2 yr Old HotJar Passes $500k MRR Helping 10,000 Customers See What Website Visitors Are Doing with CEO David Darmanin

David Darmanin

In Episode #558, Nathan interviews David Darmanin.  He’s the CEO and founder of HotJar. Over the 12 years before founding HotJar, he generated hundreds of millions of dollars in growth consulting small to Fortune 500 businesses. He’s got multiple teams, developed brands, and ran hundreds of tests for his clients spanning across 19 languages, 12 currencies, and 13 different industries. HotJar is now used in over 150 sites around the world and the company is growing to €3 million euros in just under one year.

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Famous Five:

  • Favorite Book? – The 22 Immutable Laws of Marketing
  • What CEO do you follow? – Jay Simons
  • Favorite online tool? — Intercom
  • Do you get 8 hours of sleep?— No
  • If you could let your 20-year old self, know one thing, what would it be? – I wished I truly understood what marketing was

Time Stamped Show Notes:

  • 02:18 – Nathan introduces David to the show
  • 03:03 – HotJar is a tool that allows site owners to see how their users are using their websites
    • 03:30 – Once you know the customer experience, it is easier to see what to improve next
    • 03:45 – Nathan experienced HotJar himself, in his website
    • 04:10 – HotJar is careful about what data to show in regards to privacy
  • 05:05 – HotJar’s technology was expensive
  • 05:30 – HotJar has a premium model
  • 05:51 – Average customer pay per month is €50
    • 06:10 – It was only €30 when HotJar started
  • 06:33 – HotJar is currently serving 10K customers
  • 06:50 – The number of sites each customer has
  • 07:30 – ARR
  • 07:40 – MRR
  • 07:55 – Revenue goal for 2017
  • 08:15 – HotJar currently has a team of 22 people and 8 on the leadership team
    • 08:35 – There are 5 people in the founding team
    • 09:14 – There are 4 big pillars: marketing, customer success, product, and operation
  • 09:57 – Gross customer churn is higher than net negative churn
    • 11:05 – “We are the dropping the smaller customers, but we are retaining and expanding the bigger customers”
    • 11:20 – Both have less than 10% monthly churn
  • 11:41 – HotJar was founded in 2014
  • 12:20 – “If you truly want to create a premium company and not just like a trial model which is disguised as a premium, you really need to think about how does that free package stand on its own 2 feet”
  • 12:43 – HotJar minimized the number of interface and allowed users to delete them and create new ones
  • 13:21 – David does not track the time the customer has converted from free to premium, but they track the cohorts
  • 14:00 – CAC is extremely conservative
  • 15:04 – The premium aspect Hotjar offers is brand building
    • 15:50 – There is brand value in doing different types of campaigns
  • 16:17 – HotJar is bootstrapped
  • 16:25 – HotJar sees other players who have raised capital
    • 17:14 – HotJar does not see raising capital as an advantage
  • 17:34 – HotJar gets a lot of referrals
  • 18:10 – HotJar just recently started with paid advertising
    • 18:40 – HotJar has an investment target model
    • 19:10 – HotJar has used this model to offer flexibility and freedom
  • 20:40 – The Famous Five

3 Key Points:

  1. Churn is one of the biggest challenges of a SaaS business.
  2. If you truly want to create a premium company and product—think about how that free package stands on its own two feet.
  3. Check your options because NOT raising capital can be very possible and advantageous for you.

Resources Mentioned:

  • Hotjar – Website analytics that work.
  • Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
  • Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible.
  • Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books.
  • The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences