It's really a powerful way to learn growth. In fact, I don't think there's a better way to learn growth. So check it
[email protected]. Now join Ethan, Gar and me as we interviewed Joe Cohen, founder and CEO,
Speaker 1 00:02:29 Welcome to the breakout growth podcast. It's great to be here. Yeah. I'm excited to learn about the universe story and, uh, for this interview, I'm doing something a little bit different as well. I've invited, uh, Ethan Gar to join the call. He's somebody who's provided a lot of insights to me in mobile growth over the years. So welcome Ethan as well. Hey, thanks, Sean. And nice to meet you Joseph as well. So let's, let's jump in with a, with a bit of a, um, introduction to, to universe and, um, really what, what problem it solves? What, what universe actually is. Can you give us a quick explanation on that, Joe?
Speaker 2 00:03:05 Yeah, absolutely. So universe is an app that lets you build an amazing website, right from your iPhone. So with no code, nothing like that, you can in minutes, get a site with a custom domain and your own custom design, uh, built on your phone. And we actually also will allow you to build a full online store. So you can build an inventory, sell things, using Apple pay and then fulfill your orders and ship them out all through the app. So a really, really empowering the next generation of internet builders and entrepreneurs.
Speaker 1 00:03:37 That's excellent. What, um, how did you decide to do that all inside of an app?
Speaker 2 00:03:44 That's a great question. I've been thinking about this sort of space of things for Oh about seven years. Um, and w w w what I realized was that, you know, smartphones were becoming really popular back in 2013, and it was clear that by the end of the decade, you'd have something like 5 billion people using phones all the time connected to the internet. And, you know, at the time, the, the discussion around mobile was really like these things were phones. They were like souped up cell phones. But what I realized was that no, these were actually the full-on computers and that for the first time you actually had universal computing. So everyone was going to have the full power of a computer in their pocket. And that, you know, the majority of, of internet traffic would come from these devices, uh, and that has happened. So 80% of the traffic on the web is coming from a mobile phone, but that none of the web is built on a phone.
Speaker 2 00:04:36 And it struck me that that wasn't a, uh, limit of the hardware technology. And it wasn't a limit of appetite, but was rather a limit of the tool design of the software. And that if you design tools that enabled people to build the internet from their phone, you'd unlock a wave of creativity, because the people who are using phones to build things are just different than the people who were using more traditional devices. Um, so we've seen what's happened when you democratize things like photos with Instagram, or, you know, video with Tik TOK, you have this sort of wave of, of creativity. And I thought, man, you can do the same thing with the fabric of the internet itself. Yes, Joe, it's really interesting that you say that because I'm in the midst of actually building out a website right now, I've been doing it on WordPress, which is totally new to me and playing with the universe app today.
Speaker 2 00:05:27 I realized just how incredible it is that you can actually shrink down that whole web development experience to a phone display and make it into something that you know is really mobile friendly. I imagine there are a lot of difficult choices you had to make or design choices. And I was curious your approach to that, how you came up, how you thought about, did you think about this completely new, or did you try to take that experience and bringing it to mobile? Yeah, so I, I think it's reasonable to describe the universe as a user interface. What we do is we really create user interfaces that make previously complex things easy and simple and fun. Um, so something that feels like work, we turn it into something that feels like play and yeah, you're right. It's a really, really hard design problem. Like how do you shrink a full on development tool?
Speaker 2 00:06:14 That's not just a design tool and not just a development tool, but all of that into a tiny screen for someone who's never built a site before, who's never built an online business before. So we're teaching you a lot of things in addition to actually enabling that functionality. Um, and so it did require like an original design to do. Um, and the only reason that, you know, we were able to do is because we didn't have the legacy of a previous desktop based app that we had to cram into a phone app. Like WordPress does have a mobile app, but you'd never consider it a mobile first experience because they had to take this sort of legacy thing and bring it to a small screen. One of the ways I like to say is like, you know, on a, on a smartphone, what you lack is you lack, uh, X, Y space, right?
Speaker 2 00:06:58 Like the, the screen size is a limiting function. So when you compare it to a bigger screen, like a desktop, the real challenge as a designer is you don't have places to put things like you have no nowhere to put a toolbar. You don't have, you know, a side panel with controls and nearly every website, builder and commerce platform has the same interface on the web, which is like, you have this left panel with all the parameters that you want to control. And then on the right, you've got the display, the output, you couldn't do that on a phone cause there's no room, but what you do have on a phone is you have the dimension of time. So at any one point in time, you might not be able to show that much, but you do have the benefit of showing things in sequence only when they're necessary.
Speaker 2 00:07:42 And so you say, okay, I want to add something to my site. And then it shows you the pallet of what you can add as opposed to exposing that whole pallet upfront. And actually I think what this does in practice is it sort of forces good design, it forces simple, um, sort of communication and, and a simple flow of how the thing is built so that you're not overwhelming the user at any one point with too much. So you're breaking things down into their sort of steps. And so even outside of the iPhone, it's, it's a good design practice, but you don't have the forcing function on a larger screen to embrace that kind of constraint that you, you need to. Um, but on, on mobile, so universe is a mobile first web builder, but the truth is that our approach to web building is totally different than any of the other website builders. And that was a change that was sort of necessitated by the form factor of the phone, but is useful outside of that context as well.
Speaker 1 00:08:40 Yeah. So are these websites, are they, they, I mean, obviously it's great for designing for the phone. Um, so you, you probably get a much better preview than, than people would normally get, but they, they tend to work great on, uh, on, on the normal web as well. Yeah, absolutely.
Speaker 2 00:08:56 So they look great. You wouldn't know if you opened them on a desktop that they were created on a phone. Um, and so yeah, they scale beautifully. Uh, but the idea is like, yes, you created on your phone in this app, but it lives everywhere on the web.
Speaker 1 00:09:09 Okay. And then I know Ethan was asking me earlier about the, uh, he, he mentioned that you guys are only iOS, was that, uh, w was there a reason that you didn't also do Android,
Speaker 2 00:09:21 So that the reason it's mostly a resources reason for now, um, and when you decided to really focus on the Apple ecosystem, there's a large install base, um, and actually relevant to this podcast, you know, um, a more monetizeable install base for a subscription-based app. And also the other thing is focusing on iOS makes our lives a lot easier in some ways, because we have, you know, a baseline of hardware that we can trust, um, in the iOS ecosystem and for a tool like ours, which is very rich, and it really feels like an immersive editing experience. It'd be, it would be much harder to do on Android. Definitely not impossible, but we decided to, you know, focus for now, um, on, uh, on iOS. And I would say in general, we've up until now focused on the domestic us market, the apps available everywhere. And we have users all over the world, but for example, our commerce services are only available right now for US-based merchants. Um, and once we do a big push into international, which we will, you know, Android becomes a lot more relevant,
Speaker 1 00:10:25 Right. That makes sense. And then how do you guys charge for the service?
Speaker 2 00:10:30 So we have, the app is free to use. You can put up a site with as much content as you want for free. Uh, and then we have a premium service called pro, which includes a custom domain. It removes the universe branding. It gives you analytics and a bunch more other premium services that if you're busy building a business or building a brand you want, um, and that starts at $120 a year or $25 a month, it's all built through the app.
Speaker 1 00:10:56 Okay. And I assume that it's not just the building, but really they have kind of a CMS as well that, um, that, that they can use going forward.
Speaker 2 00:11:05 Absolutely. Yeah. So, so the whole app is, um, it's a very robust app, so it starts with building your site, but we also help you get your domain. We help you build an email address, uh, an email list of your followers. Um, and then, yeah, as you're building out your sort of your catalog, you can manage your inventory using universe and add new products super easily and fulfill your orders through it. And so, so we do all that.
Speaker 1 00:11:32 That's awesome. And then I noticed that in looking at your LinkedIn profile, that this isn't necessarily what you started with with the business. What were you originally doing when you launched the business and how did you decide to make the pivot to what university is doing today?
Speaker 2 00:11:47 Absolutely. So the original instinct was, was sort of the same, which is how do you empower everybody to build the internet? And it was always about phones and it was always about sort of democratizing access to building the internet. Uh, but the answer to that question was different. So in the first instance of universe, we weren't a website builder. We were more of a social network where you were creating a new kind of, sort of artifact that wasn't a webpage, but it was what we called a verse. And, uh, we had, we developed a lot of the tools that we currently use for editing your site. But the context was that you were publishing within this private network and not to the larger web and everyone we showed it to thought it was really cool, but no one understood what it was for. And so in 2017 did a pretty drastic pivot into this new direction, which, you know, everyone immediately understood, right? Like people want websites, they want to be able to make websites from their phone. They want to be able to do it simply and easily. They're very frustrated with the experience of doing that in general. And so, uh, it, it started to fit like we started to actually find product market fit. Um, and that was a positioning thing as much as it was the actual technology, which is, which is pretty interesting, I think.
Speaker 1 00:13:04 Yeah. So, um, and then you guys, I think, um, I read that you just raised $10 million and so total funding about 17 million plus a little bit. Um, so clearly that pivot worked out. What, when did you know that you were on the right track with that pivot?
Speaker 2 00:13:24 So that's true. All that, um, all that is, is, is accurate. Um, honestly it sounds a little trite, but as soon as we shipped the first version post pivot, it was actually just me at the company at the time. And we had customers on day one who were paying us to use the app and they loved it. And it was a very, very simple app. It only allowed you to make a single page site with very limited tools, text photos, links, the pages didn't even scroll, but we had people who absolutely loved it. And the overwhelming sort of insight was like, yeah, I want to do more with this. And so we've been pulling the thread ever since, and now you can really build any kind of set with the university. You could even build a business with it. And so, but at that, at that moment, even though the data was small, it was clear that we had tapped into something that was there, that people wanted to build sites from their phone and that at the time was not obvious at all. Um, and so that's, that's where it started. And over time they've been iterating. We did Y Combinator in 2018, and then most recently, uh, raise a round of capital from GV. That was a $10 million round, which we closed in April.
Speaker 1 00:14:38 Wow. That's, that's amazing. I mean, I have to admit that it seems kind of counter-intuitive to me, that people would prefer to create websites on the small screen, rather than having kind of more, more real estate to work on, on a computer screen, but clearly, you know, proofs Chris and the numbers, and that's why you, why you have to kind of test these things. But what, what is it that you think, um, is, is unique about your customers and, and preferring the mobile experience for creating a website?
Speaker 2 00:15:08 I think there's two things. I think that one of the reasons that this is tricky is because people like you and I who have been using traditional computers for our whole lives and do everything on them. The idea of doing this on a phone just seems like a joke in a lot of ways. And that was actually a lot of the feedback in the early days, uh, from the tech community. And what I found was that in practice in market, uh, that's not at all what I was hearing from our customers, from our customers. It was obvious that they wanted to do it on their phone because for most of our customers, they've never built a web, but say before, they've never felt qualified to do that. And the phone was the one place where they actually felt comfortable doing sophisticated creative things with the computer.
Speaker 2 00:15:51 And so that started not as building websites, but as editing photos and then editing videos and producing things for Instagram stories. So this isn't sort of an outgrowth of that. It's, it's, it's furthering that level of sophistication and I would cluster our customers into two general buckets. Um, and one is, is sort of the obvious one, which is like the tick-tock generation, right? Like the, the next generation of internet users who are mobile native and do everything on their phone. Like, for example, my, my 20 year old sister, she is not a geek, a computer geek like I am, but she is unbelievably sort of proficient at using her phone. And she she's a power user, even though she doesn't fit into any traditional sense of what a tech power user is. And that's a real thing like that. That is just that generation is just, um, they're plugged in to a phone in a way they never were, or people never regular people were never with, with traditional computers.
Speaker 2 00:16:48 And so they're obviously going to reach for their phone when they built one to build something out. But the other thing is we actually have a lot of users who never really got traditional computers for building things. So these are often older users, um, you know, users in their sixties or seventies who are much more comfortable using an iPhone or an iPad than they are using a desktop system. So what we've heard from our users, which is really interesting is I think people often think of Squarespace and Wix, um, as do it yourself platforms, right? That's sort of the marketing of them. But in practice, what we found is that most people who we've interacted with do not think of those tools as tools that they can use on their own. They think of them as tools that they need to hire someone to work with, or they need to get their nephew to help with, or they need to have developed some skill to use them.
Speaker 2 00:17:39 Um, whereas with universe, it's the first platform where they feel like they could actually do it themselves. And that's not just because of the, the creative tools, but it's also because, you know, like hosting and getting a domain are out of the box. There's no additional accounts to set up. It's all in one. Did you, I was curious, did you discover that this was the audience that was attracted to your, uh, app or were you intentionally targeting that audience as you, as you built this up? Well, I think that it's, it's a, it's a give and take, right. We had a hunch upfront. Um, but you know, then we started to see more traction in those areas, which confirmed our hunch. And so we've doubled down on them. Um, you know, one thing that people don't realize Shopify is this giant company, their stock's been exploding over the past six months. You know, how many customers Shopify has. They have a million customers and that's, that's great, but it's a million on an internet of 5 billion. And so we see a world where you can have a hundred million creators, a billion creators, a billion entrepreneurs. And so we just see a much larger potential scale when you brought in, who can create these things using these devices.
Speaker 1 00:18:58 Yeah. You know, it's interesting as you, just, as soon as I asked my question and you started going forward, I, I immediately went to thinking of my, my daughters, you know, they're college aged daughters that are, uh, you know, constantly on their phone editing, editing photos, like you said. And, and then, but even my wife does that. So, you know, a later generation is doing that as well. And, um, it, it almost feels like, you know, that all the businesses that have sort of launched on Instagram, like fashion brands, being able to kind of close that loop with this and, and monetize an Instagram presence, like suddenly as you start talking, the, the opportunity becomes a lot more like, Oh, of course. But like I said, when you, when we first started talking, it just seemed counterintuitive to me. So, um, that's, it makes a lot of sense that you've had as much traction and progress as you have.
