Insight: SaaS (46) Case Study: Zapier’s Secret (Part 2)
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We began exploring how Zapier might expand quickly and profitably despite taking on only a modest amount of venture money in the previous article ‘Insight: SaaS (45) Case Study: Zapier’s Secret (Part 1)’. Zapier raised 1.4M in the Seed Round in 2012, and it announced ‘profitable’ in 2014 and has never accepted any other venture capital.
We conducted a preliminary examination of Zapier in the previous post. I emphasized how well-designed their products’ abstract structures are, giving Zapier a low-cost advantage in terms of product iteration.
We shall then carry on learning more about Zapier’s secrets.
Since its launch in 2012, Zapier’s product update approach has been very stable, and the company has no immediate plans to create any bundled products for cross-selling.
According to Zapier’s most recent pricing page, there are not many product features until 2022. Extensions for Zap include Filters, Formatters, Connections through webhooks, and Custom logic. They only enhance a few of Zap’s flexible configuration possibilities.
Zapier hasn’t undertaken a significant horizontal product expansion in the past ten years, which demonstrates two things.
- Zapier took into account Zap’s potential future growth when defining Zap as the product’s primary purpose.
- Instead of relying on haphazard expansion, Zapier’s growth depends on the in-depth exploration of its main scenarios.
We frequently misinterpret one another:
You believe that the multi-products strategy brings high growth, while in reality, SaaS organizations implement multi-product strategies in response to high-growth performance needs.
Growth is not correlated with the number of products or the number of features. Zapier proved that rapid growth is possible with a narrowly focused product feature. An Atlassian-like successful product matrix is more of a case of survivorship bias.
Frequently, SaaS businesses with slow growth — especially certain SaaS businesses that have raised money — intend to develop new products. They will anticipate that the new product will result in rapid growth but be repeatedly let down following the debut, leading them to introduce a new product. A typical SaaS development death cycle looks like this. If you are unable to create an effective core product, the development will always be a ground-level repetition.
What is an effective core product?
It is, in my opinion: a product that embodies your ideals and generates a consistent flow of orders.
A solid core product must be supported by at least one core function. The most crucial function of Zapier is Zap, which essentially makes the issues solved. All SaaS CEOs truly desire that their product have a number of core functions, but the business acumen and implementation methods need inspiration.
A Zapier Secret: Over a decade, Zapier experimented with two significant product changes. The Developer platform was created in 2014, and Transfer was later added in 2021. Both iterations mean a lot to Zapier.
The Developer platform allows others to create App integrations by themselves. Their apps can be a part of Zapier’s automation.
In the past, Zapier has developed all App integrations by itself, and it hopes to increase the number of App integrations to accommodate additional client use cases.
Every year, Zapier creates a sizable number of app integrations. The number of App integrations has continued to increase steadily since the launch of the Developer platform in 2014. By 2017, due to the well-known reputation of Zapier itself, more and more app suppliers were building app integration with the Developer platform. In 2017, the increase in app integrations hit a turning point.
The creator role of app integration is expanded by the Developer platform. Zapier is highly concerned about a product milestone called the number of App integrations. The amount of new App integrations is positively correlated with the number of teams, but only if they are developed by Zapier’s internal team. This implies that the development of app integration must be linear in the absence of the developer platform.
The developer platform will be meaningless if Zapier’s growth is uneven since there won’t be many app developers willing to work with it. As a result, creating a similar third-party product or platform is a risky endeavor.
The Transfer feature in 2021 marks the second significant iteration of Zapier.
The perception that Zapier can connect to numerous different SaaS and enable data transfer between SaaS has long been present. However, we discovered that a lot of historical data could not be exported and circulated when we used Zap, the foundational feature of Zapier, even though Zap could manage future data flow. This is the sense of deviation between the positioning that product purchasers have in their minds and their real experiences.
Zapier must process the historical data across apps to realize its aim of integrating all SaaS and apps.
Transfer’s fundamental function is not challenging to complete. The tricky part is figuring out how to build it into the original Zap without ruining the charging system. As stated in Zapier’s Transfer description:
What is the Transfer beta, and how does Transfer use tasks?
