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Interview with David Darmanin, founder and CEO of Hotjar where we discuss launching a SAAS, scaling, creating a buzz and the power of word of mouth advertising. In The Offline Ignition Minute I’ll discuss the “R” in my PEERS formula.
What you'll see on this page...
- Show Notes
- Interview with David Darmanin of Hotjar
- The idea and need behind Hotjar
- On creating a minimum viable product (MVP)
- Listening to the users
- Beta launch vs paid version
- On word of mouth
- On building a remote team
- On funding and financial planning
- My biggest takeaway
- The Offline Ignition Minute
- Show Links
Hey this is Nicolas and welcome to Online Marketing for Profits. This is episode 6. Wow. I can’t believe I’m starting to get into a groove now of recording these episodes. I would really appreciated it, if you do like what you hear so far, please subscribe to the show in iTunes, on Stitcher, on SoundCloud. I’d really appreciate it. That way you won’t miss a thing and you’ll get to get access and get notifications on when I publish a new episode. Basically every week.
Today’s episode is going to be quite different than what I’ve been doing so far because I have a guest on the show. My guest today is David Darmanin. He’s the founder and CEO of Hotjar, Hotjar dot com. If you’ve never heard of Hotjar, they kind of took the internet by storm about a year and a half ago.
They’re basically a feedback and analytics tool that creates heat maps and video recordings and forms and analyzes your forms and can survey your visitors live on your website. You really gather some tremendously important and crucial information about your users, your visitors, so you know what they like about your website and perhaps what they don’t like, what’s not working, so you can optimize it. Make it better and sell more.
Hotjar is a terrific tool. I use it every day. It’s super-easy to install. It’s super easy to use. It gives you valuable insight. To be honest, when I’m working with a new client, the first I have them do is install Hotjar. We get some data that way. We get to learn a bit more about the behavior of the visitors on their websites and what is making them convert and what’s preventing them from converting. That way, I can do my magic a bit better and optimize their website to make it sell more and get them more customers.
One of the most impressive things that they managed to do when they launched is … They were in beta for about seven months and they managed to acquire 60,000 users during that time that were using their products obviously. The big factor was word of mouth.
That’s really what I wanted to discuss with David in the interview so we’re not going to talk about how Hotjar can grow your business using heatmaps and video recordings and funnel analytics. I’ll be doing that in future episodes.
I wanted to pick David’s brain on how they managed the launch of their service and how they managed to scale in a very efficient way with a ver small team. How they managed to create a very good product from the start and shape it by listening to their user base.
The interview was filled with so much good stuff that I slip it into two parts. Today is going to be part 1, and on our next episode of Online Marketing for Profits episode 7, I’ll present to you part 2.
Without further adieu, I guess, here’s the interview. I’ll talk to you after the first part of the interview for the “Offline Ignition Minute” and also I’ll share with you my biggest takeaway from that part 1. Here it is.
Interview with David Darmanin of Hotjar
I want to welcome to the show David Darmanin the CEO and founder of Hotjar. David thank you so much for coming on the show today.
Thanks for having me Nicolas. It’s a pleasure to be here.
Good. I met David about three or four years ago when we were both conversion optimization consultants for CRE which is Conversion Rate Experts. I have to say David really stood out for me because you were a terrific consultant, a well-rounded consultant.
It seemed so easy for you to get wins for your clients. Design winning pages that were out-converting the controls. Most importantly I think you were a great speaker and a great coach. You kind of blew your clients away when they met you for the first time. Taking control of the project and asserting yourself as leading the project. I remember telling myself, “If I can be half as good as David someday, I’ll be all set.” Hopefully I’m there now. Why don’t you kind of introduce yourself and tell us a bit about your journey and how you became the marketer you are today.
You’re being too kind with your words Nicolas. I’d say it was a pleasure to work with you actually. I think we were an all-star team. All of us awesome consultants. We’ve all learnt from each other. I think I was impressed with some of the wins you had, if anything. It’s a pity we can’t mention the specifics but you blew us away quite a few times I remember.
I think our backgrounds are quite similar and it’s great that we had the opportunity to cross roads. I’d say my background is rooted a lot in design and UX. Early on, I always had an obsession to understand how I can measure if what I was creating was good or not. That obsession led me down the road to conversion rate optimization. CRO was, for me, the ruler by which I could measure my work. That ended up bringing me to Hotjar because we’re trying to, again, build another kind of ruler. Another tool that allows you to understand how good what you’re creating really is.
The idea and need behind Hotjar
Yeah. Exactly. As you’re working with clients and doing conversion rate optimization, when did you get that “ah ha” moment where you thought, “There’s got to be a better way,” that led to Hotjar and thought, “I think I have something here.”
Looking back at my background … It’s funny how you kind of realize these things afterwards. When I was really … I was going to say young but that’s not a good way of putting it. Early on in my career there were loads of tools I wanted to use but they were beyond my reach. They were too expensive or you had to be a big enterprise company to be able to use them. Later on, when I was lucky enough … when we worked at Conversion Rate Experts, to actually use these tools I was a little bit underwhelmed by the experience of the tool. The fact that we had to use so many at one go and connect all the pieces together. Being my background is in design, actually building software and quite some time ago, that kind of automatically put me in a position to realize the opportunity.
I’d say the “ah ha” moment was when I realized that clients I was working with who are very sophisticated clients had the same view I had when I was early on in the careers. I started to realize more and more that this was actually a big itch that everyone wanted to scratch. Get rid of.
That was kind of the “ah ha” moment for me.
On creating a minimum viable product (MVP)
It’s funny you say that. I think when I first heard about you setting up Hotjar I thought, “You know it makes so much sense.” There’s a lot of fluff out there and a lot of bloated software. You’re all-in-one really just did everything you wanted to do as an optimization consultant.
I guess that leads me to my next question which is … Being an all-in-one tool, Hotjar has a lot of tools within the tool. You have the heatmaps, the surveys, conversion funnels and all that.
We know that a lot of the big struggle that people have, when they’re starting a service or an e product. is to come up with a minimum viable product or an MVP. The smallest product you can possible that has most of the bells and whistles that you want it to have so that people are attracted to it and start to share and use it. Since Hotjar has several tools within the tool, how did did you come up with the MVP, for the heatmap for the surveys, that would eventually lead to the Hotjar MVP for your first launch?
That’s a good question because it was quite a frustrating and interesting exercise. The first step was to find really awesome developers that I had worked with in the past. I’m lucky to have really kick-ass co-founders. Mark, Johnathan and Eric, they’re like really good technical people to work with.
The first thing we did is we sat down and we said, “Can this be done? Can this achieved?” We spent a few weeks building the base technology because we wanted to do it in a completely different way. We wanted to use cloud hosting. We wanted it to scale horizontally and we wanted to sample it so that we could make it affordable and accessible to everyone.
As soon as we realized that was possible, we started defining the minimum viable product, the MVP. What we did was we basically created a document. This is where my experience was valuable to the founding team in the terms of I could identify what was that twenty percent. The eighty/twenty Pareto principal. Identifying the core twenty percent of every feature that we wanted. What was the core of each feature that was the bare, bare minimum.
At the outset we said, “We have to build something that we are literally ashamed of.” That’s what an MVP is. If we’re happy with it then we should make it worse kind of. No. We should do less.David Darmanin, founder of Hotjar on creating a Minimum Viable Product: We have to build something that we are literally ashamed of. Click To Tweet
We created this document and we trimmed it and we trimmed it again. We trimmed it multiple times to bring it down to the bare minimum. When we did that then we said, “Okay. Of all these features which two should we knock out and do later? Do them coming soon.” It was just really trimming down to the minimum. The reason was I had worked on a couple of projects, other products, before which had failed because we built way too much. I wanted to go really the complete opposite.
Having done that exercise then we started to iteratively build each one one layer up. We do surveys, the core, really basic and then switch to another feature. Do the basic and then re-iterate on each one. We constantly do that.
Yeah. I remember … It’s certainly one of the biggest struggle I think people have out there when they’re thinking about launching. Coming up with way too many features before they find out whether it’s going to be successful or not. I’m sure in your case it was, I think you put it well, a frustrating moment.
You launched without some of the features that you have now obviously. How are you managing to … You’ve launched with your MVP. How did you manage your roadmap after initial launch to come up with additional features. Is that based on all your internal discussions or was there some input from your actually users that you used to map out where you wanted to go next?
Absolutely it’s both. As group of people we all have a history of either growing or building successful businesses so we were constantly thinking, “What really will generate value to our clients?” Right? That’s our vision and we have much more to go. Our roadmap is just kicking off. Then we factor in a lot the input we get from our users.
In fact we don’t even make a distinction because Hotjar is a free tool. We use a freemium model. You can start on a free limited account but then you can scale up depending on how big your needs are. We don’t make a distinction between whether you pay or not. We collect feedback from everyone.
The reason we do this is because we believe that all our users are incredibly engaged. We’ve learned that some of our small free users were actually employees at big enterprise like IBM or PhotoBox and they were then selling it internally.
Okay. Right. Cool.
Listening to the users
We really believe in listening to everyone. What we do is every conversation we have, we process it manually. We use Trello which is an awesome tool. We process all these ideas and they get counted. Then we notice trends. If we see that a particular theme is being requested a lot, we’ll jump in there. We’ll slice and dice it. We’ll speak to the users. Try and understand why they need it. Then that will factor into our roadmap together with our vision. It’s like gelling the two things together. What we want to achieve and what our users are telling us.
That’s terrific because, obviously, you want to listen to what people are saying and you want to keep on course of what you have planned. The two in one, I think, makes perfect sense.
One of the things that I noticed when you guys launched was you were in Beta for close to a year. If I’m correct.
Seven months actually.
Seven months. How did you plan this out? Was that the plan all along to be seven months in Beta before launching a paid version? How did that go in your process?
The original plan was always six months. This was based on an estimate we had. We weren’t communicating this from the very beginning because we weren’t sure if we could actually manage on time. We then extended it by another month because the last feature, which is form analytics, was shipped a little bit late. Although we had tested it enough, we wanted to make sure we had enough time.
Funnily enough I had always been obsessed about running a really nice successful beta program which was really involved the community. In my early years in my career, I worked in a software company and I had read and researched a lot about Beta programs. We had done them but we had never done them really well. It was a personal obsession of mine to actually do a Beta program. I’m really happy we did because, not only did we really vigorously test and collect feedback, we ended up creating an awesome community. I’ve made a lot of new friends from the Beta. Everywhere around the world. It’s quite an amazing achievement from that point of view.
Beta launch vs paid version
Maybe a question I have now is, was moving away from the paid version and staying with Beta for six or seven months, was it because you just didn’t want to have to deal with everything that’s involved with collecting paid monthly recurring payments? Was it more like, we need to fine tune this product first and make sure it works and get rid of the bugs first. Then perhaps move to a paid account? What was that based on?
Definitely the second, fine tuning. The technology we have is actually quite complex especially if you look at recordings and heatmaps. We were quite obsessed to make sure. Obviously data accuracy is really important but too the complexity of all the different browsers and platforms. There’s a lot to consider. We’re very happy that we took this road.
On word of mouth
Good. That makes sense. One of the things that really struck me when I heard that you were building Hotjar … I found out about you because we knew each other and word of mouth. It really seemed like everywhere I turned there was a blog mentioning your tool and your new tool on twitter and all that. How did you manage some of that growth especially in Beta where … Did you have any paid advertisement? Word of mouth … You mentioned a community. How did you grow it so quickly?
