Episode 003

Turning early users into super loyal customers with David Darmanin

In this episode, you’re going to learn how to turn your early users into super loyal customers with our very own David Darmanin, CEO of Hotjar. Discover how we slowly gave access to users, collected feedback from them, and created WOW moments.

In this episode, we cover:

David Darmanin is the CEO of Hotjar, as well as one of the cofounders that took Hotjar from an idea to a successful company. Over the years, David has learned the value of putting people first and taking feedback seriously. He’s used this experience to help turn Hotjar’s earliest users into some of the company’s most loyal customers.

In this episode, David explains why he and his co-founders decided to create a landing page for a product that wasn’t even live yet. He talks about the things that he learned from previous startup ideas that failed and the resources that he used to ensure that Hotjar would be different.

Listen to the episode to hear David explain how Hotjar slowly began giving access to early users, eventually amassing around 7,000 users before the product’s official launch. This strategy allowed David and his co-founders to collect feedback, create WOW moments and develop relationships with beta users that continue to this day. David also tells the story of how treating a single beta user like an enterprise client led to Hotjar’s largest customer to date.

Show notes
  • [00:03:08] Who was involved at the very beginning of Hotjar
  • [00:05:32] Why the decision was made to set up a homepage for Hotjar long before the official launch
  • [00:06:10] How David used the experience of past failures when deciding to create the beta program for Hotjar
  • [00:07:36] The book that helped David learn about critical ingredients for a good launch.
  • [00:09:20] The first day David and his co-founders gave access to people who signed up
  • [00:09:53] How David’s idea for a beta program stretches all the back to 2007 when he read a book about beta testing around the time Google was doing their first betas
  • [00:12:27] What happened when the first users started to get access to Hotjar
  • [00:13:50] The WOW moments that occurred when David and his co-founders started to receive feedback from their first users
  • [00:17:34] The types of feedback that Hotjar received from its earlier users, and what feedback David found surprising and interesting
  • [00:21:58] The number of conversations, heatmaps, surveys and polls, and other types of feedback received during their beta testing period
  • [00:22:58] How Hotjar is still getting value today from the data they received from those beta testers several years earlier
  • [00:23:46] Why Hotjar decided that every customer would be treated the same, regardless of how large or small their brand was, and how that led to Hotjar’s biggest six-figure client
  • [00:25:49] Why David believes that entrepreneurs can’t afford not to communicate openly with users you
  • [00:26:26] Resources that David recommends
Resources & Humans mentioned
Transcript

[00:00:35] Louis: Hey, it’s Louis here and in the third episode of The Humans Strike Back. I’m talking to our very own David Darmanin, founder and CEO of Hotjar. In this episode, you’re going to learn how to turn your early users into super loyal customers. All of those learnings come from how David and his four co-founders launched HotJar as a beta back in 2014. If you’ve been following the launch of The Humans Strike Back, you’ll probably spot lots of similarities between the launch of Hotjar three years ago and the launch of this podcast.

What are we gonna talk about, my fellow human? We’re going to talk about what David Darmanin learned from two startup ideas that failed, why he and his co-founders chose to build a landing page before building a product, how they slowly gave access to users, collected feedback from them, and created wow moments, how treating a single beta user like an enterprise level client led to Hotjar’s largest six-figure a year customer, and finally why David still receives––three years after launch—emails from people who took part in the beta.

This episode is really packed with actionable advice to succeed by putting people first. I hope you enjoy this episode as much as I did.

Some of you might have heard of Hotjar before, right? And that might be because of our launch story, the way we managed to get 18,000 people to sign up into our product before it was even live. And the way we got 7,000 people actively using Hotjar before it was even launched officially. That was thanks to a referral program.

A lot of people still think that the reason why Hotjar is today so successful is because of this referral program. But, there's a big but, there is a more human side of the story that we believe is the main reason why, even three years after, we have such an amazing community of customers and fans. And that's something that we are really, really proud of and thankful for. We hope that the story we're gonna tell you now, we hope that this story will inspire you to try and do the same thing in your business, and to apply the learnings that we're gonna give you today.