Speaker 2 00:19:50 Yeah. I mean, I think the Lincoln bio economy is real, right. If you think about it, you know, we often think as businesses about social channels, as tools for distribution, for our own products, but that's true for pretty much every one of the users on these platforms as well, right? So increasingly Instagram is not differentiated by its tools, but by the fact that that's where your audience is. And so Instagram becomes just a, a distribution source. And so you want to, you want to sort of monetize that distribution source, or at least you start to build your own community around it. And so build your own email list, build your own presence. And so it's a natural extension of your Instagram profile to have a website that is your own place. Uh, so that's sort of how it,
Speaker 1 00:20:39 Yeah. And the fact that you can't even publish photos on Instagram through a computer that it's so mobile centric. Um, it seems a really natural extension that the, that the managing the monetization arm for a lot of these people would be, would be a fully mobile experience as well.
Speaker 2 00:20:57 One of our top sellers is a, uh, a woman she's 19 in Nebraska who has 400,000 followers on tick-tock. She goes by morgue and she, uh, doesn't look anything like your traditional internet entrepreneur. She's young, she's female she's really into fashion. Uh, her website is incredibly unique. She built it herself. It looks like something that you would have had to pay some New York agency, hundreds of thousands of dollars to a belt. And she's designing everything. She's designing our product, her website, her graphics or logo. She's building her audience off of her phone. It's all in our pocket. And it really is. It really is sort of freedom and, and this power that people have never had before.
Speaker 1 00:21:46 That's super cool. So if you, I mean, I think I've kind of got the answer in what we've just said there, but if you could really boil down kind of success up to this point, the, the one most important thing that's driving that success, what, what would you attribute it to
Speaker 2 00:22:01 It's product? I mean, we make a product that people absolutely love. Um, and so, you know, it starts with it being mobile first, but it really that's just the opening, the way that our product works, we basically take in, you know, other website builders are template based where you're starting with a template and you can customize some of the features of it. But at the end of the day, the site's skeleton is a template and you can't break the template. Universe has templates, but it's not template constraint, which means that you could really make any design that you have in your mind. And so it's giving people who don't have any technical skills, the ability to create in their own way for the first time. And people absolutely love that. You know, when we, um, when we think about, uh, designing our app, you know, we think about where do we get inspiration from?
Speaker 2 00:22:48 We don't get inspiration from, you know, Microsoft word or other sort of, uh, desktop tools. We get inspiration from musical instruments. And if you think about like a musical instrument, um, you don't w what does a musical instrument? Well, a musical instrument is a tool for creating music. Uh, but we don't use instruments. We play them, right. We play them, they're fun, and they get you into a state of flow. And we believe that when it comes to building things on the internet, you can do the same thing. You can get people into a state of flow, um, and that they can actually enjoy it. And the thesis is that if you do that, they'll use it more and they'll, uh, they'll build more with it. And that has born out. So people edit their site on universe, way more than in traditional tools. And they're constantly making updates to their, their site and their presence, and they're iterating them.
Speaker 2 00:23:36 And, um, you know, one of our core company values is this Japanese idea of Kaizen, which means continuous improvement. It's how we work as a company. We ship, we iterate it, we've learned we, we update, but we also encourage our creators to do the same thing where they, you know, as soon as you open universe for the first time, within a minute, you're going to have published your site. And the whole idea there is to get you into the Headspace of like ship early and often, don't worry about it being perfect, get something out there and you'll iterate it. And that's how you're going to get to your better place. And that's the approach we've taken with building the product. And so right now, the universe app is way more powerful, way better in every way than it was three years ago. Uh, but we've been pulling that thread and we ship rapidly every week and we're, we're constantly improving. So our growth is very much due to that product. And, um, that leads to word of mouth. It leads to, um, you know, organic, uh, uh, adoption through the, the app stores, et cetera.
Speaker 3 00:24:33 I really noticed that using the app, you have incredible speed to value. It was like, I downloaded the app. And a minute later I had a publisher. I had a published website. I couldn't believe how quick it was, um, with that though. I mean, I imagine you've also had some difficult challenges. Uh, we all know about iOS 14. Um, I'm curious what the growth challenges have been for you guys and how you face them and how you've overcome them. Yeah, absolutely.
Speaker 2 00:24:56 So I think, you know, we attributed early. Yeah.
Speaker 4 00:24:57 Like, so most people don't
Speaker 2 00:25:03 No that it is possible to build a website from their phone. And so that's in many ways, a lot of the, our challenge is like building that awareness that it's possible. Not, not that we need to convert them to do it on our phone from a desktop, because most people don't have websites like we're talking about, it's still a blue ocean market. Like some of the companies in our space are very large, but they don't serve that many people. And so really what we're trying to do is expand the market and, you know, most folks don't yet know this is possible. That's changing three years ago when we first launched many fewer people knew that this was possible. Um, but you know, the thing for us is really like, how do we, uh, when we get someone to install the app, how do we deliver an incredible experience that they go tell their friends and share their site online? And every site that's created has a little banner on the bottom that says it was created with universe. So I'd say the largest trend is really building that meta awareness that this is possible. Um, but you know, we, we do have consistent word of mouth and organic growth that has, has been the result of early adopters, telling their friends felt creatives, um, that, that they can build from, from their phone and anybody can do it. And it's super easy. Yeah.
Speaker 3 00:26:12 It's really interesting, like with, uh, with a blue ocean type of product that you're, you know, you're challenged to both build the interest and then get people to do something. Um, I guess what, like where have you guys found success, like driving those measurable results from like, here's how we drive some interest. Here's how we get those people with that interest actually doing something
Speaker 2 00:26:30 We've really leaned into. I would say there's three things we've leaned into the app store as a channel. Um, what we find is that, so our top source of traffic is the app store directly, and it's people who search website builder. Um, and we, we rank really highly in the app store for that query. Uh, Apple has actually featured us a number of times. They've written a profile on university have written a profile on one of our users. Uh, so that's been a major sort of source for us and a source of education in addition to, um, you know, just sort of downloads the other is really leaning into the platforms where people are creating. Um, and so that's Instagram, that's Tik TOK, that's snap. Um, and so we have a presence on all those places and we make it easy for you as a creator to share what you built in those environments. Um, but then finally, you know, we do do some paid acquisition and that's primarily through those channels, which is a very natural evolution. And so, um, it's not the majority of our acquisition, about 60, 70% is organic, but, um, you know, we do, uh, we do do, uh, we do have a budget for our paid acquisition and, uh, we found it to be a very compelling and from a unit economics perspective, profitable channel for us to, uh, go after.
Speaker 1 00:27:48 So how does the, how does the kind of, um, branding work on the sites that are built with universe? Is it, is it just say powered by universe or what's, how does that work?
Speaker 2 00:28:00 So if you're, if you're using universe for free, then we give you a sub domain as your domain it's dot on universe.com. And we put a little bit, a little banner on the bottom of the screen that says created on universe. And if you click it, it, it shows a little sort of billboard pop-up for what universe is about that drives people to the app store. If you're a pro customer, we remove that billboard and we allow you to get a custom domain. One thing that's interesting is we also have this thing called a sticker on our sites and the stickers like the universe logo. It's not, it's not in your face at all. It's just at the, at the bottom of the site. And if you're a pro customer, you can remove the sticker. And what we find is that a lot of our pro customers actually keep it on and we allow you to customize the sticker and how it works, but people actually really like being on universe.
Speaker 2 00:28:45 And so they, they leave it there, even though they don't need to. But, you know, I would say being that like the primary reason why people build a website is because they want their own space. They want to put their brand first. Whereas on Instagram, you know, you are at the end of the day, one little blip on the Instagram sort of network. And everyone knows that, you know, you go to someone's profile and you're on Instagram. When you go to someone's website, that is their place, that is their world. And so we are a functionally and fundamentally deferential to the creator and their brand. And we are empowering them to sort of put themselves on a pedestal in that way.
Speaker 1 00:29:23 Right. Have you, have you tested different messages on that little banner?
Speaker 2 00:29:28 To be honest, we have, but I think there's a lot more we can do there, frankly. I think that that can become a real surface for us to drive a natural viral loop.
Speaker 1 00:29:37 Yeah. Cause it reminds me of, uh, Qualaroo uh, company that I had built and sold a few years ago that, um, essentially we, we had billions of impressions of surveys that were popping up on, on people's sites. And originally we just had powered by Qualaroo, but we, when we tested different messages and tried, uh, have you tried Qualaroo question Mark, we got more than a doubling on the response rate. So I almost feel like if you tried something like, uh, built, built on a mobile phone learn, how is almost more important than the universe brand being on there? That's actually a great point.
Speaker 2 00:30:11 This was built on a phone, believe it or not like kind of thing. I think that's, yeah.
Speaker 1 00:30:15 I mean, it's, it's a task who knows if it would work or not, but it feels like that, you know, that when you talk about that challenge of, um, having people become aware that they can even build a website on a phone, if they, if they saw that it might, might drive a lot more intrigued than simply, um, you know, built with the universe.
Speaker 2 00:30:32 That's a great point. You should have, you should be a growth consultant.
Speaker 1 00:30:36 I'll try that one of these days I'll get a tattoo that says it.
Speaker 2 00:30:42 But, but one thing on that point, um, you know, so we, uh, we, up until a couple of months ago had a pretty restricted free product. So you could create a single page for free. We offered a limited set of tools, creation tools available for free. And in the past couple of months, we've actually changed our strategy, which is to open up the free product a lot. So you get access to all of the creation tools. You can make a site with literally anything you could even sell things on your site, um, fulfill orders, ship them. We will generate a shipping label for you on the phone, that's all free. Um, and so, you know, now that we're doing that, we have a lot more surface area that we use to drive growth, right? Like there are more pages being created. There were more things being created. And so the flip side of that is, is to your point, like, how do you maximize the other side of it so that the people who are interacting with that are actually driving growth in numbers.
Speaker 1 00:31:40 Yeah. And particularly if, if you, if they see a pretty sophisticated website that says built on a phone, that's gonna be more powerful than if they see, you know, just a single page website that you originally were offering for free. So it, it, it, uh, you know, in a sense it's, it's the demo of, of what they can do. And so, um, it's great that you are, uh, that you've enhanced the value on that. Obviously there's always risk that it cuts into the upgrade rate, but, you know, I think I've worked on 15, 20 freemium businesses all together. And I, I definitely find that the more valuable you make the free product, the more you get that steep curve of just, you know, enthusiastic customers spreading the word. And I'd rather have yeah, 2% upgrade rate on a really steep curve than a 10%, um, almost a flat curve. So, um, it definitely models much better.
Speaker 2 00:32:32 Exactly. And also, you know, the whole mission of the company is, is universal, right? We want as many people as possible on the web and not every one of those people is going to pay or can pay, but we still want them to be part of this ecosystem. And so it's in line with, it's not only good for our business, but it's also, you know, in line with our mission.
Speaker 1 00:32:51 Yeah. So you, you mentioned when you, when you first launched universe, it was, you, you basically were just yourself and, um, and you clearly put together something good enough to get that feedback that you were onto something, and now you've raised $10 million in your most recent rounds. So I assume you've added a lot more people to the team. What, how have you evolved that team as you've, as you've grown into the market, do you have, for example, different, uh, marketing and product or growth and, you know, is it, is it B2B sales or entirely e-commerce driven? How, how, how do those different pieces?
Speaker 2 00:33:27 Yeah. Great, great question. So we are, it's not just me anymore. We've got 25 people and, uh, we're, we're all around. Uh, mostly the United States. We have one employee in Mexico, uh, but, um, we have been a remote company from the beginning actually, which is pretty cool. So when COVID hit, we sort of, didn't miss a beat and we are hiring. Um, but the way that the company structured is we basically have a product org, a marketing growth org, and an ops org. Um, it product is the biggest one. It's the sort of the anchor of our company, you know, 13 engineers, designers, et cetera. Um, we have on the marketing growth side, sort of one integrated team that encompasses, you know, more traditional brand and product marketing, as well as performance marketing as, as well as sort of, uh, growth, uh, in the, in the, in the capital G sense of it.
Speaker 2 00:34:22 Um, and that's one little pod, and then we've got an ops team, uh, that, you know, is there makes it all work, support, things like that. Um, we do not have any sales at the company, so it's entirely a, uh, a, uh, it's an entirely, a self-serve tool. However, our support is awesome. So, uh, if you use the app, you can go in and you can chat with us in real time. We'll hop on a video call if you want some help and, and redo that, uh, to make sure we're delivering an amazing experience, but also because we're learning from our users and we're incorporating, uh, their desires into our product. So one example of that is, you know, we didn't expect four months ago to be in the business of shipping. Uh, but what we realized was that for a given seller, there's basically sort of four core parts of their success loop.
Speaker 2 00:35:13 So they create a product and a website. Then they want to promote that website that drives a sale, and then they need to fulfill it. And what we realized was we had a product offering for the first three of those steps, but not the final one and for fulfillment. And so we said, can we make something really magical here? And we were able to do that where we actually will get you the price on shipping and generate a label from the phone. You could literally print it from your phone. And, um, and so that, wasn't something that we would have naturally come to. Uh, but having those conversations, none of our users asked for that explicitly, but we realized that, you know, some of our customers were spending more on shipping than they were charging for their products because they'd never shipped products before. And so they had no intuition for what shipping costs. Now we build it right in and we give them the best prices. So that's the kind of, sort of discovery that we do here,
Speaker 3 00:36:08 As you're looking through this, you know, through this lens of this is your team, and what's like, what's the next step? How are you going to, how do you plan to scale from here
Speaker 2 00:36:15 From a team perspective? Yeah. Yeah. Well, actually it's a good point. And I think this is a good place to say that we are looking for people to join us on the growth and marketing side. We're still figuring out exactly what the right structure is at our team. Like, and one of the things I, things I've been trying to figure out is like, you know, I think that I'm a, I'm a student of all the growth literature. And over the past few years it's been, um, you know, it's been something that I've become really, uh, enmeshed in. And I think one thing that's also clear though, is that every company really, it takes inspiration from others. But if you're a successful company, you're sort of designing your own version of this model and we're still figuring out exactly what that looks like for us, whether, you know, uh, marketing and growth are one singular thing as they are currently.