I guess the my CRO background helped a lot. It was funny. When we looked at the challenge we had, which is, it’s going to be very difficult to onboard a lot of sites very quickly. We said, “Let’s create some kind of queue program for the Beta.” Ironically what we were creating to limit people on the platform actually, the fact that there was scarcity of it, actually created more interest in it. We jumped onto that and made the most out of it by giving prizes, creating a referral program. Word of mouth was definitely a huge factor.
There was also a paid element to it. When we realized it was so interesting, we obviously wanted to fuel the fire. We ran a few campaigns that basically allowed us to spread the word even faster.
I’d say the referral of side of things, that had a huge impact. I’d say roughly we collected around 60 thousand emails during those seven months. I’d say easily half of them came from referrals.
Wow. That’s a great number. It speaks to how much people like the tool. I remember, now that you mention it. The new homepage you can sign up today. If you got to the homepage right now you can sign up instantly. I remember now that you mention it, a few months back, you needed to get on the list basically to get access. That created scarcity and people wanted it more. Did you also manage … Did you also do that as both a persuasion scarcity tactic but also to manage the growth and make sure that the tool wasn’t crashing on the background because you were growing too fast.
It was definitely more that case. It was more the technical limitations. As I said, the more … It was painful for us. We had 30,000 people waiting to use the tool and we were onboarding them one thousand per week. We were like, “We’ll never manage.”
At the end we ended up … It was more of a technical challenge. Which is great because I actually remember seeing an interesting presentation by Guy Kawasaki. It’s interesting because it stayed with me. He said, “When you’re a start up, you should never be concerned about scale. You should never be putting too much energy up front to build systems and architecture that sustain thousands of users. Your concern should be getting the thousands of users. A startup that has an awesome technology and scales with no users is useless but a startup that has loads of users and huge scalability problems is incredibly valuable.
I was kind of happy that we had managed to achieve the second one.
For sure. It seemed, from the outside at least, that you were going quite fast. How did you manage all of this? You mentioned the four founding members. I’m sure, pretty quickly, you needed to scale that up a bit and hire new people or get new people on your team. How did you … Is everyone based where you’re based out of or are you working with virtual employees spread out around the globe? How did you manage to grow your team in that Beta as the site was growing?
On building a remote team
Hotjar is a remote business so everyone can work from wherever they want. The four … Myself and the other three technical co-founders were all based out of Malta. Funny enough we don’t meet that much because we all have embraced remote. There is another co-founder. Johan was based out of Stockholm. We managed to do the whole Beta program just us five.
Oh really? Okay. Wow.
We were just being extremely lean and contracting externally where needed [crosstalk 00:22:56]
Without any sleep I’m sure.
Exactly. That was part of the fun I guess. My wife will not confirm that. Since then we’ve actually brought on now another five people.
Now the plan is to … Our next round will be bringing in another 10 people. Even though we’re growing fast, the plan is not … We’re more the type of organization that’s proud of how small we are rather than show off by how many employees we have.
That’s great. I love that.
That brings me to the million dollar question which is if I’m going to go through all the hoops and I’m going to set up a service like Hotjar or maybe do an info-product or if I’m thinking about leaving my job and eventually starting a business online, how am I going to survive financially until I’ve achieved success? How did you go at that? Did you manage to get funding? Did you just say, “I’m just going all in and this is how it’s going to be for the next year or so?” How did that process work?
On funding and financial planning
I did a couple of other projects where there wasn’t particular funding. It was just me personally funding them. I look back now and I realize that’s a mistake. It’s good to build a plan and see how much money you need and plan accordingly. That’s a really important exercise.
With Hotjar I wanted to do it different. What I did was I personally kept on consulting and for a few months in the beginning of Hotjar I was billing my hours to Hotjar instead. I also invested myself personally a small amount. One of the other co-founders also matched what I was investing. We put in a nice pool of funds. It wasn’t anything substantial just enough to pay out salaries and promote Hotjar.
When we saw it was doing well we kept it so it’s still private equity. We personally funded the project more. Now we’re at a stage where, given the growth we’ve seen, we’re actually covering already our operational costs. We’re still talking to investors to accelerate growth. That’s hopefully something we’ll come to.
What’s great about that is that I think it’s accessible to a lot of people. You didn’t stumble upon an uncle that passed away that gave you a million dollar to play with. I think it’s something that a lot of people can relate with and can actually do themselves. I think that’s terrific.
That was part one of my interview with David Darmanin from Hotjar. I don’t know if you’re like me. I really enjoyed this interview and I’m taking away a few hidden gems here and there that David spoke of.
In the next episode we’ll be able to listen to the rest of the interview where he speaks about things he thinks they did right in their launch and perhaps a thing or two they’d do over or a bit differently. We’ll talk about domain names. Getting a good domain name and how to go at it. Designing a good and engaging website. Specifically the dashboard where users are discovering your product and playing around with it so that they keep coming back and using it so the word of mouth is very positive. We’ll be discussing all these in the next episode.
For now, let’s break for the Offline Ignition Minute where we talk about your body language as an entrepreneur. When we come back, I’ll share with you my biggest takeaway from this first part of the interview.[Click Here for the Offline Ignition Minute]
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My biggest takeaway
Okay so my biggest takeaway from that first part of the interview with David Darmanin … Here it is. I love how he was able to summarize creating a minimum viable product, an MVP, in such a great way when he said, “Create something that you are literally ashamed of.” I love that because, I think as entrepreneurs, one of the biggest challenges that we have is that we want to give out value. We want to create something that people like. It’s very easy to drift into a sliding slope of always adding more stuff to our offer before actually launching it.
It’s easy to think, “Oh I need to have that. I can’t launch without this. I need to add that too.” I think in my experience, and what David was relating to, that’s really not the case. I think most people could really cut down in half, perhaps even more, the things that they do before launching and they’d do just as well.
The way that David did it also gave him a way to shape his roadmap according to what the community was telling him. He had a plan beforehand of course but then, as the community feedback came in, they course-corrected and added things that the community wanted more than what they thought. I think that’s terrific. I think that’s the biggest takeaway for me.
Even if it’s not service that you’re doing. Even if it’s launching an infoproduct. Even if it’s just launching your own blog and you’re trying to work on it and want it to be perfect before you launch. I think there’s a big lesson there to just create something that you’re ashamed of.
It reminds me of a quote I saw some while ago plastered on the walls at Facebook. It said something like, “Done is better than perfect.” I try to really adhere to that mentality when I’m creating content and I’m working on projects because perfect can really be time-consuming.
This podcast is certainly a good example of this. Sometimes I listen to a few of the episodes I’ve recorded so far and I’d certainly want to go back and re-edit some of these. They’re not perfect. You could spend hours and hours editing a podcast so it’s perfect and re-recording some of the parts so I don’t stumble around the words. Maybe I could say things a bit clearer and all that. At the end of the day done is better than perfect. I’ve got so many of these podcasts that are already recorded. That checkbox in my to do list of things to do to launch a podcast is checked. I’m done with it. That’s it. I’m moving on. Instead of working on perfecting something that’s already done, I’m working on creating some new content and the next episode.
That’s really something that I’m going to take away from this first part of the interview.
I want to thank David again for joining me on the show today. You can follow up what David is working on at Hotjar dot com. That’s H-O-T-J-A-R dot com or you can maybe go through my affiliate link if you want to give me back without anything costing you at Online Marketing for Profits dot com slash hotjar. I really had a blast today. I hope you enjoyed it as much as I did. I’ll see you next time for part 2 of the interview.
If you want to have the show notes, some links to some tools that we talked about, the slides, transcripts and all that, go to Online Marketing for Profits dot com slash 6 and leave me comment. Tell me what you think about the show. If you have any questions.