Let's get started. This story brings us back to September, 2014. That was three years ago when we are recording this episode. In Hotjar, you guys were five co-founders, right?

[00:03:10] David: Yes, five co-founders.

[00:03:12] Louis: Was there any employee at this stage, outside of the five co-founders?

[00:03:17] David: Yeah. Actually, I think it was a little bit earlier than September. I think it was maybe around July or August. But anyway, it's very close. But the reason why I mention it is because I remember that we incorporated around June, and as of July three of us were employed.

[00:03:32] Louis: At this stage, before you guys decided to launch this referral program and make this tool available to people, you basically were working on the first version of the software, right?

[00:03:41] David: Yes.

[00:03:43] Louis: So the five of you, only the five of you, were working on this first version. And can you tell us briefly about the five people?

[00:03:51] David: Yeah. The reason why I remember the three is because actually, I wasn't employed. So for the first six months of running Hotjar, I was actually still working as a consultant and bringing funds from my consultancy work into the company to pay for the salaries. Which obviously is not the ideal way of doing things, because that was frustrating, not being able to work as much as the others.

But yeah, the other guys. We had Jonathan, Vela, who was doing all design work and front end-ish work, CSS and HTML. We had Mark who was doing more front-end dev, Mark from Bergdorf, in terms of how recordings were played and all that stuff. And then the back end, the architecture, how all the data was stored, and then like queried, that was Erik Naslund. And Johan Mamburg is also one of the co-founders, but he was unemployed. He and I were on the side, and when we had time—and we had a lot of time back then—we were talking business and marketing. But mainly marketing, on a tactical level. Like the referral program, and all that stuff.

[00:04:53] Louis: Right. So to summarize, the two of you, Johan and yourself, were more marketing and business, while the three others were more like tech, product, engineering, right? Let's paint this picture again. You guys started to work together, you met from previous companies you all worked for, and you founded, you participated in the salaries of three of the co-founders yourself. You paid their salary. And you guys worked on the first version of the software, and you decided also to have this page that was kind of announcing the early access to Hotjar. So you're already starting to collect emails, right?

[00:05:33] David: Yeah, it was our homepage. Our homepage, we decided, would be one simple page, which was just, "Here's what's coming, if you wanted to sign up."

[00:05:40] Louis: So at this stage, most companies would probably have just launched publicly, after working years, or even maybe five years or so, on the software, until it was perfect. And then launch it publicly expecting this huge wave of people, you know, signing up and all. But this isn't what you've done, right? This isn't what you've done at all. Can you talk me through why you guys decided to launch a beta program, and actually give access very early to users?

[00:06:12] David: Well, there was one practical reason which I mentioned this a few times. I was coming from two failures, right? Two startup ideas that didn't get traction. I wanted to quickly get traction. I had a fairly good idea that this would work, because now compared to the other two projects which were maybe more niche ideas, this was a much bigger idea. In my mind, the challenge was less, "Is this a good idea?" Which was what I had before as a challenge. It was more a challenge of, "Will I get enough people behind this idea?" Which I knew was a good idea that could grow. It was finally, the first time probably in my life, that I got the market aspect right, and I was lucky enough to have the experience to leverage what I had learned so far to make that launch happen.

There was two data points that I used to kind of do the referral program. One was the startup that we worked on before, which was called GuestLab. It was like a loyalty program for retail. This is actually something I've never said before, I think. But it was like a loyalty program, kind of, marketing-automation platform for small, like restaurants and whatnot. And through this software, through this tiny startup that didn't succeed, we learned, because we did a lot of tests about what people liked and what they did in order to get points and refer people and all these things. We saw the power of that.