Speaker 2 00:37:02 Um, whether, you know, we have a function within product that is more growth oriented. We're still figuring that out. And we are looking for talent across the board in that area primarily. And that's really the thing I'm thinking about. And, and, and, and working on the most right now, personally, uh, so that's growth and marketing leaders, and it's ICS. We're looking for, you know, an analyst actually, we're looking for, um, you know, people who are more product, um, oriented who can do something like Sean's idea of, you know, let's look at, um, the billboards in our sites and see how we can actually turn that into a real growth factor, that kind of thing. And, and we're also looking for more traditional marketers who have a great sense of brand and, and specifically product marketing. So that's the big area of growth for us right now. We have a very robust product team and we had a very ambitious product roadmap for the rest of the year and beyond. Um, so the challenge for us now is really educating the world that this is possible, that universe is here and it's unlike any other product and that you can make something great with it. Right.
Speaker 1 00:38:04 So one of the things you, you touched on was when you, when you added more value in your free version, that you're, you're accelerating the reach and impact of, of the business. Um, is there, are you familiar with the concept of North star metric and is there, is there some kind of metric across the company that you're all looking at that helps you understand how much progress and impact that you're making in the business?
Speaker 2 00:38:28 Yeah, absolutely. I mean, at a high level, um, there's sort of three vitals that are broad based across our, um, our site building business. So we're a site builder. So obviously we look at how many sites are created, how many actives, how many active sites are there, uh, which is a bit of a composite metric of, you know, have there been an edit to their site, is the site traffic, something like that. And then we have subscribers. So I'd say like the two high-level ones that we look at are like active sites and subscribers paying subscribers, but we actually, as we've dived into commerce, we rallied around a specific North star metric around commerce, specifically GMV gross merchandise value, which is amount of dollars that are transacting through the platform. And that's been our metric for Q3. Um, and we sort of tweak that as we go, but we are definitely the way we approach it is we have one hero metric that we look at it on a weekly basis, um, as a full team.
Speaker 2 00:39:25 And, and for me, even in more precise ways, but, um, but then we have like a, a menu of vitals that we're looking at, um, that for any patterns in that we want to see generally positive trends, but yeah, we have embraced this sort of North star, um, metric. Do you define sort of your experiments and what you're going to do in any given sprint sort of based on what that metric is that you're really trying to move at that point? Absolutely. I mean, I think we, a lot of the things that we build our core product, right? So they're not necessarily a growth experiment, but if we are doing a growth experiment, which I would say, you know, is a major part of our development cycle, we will roll it out as usually an AB test, maybe with more than two variables. And, uh, we'll have a thesis about what it's going to move.
Speaker 2 00:40:15 We'll measure up how it performed, and then we'll, we'll decide how we're going to go forward with it. Uh, but those ladder up, I mean, you know, something like GMV is a bit of an output metric, right? It's not in and of itself. Something you can just move the way that people do more sales on universe is they, you know, we acquire them in a knowledgeable way. They find value in the product, they list their products, they drive a sale, they are able to get growth in their own business. So it's the ultimate success metric for us, but it actually is quite down funnel. Um, and so often breaking that North star into its constituent parts and inputs is the most effective way to actually move it. I found.
Speaker 1 00:40:56 Yep. No, I totally agree with you on that. So let's, let's go real fast. I kind of zoom back into the actual customer experience a little bit and think about from sort of, you know, initially being exposed to the product you've you talked about it, maybe through the app store, it might be through the, you know, that they're looking for a website builder or, or the link, but what would be like the most typical path that someone goes from discovering it to becoming like a raving fan of universe?
Speaker 2 00:41:24 Yeah, absolutely. So, um, someone goes, someone wants to finally build that website and they are active on social media. They have used apps to do things like edit their pictures to some people even make music on their phone, Stripe books, all that kind of thing. So their instinct is to go look for an app. They go to the app store, they type in website builder, they see the usual names like GoDaddy and Squarespace. And then they see this one called universe. That's a little bit different looking. We have a preview of what the app looks like, and it shows you the building block approach that we take. They download the app, they, um, in their first minute or two, we'll go through our onboarding experience, get a domain and have a site on the internet. And they're immediately wowed by that. But they're also wowed by the editing experience.
Speaker 2 00:42:14 And then from there, they start to build out their site and they don't necessarily have a preplanned idea of everything they want their site to do. They're tinkering, they're playing they're, they're feeling it out as they go, which is very different than a typical sort of web design process where you conceive of the whole thing and sketch it out before you actually build it on universe. You're, you're building it and designing it as you go. And so people can spend as little as 10 minutes an hour getting it all like perfect, but we have other people who will spend, you know, a week assembling everything that they want doing on honest share with their friends, et cetera. And then at some point they'll share it on their social announcing that they've launched it. And a lot of times they'll do that with a product that they're selling or some release that they want to broadcast.