Transfer allows you to move data in bulk from one app to another. You can pick and choose which data to move and transfer it to any of Zapier’s 3,000+ integrations.
A task is counted every time a Zap successfully moves data or takes action for you. For example, if your Transfer has an action to create new Google Contacts, each contact that is created will only use one task. That batch of 100 records will count as 100 tasks in your account billing.
It can be seen that Transfer consists of continuously executing an identical Zap, but the Trigger is different in that one is a new update and the other is the records. Transfer’s pricing can make use of Zapier’s methodology by using the number of tasks to calculate the price, which is compatible with Zapier’s current pricing model.
Why is there no maximum allowed for Transfers? Many tasks may be counted even if the Transfer is only performed once. Zapier does not impose a Transfer limit because tasks are ‘Pay-by-usage’.
Additionally, we can see that Transfer is included in the Free plan, demonstrating that this is the basic feature of the brand. Your product is defined by its basic features.
These primarily pertain to Zapier products, however for a low-priced SaaS, it can be challenging to turn a quick profit, even with powerful products. As a result, Zapier’s customer acquisition cost (CAC) must be far lower than that of rival companies.
Under the Freemium’s model, marketing is more critical than sales.
In terms of marketing, Zapier has mastered the art of productizing SEO.
In contrast to purchasing Google ads, SEO results in natural search ranking. The higher your page ranks for relevant keywords, the more clicks you will receive. The creation of the landing page’s content is then crucial.
Zapier never talks about contextual functional descriptions in Marketing. It only cares about specific cases.
As Wade Foster (Co-founder & CEO of Zapier) told Indie Hackers:
“Oftentimes what your customers care about isn’t necessarily your company journey. They care about something unique to them.”
Let’s take a look at one of Zapier’s landing pages:
The information promoted on the landing page consists of individual events that customers care about, and those events Zoom and Slack can respond to or be connected to. Additionally included is the automation case for the two apps that customers use the most frequently: Get Slack notification for new Zoom meetings.
As Wade Foster said:
We were the only person in town, more or less, that would offer that. For us it was like: Let’s target people who are looking for certain integrations and make sure they can find us.
We didn’t have to say — “here’s what it looks like, these are the benefits, here are all the features,” and that sort of thing. Instead, people just kind of knew.
What customers want to see is always the use case, not your tirade.
We investigated Zapier’s SEO situation, and it’s believed that it generates close to 3M visits per month, which is much more organic Google traffic than paid search.
Zapier has over 25,000 unique landing pages. How were those pages created?
These landing pages must be produced by software that is automated. Zapier will complete a landing page every two apps. The many automation solutions in these two APPs are entirely represented on one page. Based on APP integration, Zapier can fully create this data. This is the outcome of a landing page that represents structured abstract thought. Therefore, Zapier performs productized SEO.
When researching Zapier, I discovered that Zapier founders Wade Foster, Bryan Helmig, and Mike Knoop were the biggest secret behind Zapier’s success.
Since I don’t befriend these three founders, my opinions are based solely on statements they have made in public. I don’t know their status at work, so here are some of my judgments and inferences about them.
About the strategy:
In 2017, Chartmogul interview with Wade Foster:
In 2018, Hackernoon interview with wade foster:
Retweet by Wade Foster on June 29, 2022:
Wade Foster mentions the number of Zapier app integrations in these three interviews from 2017 to 2022. This clearly shows the founder team’s unwavering commitment to their chosen, and it demonstrates how seriously they took it.
We examine many strategically unsound teams, whose founders may have drastically altered their message from five years prior. As an entrepreneur, you must first be steadfast in doing what you believe, not wavering. Zapier’s strategy is very stable, which shows that the number of App integrations is the direction they stick to the product’s scalable.
I think Zapier’s products are excellent and hope they continue to improve.
Please send me an email (jasperhanlingyi@gmail.com) if you have any questions or suggestions.
The next article ‘Insight: SaaS (47) Company boundaries and Chinese SaaS’ is published. Simply send me some claps and feedback if you enjoyed my article.