And then the second aspect was reading the book, which was recommended to me when I was working at Conversion Rate Experts as a consultant, which is called Influence by Cialdini. I know it gets mentioned a lot, but it's a book that probably every marketer should read once a year. Not just marketers, even product people. But anyway, it was this concept of understanding and really getting into my mind the idea of creating scarcity, this concept of giving something for free. And these are all critical ingredients for a great launch. In our case, more of a soft launch.

[00:08:12] Louis: This is amazing, because it is true, David, that I've never heard you saying any of that. The first part, specifically, about GuestLab. So you guys learned, you learned specifically the way people think inside a referral program of some sort, inside a loyalty program, how people behave with points and what is needed for them to move to the next steps, and stuff like this. You had this previous knowledge. You also learned a lot from your consulting gig that you mentioned, and past experiences. But you were a consultant in Conversion Rate Optimization and you learned quite a lot from that as well. And the third resource you're mentioning right now is Influence, by Robert Cialdini.

You had all of that in mind.Instead of working for months and even years on the product, you guys decided, "You know what? Let's improve this product quickly, let's maximize the learnings we can have. Let's show the product, even if it's not perfect, to users." So you have this beta program. You decided to give access to a few people who actually signed up from the early access page to the software. Do you actually remember the very first day you opened the gates? How did it happen?

[00:09:20] David: September 2014, yeah, I remember. I'll never forget that day.

[00:09:24] Louis: Why not?

[00:09:26] David: Well, actually, are we talking about... Yeah. So when we started inviting the first people from the list, right?

[00:09:29]Louis: Yes.

[00:09:31] David: I remember it because we were literally shitting ourselves. Because at this point, we're getting traction, people signing up. I remember in the admin, we had this like graph, where we set a goal. Our first goal was 20,000 people signing up. We had this small graph filling up. So it started to fill up, and we're like, "Okay, we need to start inviting people." That first September was exciting.

But I'm gonna take a step back here. This whole obsession about the beta idea came years before. Again, this is something I've never said to anyone. This is gonna be an interesting session for me. Way back, in 2007, I was working for a software company, I think I've always been obsessed with books, now that I realize. I just started buying any book I could find about the subject matter I was in. I'd never worked in a software company before.

One of the books that I bought, I remember this was the time that Google was doing the first betas, and everyone was excited about Gmail beta, and all these things. I was like, "Okay, so what's in it? Why are they doing this?" I remember buying this book, it was exactly about how to run a beta program. When I read it, it was like, "Oh my God, this is like fucking genius." Like basically, when you think about it, it's the first time any of us learned about the idea of beta—it was quite cool—which is the concept of invite people to use something you've built, at no cost, they take all the risk of using something that is completely untested and just thrown out into the field, and they basically give you feedback for free.  It was like, "Holy shit, people actually do this?" I remember, I didn't manage to persuade my company back then to do it. It was always kind of on my bucket list of, like, I wanted to do that, because I thought it was such a wonderful idea.

[00:11:19] Louis: This is great. This is great. I'm getting further into your mind, David. One day I'll be able to think like you, somehow.

[00:11:25] David: I hope not.

[00:11:27] Louis: Do you remember the name of the book you're mentioning?

[00:11:29] David: No. But it said just like how to run a beta, or something like that. But I'll try and find it.

[00:11:34] Louis: We will find it, and we will add it to the notes inside the article, and we'll make sure to mention every single resource that we are mentioning in this episode.

Let me take a step back a little bit and say this was clearly a very nice idea to show that to people, to get early feedback. But a lot of people, as I said, in production think that the reason why Hotjar is Hotjar today is because of this smart referral program, where people could win prizes when they referred their friends and colleagues. But this isn't really the only reason. We feel actually that there's a more human side to it that is much, much bigger than all of that. And you started to hint about it.

Let's take this first day. You were literally shitting yourselves. You're already scared of what you were actually about to do. Do you remember how many people you opened the gate to? Like, how many people did you give access to the first day?

[00:12:28] David: I think we started with like five, because we were really scared.