Speaker 2 00:42:58 And, um, you know, from there that they're evolving and growing with the tool, they're using more sophisticated things that we offer. They're checking in on their analytics on a daily basis. They're, uh, driving sales, fulfilling them. You know, one of our creators is a woman named Kate and she, uh, is based in New York. She makes key lime pie. And I know this because I ordered one of them and they're amazing. Um, but, uh, no, so she found the app. She she'd never built a website before. Uh, and this is a business that she started through quarantine. Uh, she's a private chef and, and, and, you know, so this was a side thing that she was doing. And now she's like an internet entrepreneur selling these through universe and she's in the app on a daily basis. Uh, but she's also become a big fan of ours and we've done, uh, collaborations with her and things like that. And now she's rolling out another pie that isn't key lime. And so it's just a, it's, it's sort of, um, a symbiotic growth relationship. One of the things we like to say is like, for us to grow as a company, we just have to help our creators grow. And if they grow, grow, you know? Yeah.
Speaker 1 00:44:04 That makes a lot of sense. And I, you know, when I, when I kind of stepped back, we're, we're running a little short on time, but when I step back and just look at this business and, you know, from, from what you've said, some of the key takeaways that I think on, on, like, why is this business growing so well, one just, I think that you've creatively tapped into a new behavior. That's, that's emerged that a lot of, a lot of people have missed including myself, as I asked the question about it. Um, you know, just where people are doing everything on their mobile. And it, I also think that the people who you're appealing to are probably really strong on social, which makes it that you, you have this good interaction of your, your, your customers are really well connected. You're empowering them to make more money, but there's, there's a really good loop there that's, that seems to be propelling the business forward quite a bit. And it also looks like that you, you recognize there's still, uh, you know, as you're looking to build out that growth and marketing team, that there's still a lot of low-hanging untapped, uh, opportunities there to probably accelerate further.
Speaker 2 00:45:08 Absolutely. A hundred percent.
Speaker 1 00:45:10 Yeah. Ethan, did you have any other kind of key takeaways? As I, as I, uh, was highlighting what I thought were the key drivers of growth in the bids?
Speaker 2 00:45:18 I would say, just building on top of that, it just seems like, you know, you've really, it's interesting that you list yourself as an entrepreneur and a designer. Cause it seems like both of those things are really critical to this business. And it's interesting just how you've taken this mobile first look, but said our job is to help people really universally create on the, on the, on the, on mobile and the way it seems like that's really been the, uh, an amazing driver of this business is just giving people that the ability to do things that they could didn't even think they could do. You know, one of the things that's interesting, I think for us in the tech industry, we know how there's been like this Renaissance over the past 10 years of SAS tools. And with those SAS tools, small businesses can really, um, they can do a lot more than they could have done in the past.
Speaker 2 00:46:02 And we, as a, as a small business, use a bunch of these SAS tools and they've really allowed us to almost behave like a Google in a lot of ways. Um, and in many ways what we're doing is bringing that model to consumers. You know, we're taking this set of tools that we as companies have had, and we're, consumerizing them, we're putting them into one product. And that is, uh, powered by basically consumer subscriptions. So under the hood, what's really enabling our success. And us as a business is the fact that we can actually charge for our product in a way that makes sense for us in a sort of a SAS way. And that wasn't true six years ago, like, uh, this idea of having a subscription app that was for a tool just didn't exist. I mean, on the margins, you had things like Spotify, but that was for content.
Speaker 2 00:46:53 And so that's a big enabler. And I think the big insight there is that prior to this category, the way to monetize consumer apps was through ads. And so when you monetize through ads, your relationship to the customer is obviously you want to serve them, but at the end of the day, your interest is to monetize their time and their eyeballs. And so there is, you know, there is something of an adverse relationship between you, the developer and the consumer in our business, our whole job is to like empower creators and that's what we get paid to do. And so we think that we're breaking new ground in that way. Um, and it's very much in line with the service that we're providing. But, you know, when we say that we are helped trying to help our creators grow, like that's genuinely, it's in our own company interests, but it's also in our creators interests. Like there's no, there's no sort of clash of business model and user interest. And I think that's allowed us to really grow the way we have, but also, you know, opens us up to a much larger market.
Speaker 1 00:47:58 Absolutely. I mean, that's a, that's a great note to wrap up on. I, I just, uh, yeah, I'm, I'm really inspired by, by your story. And, um, and I feel like you're still so early in the journey, there's, there's probably going to be so, so many interesting developments that we'll have to check back in and in another year or so to see, see where you go from here, but, um, definitely an exciting story. And Ethan, thank you so much for, for helping me with this interview and, uh, for everyone tuning in, thanks for tuning in,
Speaker 0 00:48:27 Great to be here. Thanks for listening to the breakout growth podcast. Please take a moment to leave us a review on your favorite podcast platform and while you're at it subscribe. So you never miss a show until next week.
