Breakout Startups #17- Zapier
The tool helping you automate all the things
“If you join a company, my general advice is to join a company on a breakout trajectory.” — Sam Altman, President at Y Combinator
In this 17th Edition of Breakout Startups Memos, we are covering Zapier, the tool helping you automate the boring parts of the job.
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About Zapier
Brian and Wade first met playing music. Brian is a bassist and Wade was a saxophone player who played in blues and jazz quartet around the town. The duo soon realized that they had a passion beyond music- Web Apps.
They used to hang around in Online Product forums of Basecamp, Dropbox, and that’s what very much led them to think about building such a product. And then, one day, Bryan. the upcoming CTO of Zapier sent a text to Wade, the forthcoming CEO and that’s how Zapier was conceptualized.
The duo went ahead and recruited Bryan’s friend, Mike Knopp, who went on the become Chief Product Officer. The team then built the earliest prototype of their product in just two days at a Startup Weekend event in Missouri. Encouraged by the feedback received at the event, the three decided to pursue their idea further.
The team then applied to Y Combinator where the famed accelerator rejected them first which rejected them first and then accepted them later on.
Soon after this, Zapier officially launched in June of 2012, offering integrations with 34 apps.
Finding The First Users
To attract the first wave of customers, the team would spend hours in customer forums for companies like Basecamp, Salesforce, Dropbox, and Evernote where people were asking for features such as “What if X could work with Y”, “I would use your product if it integrated with X”.
Then, Wade would get in touch with these users and setup workflows for them on Zapier. It took the team 8 months of reaching out to customers before the first inbound request of an app integration came in.
Since then, the company has grown strength to strength. Between 2016 and 2018, the Company’s ARR grew from approximately $10 million to more than $50 million. Today, the tool boasts of more than 3 Million Users.
One incredible thing here is that Zapier hasn’t raised any funding other than its seed round of $1.3M in 2012. The company first achieved profitability in 2014 and has been profitable ever since.
Product
As Wade Foster, CEO of Zapier, explains the product,
I generally talk about Zapier as like a workflow automation platform. Hooks into about, I think we’ve got 800 different apps now, so you know, tools like Salesforce, Slack, Google Apps, MailChimp, Stripe, you name it. Like if there’s a SaaS app out there, it’s probably on Zapier at this point in time. And then like you said, you can set up these little rules that automate pushing data between various apps. And it really does help you, you know, speed up time, automate kind of the mundane work you’ve got going on, and you can end up building some pretty cool stuff with it.[Source]
Currently, Zapier integrates with more than 1500 apps out there. And people are using the product to automate the tedious parts of the job, organize resources, set up integrations, and even run their entire companies.
Team
Wade Foster- Co-Founder & CEO, Zapier Inc.
Mike Knopp- Co-Founder & R&D, Zapier Inc.
Bryan Helmig- Co-Founder & CTO, Zapier Inc.
Jonathon Rochelle- CPO, Zapier Inc.
Jenny Bloom- CFO, Zapier Inc.
Kristina Kemmer- Engineering Director, Zapier Inc.
Vicky Volvovski- Senior Director of Product, Zapier Inc.
Investors
The remarkable thing about Zapier is that the company hasn’t raised any other money than its seed round in 2012 and has been profitable since then.
Bessemer Venture Partners and Draper Fisher Jurvetson led the company’s seed round with angel investors such as Cindy Bi of Zillionize and Kevin Hale, Founder of Wufoo.
The company was also a part of the Y Combinator Summer batch of 2012.
Market Landscape
Zapier is easily the market leader when it comes to workflow automation software automation industry. The product is growing faster than ever with more than 3 million registered users**, up from 2 million in January 2018 and one million in May 2016. Annual recurring revenue has also grown by nearly 50% since January, from $35 million to $50 Million**.
That’s not it. Given, how the No Code Revolution has been showing signs of growth in the past 18 months, Zapier is easily poised to reach all the makers.
In response to a tweet by IndieHackers, many people responded Zapier as one of the tools in their No Code Stack and it shows how popular the tool already is in the community.
**- Last publicly available estimate, the number can be higher.
Competitors
Zapier was a pioneer in the Workflow automation software industry. Before this, we didn’t have any product and people used to hire developers for the work. Nowadays, we have a bunch of companies that are giving competition to Zapier in the domain.
Some of these companies are:-
- Parabola- An alternative to Zapier
- ActionDesk- Build powerful automation with your spreadsheet skills
- n8n- Open Source alternative to Zapier
- Tray.io- Less known alternative, Very similar Product.
- Microsoft Flow- An automation tool by Microsoft
Along with this, there are a bunch of tools who are focused on automating workflows for developers.
Given the current trends, it won’t be wrong to say that the workflow automation market is going to be one of the most competitive markets in the coming days.
Strengths
Zapier, due to its early start has a ton of advantages in the space as compared to its competitors.
- Loyal and Growing Userbase
Zapier is one of the darlings of the tech community. The product doubles up as a productivity tool, mailing list integration enabler, or whatever you can think of building on top of it using your existing apps.
The company recently launched Zapier for Companies which is used by companies such as Outbrain, HackerOne, Typeform, and several others.
2. Rapid Growth
The company has moved rapidly to capture the market size after getting initial product-market fit. Currently, the company boasts of more than 3 Million users.
The number can grow to more than 10 Million in the coming years if the company does things right in the coming years as No Code Revolution kicks in. The company has definitely shown that it has the potential to grow fast in the past few years.
Weaknesses
At this point, Zapier is arguably the leader in the Workflow Automation Software space. However, going ahead, as the No Code movement speeds up, it will be interesting to see how the company caters to that audience.
The company can potentially increase its revenue by 10x if No Code movement speeds up and the company can get a front-row in the audience along with companies such as Webflow, Airtable, and other emerging ones.
User Community
Zapier is one of the most loved products in the tech.
See below 👇
100% Remote
Zapier is 220 people strong and is fully remote. The company was sponsoring $10000 for its employees to move out of San Francisco.