[00:12:32] Louis: Wow, you were really scared. I was thinking 50, but 5.

[00:12:36] David: No, no. We started with five.

[00:12:37] Louis: Okay. So what happened? You sent it to five, then what happened?

[00:12:40] David: A couple of them signed up really quickly. And obviously we're all like ready on Intercom. Everyone was like ready to observe things. Like, "Okay, they're cruising the heatmap, yay." We were ready. Instantly we got a good vibe, because when they joined, they're like, "Yep, we like this. This is cool." The general idea was there are some things that need to be improved, but we'll have it.

This is the part where we had the Trello board ready, and we started jotting down every idea that came in.

[00:13:13] Louis: This is it. You started to say it. That worked really well, the referral program, or the beta, opening the beta worked really well. But the mechanism that we really want to talk about today, and the core of this story, is that you guys communicated with users very openly. You guys accepted feedback. You weren't like, "This is the product. You have to use it, and that's it. We don't want to hear from you." You more than welcomed the feedback back. You gave access to beta, people could reply, people could really talk to you, and you made a point at replying to every single people who sent emails, right?

[00:13:52] David: Yeah. Essentially, it was me, Jonathan, and Johan. We were like full time on Intercom, just replying to everyone. I remember the loop kicked in quite quickly. I think someone asked, suggested something, like because then obviously we didn't stay at five for a very long time. Then we're like, "Okay, this works, let's invite another 10."

But still, we were quite slow to bring in people. But I think very early on, someone recommended something, we were like, "That makes sense. We should have done that." And we did it. And then we reached out like, "Yo, we did it." And they're just like, "What?" They're like, "You already did it?" That's fucking insane.

We noticed that they were using words like, "Wow," or "Awesome," and we're like, "Hold on, there's a wow moment here." This is the point where we said okay, let's really take this seriously.

It's interesting, you know I jump around a little bit. The co-founders, we're all achievers in our strengths. I think this was a kind of good combo that we got our rewards when we did something and we're like, "Hmm, we want more." You know what I mean? So we're like okay, this Trello board, we put in all the ideas. We were trying to figure out how we were gonna hack Trello so it tells us what are the important things, but we can also go back and then tell people that we did something.

What we did was we figured out that the URL of Intercom is kind of a link directly to the conversation and to the person, so we copied the URL of Intercom, and put it as a comment in Trello, because Trello, for a card, shows you the count of comments. So then we know how many people have voted for something with the Intercom URL.

[00:15:41]Louis: Wow.

[00:15:42] David: And then when we ship something, we'd open all those links up in a browser, and go in, and speak to everyone and tell them that we did it. This eventually stopped when we had Trello cards with like 1,300 comments.

[00:15:56] Louis: Yeah, but this is the beauty of it. You welcomed the feedback, and to summarize, you used Trello and the Trello board to collect the feedback, you used Intercom to communicate with users. You obviously had Erik, Jonathan, Mark working hard to make the changes. I remember talking to Erik recently where he said that basically as soon as you had something, a suggestion, a bug, boom, you guys were just fixing it straightaway. That really started to create this two-way communication where people were saying, "Wow,” as you mentioned.

That was kind of the first ingredient of the story we wanted to share with you today. This is kind of a very human way of thinking. It's not about hacking your growth through referral programs, it's about talking to people face to face. Not face to face, but almost face to face over Intercom, and getting their feedback, right?

The second thing that I found to be extremely interesting, which I think you guys would also find interesting, is you started to communicate with the beta users weekly, right? You used to send an email weekly to those people.

[00:17:00] David: Yes. Every week, I would summarize what we've done, what we were excited about, what challenges we had. And this was extremely effective. Probably a pity that we stopped doing it, but that's the problem when you become CEO of a relatively bigger thing.

[00:17:16] Louis: Right. Before we talk about the type of things you were saying in these emails, just quickly, do you remember any type of feedback that you guys got from the conversation you had that really, really surprised you? That was completely outside of what you were thinking Hotjar was, or Hotjar was doing?

[00:17:34] David: I don't even know where to start, there were so many. We were doing two things, first off. This was quite a lot of work, right? We were emailing anyone who was in the beta, participating in it. Every week, we're bringing in more and more people. We automated onboarding emails, and then I was emailing every week people in the beta to tell them what's happening, what we did, and also just a link to the product roadmap where we list down what people are mainly asking for, based on the Trello board. This is what we're gonna fix based on the Trello board. Which is again, very human, like as you described, a very human way of approaching it. "Here's what we're doing, here's what you're saying, here's how we're gonna get it done."

I was very aware of these thousands of people waiting in the lists, and getting impatient, and getting pissed off. I was also emailing every week, like we were thinking, like, "Let's get into the head of these people." They're gonna be pissed off because people are gonna be saying, "We love Hotjar. This is cool." I was emailing also the people who are still waiting, every week reiterating why they have to wait, what's happening, what they're doing, and why it's worth the wait, and why what they're gonna get is kind of better.

There are two sources of things that were coming. The people waiting were pissed off, and we found just saying, "Hey, we know. We get it. You're right. It's horrible, however we've taken a note, and when we open up again, we'll keep you in mind to kind of try and give you a spot." It was just managing that expectation, and just replying to people.

And then on the product side, we had first off a lot of ideas which were kind of not necessarily big, but there's like aha moments, or maybe like oh, shit moments, where like how did we not think of that? An example could be just technology, the way something was being rendered. I remember we used to have very often these moments where we'd say, "See? See how it's important to just listen to one user? Because this problem is actually being experienced by many people, but no one is reporting it." We realized that it's dangerous to rely only on the numbers, but there is some quality in kind of sometimes listening to just specific users say something specific, which highlights a big problem.

But I'd say, resoundedly, like the most interesting experience we had with this whole back and fro communication, was first off we realized because we were speaking to people so intently, that they were agencies. We could have easily not even realized that they were a lot of agencies. Back then it was half half. Half agencies, half in-house.

And then it crossed my mind, we really don't know how these agencies want to use the product. So we’re like, "Let's use Hotjar.” We have an opportunity to use our surveys. Let's send out a survey to agencies... First things first, we said, "Okay, let's ask people whether they're agencies or not." We quickly changed the signup process to say, "Are you using Hotjar with clients, or not?" We also popped up something for existing users to say, "Are you using Hotjar with clients or not?" So just we cleanse out the whole database, get everyone into the right bucket.

And then we sent out the survey asking, "Who are you? How many clients do you have? How do you want to use Hotjar?" And I'll never forget, the biggest learning curve for us here was we assumed that they would want the client to pay for Hotjar. But instead, they wanted to pay for the client using Hotjar, because they wanted to bill for them. And this had a huge impact on the way we billed Hotjar going forward.

[00:21:15] Louis: Right. This is amazing insight, as we can hear, er even see. To take a step back, the way we communicated with users from day one, literally from day one, really brought us clarity, avoiding making mistakes in building the product, avoiding making assumptions. And also, I believe, building trust with those people. Because when you wow them, when they spend their time testing a product saying, "Hey, this isn't working," and they receive an email an hour after saying, "Hey, this is fixed," this is how you create long-time fans, and long-time customers. This is absolutely amazing insight.

Just to summarize a little bit the impact that this program had, this beta program had, it lasted seven months. You guys had 6,646 conversations.

[00:22:09] David: Yes.

[00:22:10] Louis: 43,000 plus heatmaps created, more than 12 million recordings created, and more than 424,000 polls and surveys. All within seven months, all within from people who were just happy to help out testing a product, using it, getting value out of it. I think this is really something that we can all take away as the story, as the overall story, to communicate with users with your people, to care about what they have to say, because in return it might really create...

[00:22:41] David: You get a lot back.

[00:22:42] Louis: You get a lot back. Let's talk about today, actually. The consequences of what you guys did three years ago is that we’re still getting the rewards out of it. How many customers do we have now? How many sites do we have now set up on Hotjar?

[00:23:02] David: 16,500 customers, over that. I think we're around 300,000 sites sending data to Hotjar, which is impressive. Just today, I got an email directed to my inbox, and I receive these quite often. Today, I got an email saying, "Hey, it's from this brand. I've been with you since the beta days," I get this a lot. "We've been with you from the beta time. I just changed jobs. I brought Hotjar with me. We're consolidating, who can we speak to about setting up an enterprise account for the whole business?" We get these quite often.

[00:23:42] Louis: So if there is an example of the value and the power of doing such a thing, this is it, right?

[00:23:47] David: Yep. I’ll add one more thing, actually which is also another interesting story, which is the power of this human connection, right? Which is something I really, really believe in. I think the author of Delivering Happiness, I forgot the name, the CEO of Zappos, she goes into this thing about the power of human connection.

We, early on, decided that we would treat everyone joining Hotjar in the same way. Whether you're from a big brand, or a Gmail address, we decided we'd never make a distinction. In fact, we realized that this communication with our users was so powerful, it was generating so much kind of connection with us, that I actually wrote an ethos, which is like a list of commandments of how we treat our users.

In it, we said our users are our gods, which might sound extreme, but it's simple. Our existence depends on them. If they hadn't taken the risk—they risked their jobs, their time, their money, their resources—to use us, so they are our creators. It's a very humble way of thinking, but it's this thinking which actually landed us, until today, our biggest customer. Someone who worked at our biggest customer, they're so big we're not allowed to use their name.

[00:25:04] Louis: That's how big they are. Literally.

[00:25:06] David: Yeah. But they pay us six digits, and they have over 1,000 users in their Hotjar account. Again, something I've never said before, this story. This person who brought us into this business joined in the beta with a Gmail address. We treated this person as if they were an enterprise. So, yeah. It works.

[00:25:32] Louis: Two examples of the power of connecting with people, and caring deeply what they have to think. How would you convince people who might be very inspired by what you're saying, but might be still scared of actually being this vulnerable and opening up this way, and communicating openly with users, or people in general?

[00:25:49] David: I'll say it simply. You just can't afford not to do it today. If you wanna fail, don't do it. Someone else is gonna do it. So you have to, you cannot afford not to.

[00:25:59] Louis: You mentioned resources throughout the talk, throughout this episode, that might be useful for people who want to pull this off, who want to do the same thing. You mentioned Intercom, Trello, you mentioned the book Influence from Robert Cialdini. You mentioned this beta book from Google that we will give you details in the article, and in the description. Are there any other resources you would recommend?

[00:26:27] David: Definitely. On this specific topic of interacting with people, and the importance of the service aspect of anything that you're building, I highly recommend reading Selling the Invisible, which is a great book. And also Purple Cow, I think, even though it's not directly related to this. Having read that book, thank you Seth Godin, it just allowed us to identify these opportunities which is visibility in our industry. Most people provided shit service, right? The fact that this was working well for us, and then the fact that no one else did it, that's a huge opportunity. Let's face it, we're really raising the bar in terms of expectations, right?

But it all comes back to these wow moment. It's learning, and then creating wow moments. To me it's those two things. Feedback, and exceeding expectations. Think about it, when was the last time you called a service provider, like your ISP, right? And they replied within five seconds, and you're like, "Wow. They actually did what I wanted them to do," right?

[00:27:35] Louis: Never.

[00:27:36] David: It's all about exceeding the expectations you have from a brand, and that creates a very memorable moment.

[00:27:43] Louis: Well David, thank you so much for sharing all of those small stories within the story. You can learn more about this actual story that David wrote about in the Hotjar blog post story, part one. You can just Google that, Hotjar part one, and you will find it.

Thank you so much, once again David, for your time.

[00:28:01] David: Pleasure.

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