You can also give me a rating or comment on iTunes. I would really appreciate it. I’ll read every single one of those comments and I’ll respond to them personally. I’m looking forward to hearing what you have to say about the episode and the show so far.
I’ll see you next time on our next episode of Online Marketing for Profits.
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The Offline Ignition Minute
In this Offline Ignition Minute we’re going to talk about PEERS formula again and today’s going to be episode 4 of the PEERS formula so we’re going to talk about the R in the PEERS. That’s P-E-E-R-S. If you’ve missed the pass few episodes, I strongly urge you to back and listen to them. It really is a terrific way, I mean a really, really, terrific way, of creating good first impressions so that people trust you. You show confident and that they feel like they can hire you. They can do business with you. No matter the social situation it’s really, really a good formula.
Today we’re talking about the R in PEERS. The R is for real smile. That’s probably not a surprise to you that smiling is part of this because we know smiling is a very positive cue that we can give out. Typically we smile when we feel happy which is certainly good. It’s really important when you’re meeting someone for the first time, no matter what the circumstance, that you smile.
It shows that you have interest. That you’re happy about the moment and that you’re genuinely want to know a bit more about the other person. Smiling is certainly a key component to create a very good first impression.
“R” is not for smile it’s for Real Smile. The emphasis has to be on the degree of genuineness, I don’t know if that’s a word let’s say it is, of the smile. There’s a big difference between a fake smile, what we often call a social smile, and a real smile. Sometimes we smile because we kind of have to. Someone says a joke and everybody laughs. We don’t get it. We don’t find it funny perhaps but we feel obliged to laugh. That’s a social smile.
You can certainly fake it. We fake it all the time. Maybe sometimes you’re not really in the mood to meeting someone else but you feel like you have to fake it. You still smile. Perhaps it’s picture day at the office or somewhere and you’re not really in the mood to taking a picture. When the photographer says, “Cheese,” you kind of smile. You’re not really smiling because you’re happy. You’re just smiling because it’s time to take the picture. Those are non-genuine smiles.
Non-genuine smiles were first recognized by a French physician called Guillaume Duchenne. We often call the real smile the Duchenne smile. When you’re smiling in front of a camera. When you don’t really feel like it. When it’s a social smile, there’s really one muscle involved in the face. It’s called the zygomatic major muscle which is basically around the mouth. If I ask you to smile right now, and you do it, that’s probably the only muscle that’s going to contract. It expands we create that smiling bottom of the face and that’s how we social smile. We fake it.
When we’re actually smiling for real, when we find something funny or we’re having a good time, there’s actually a second muscle that kicks in. It’s called the orbicularis oculi muscle which is the muscle around the eyes. The best way I can give you an example of this, imagine you are squinting and you’re trying to see someone or something in the distance. Perhaps the sun is getting in your eyes and you’re trying to squint. You’re kind of closing down your eyes and you’ll notice that your cheekbones and all the muscles above the eyes are contracting and making your eyes smaller.
That’s what’s going on when you’re actually smiling for real.
The two muscles will kick in, the major muscle near the mouth and second the the muscle near the eye. For some people, they’ll start to notice what we call “crows feet.” Which is kind of wrinkles around the exterior of the eyes that kind of have the same pattern as crows feet. That’s the sign of a genuine smile.
How can you make your smile better when you’re meeting someone for the first time? Try to fake it. Honestly. I’ve become very good at this because I’ve been practicing a lot in front of a mirror. It seems weird. It feels weird at first but try to actually fake it. Make yourself smile. Think about something funny and make yourself smile at that moment. You’ll notice that your eye muscles, as we talked about, start to contract. This is something you can practice and be good at it. Hollywood actors and actresses are really good at this stuff.
What you’re really trying to do is … When we say “Cheese,” cheese is really not a good word to take a picture. It makes us quote-unquote smile. It makes us social smile. It contracts the muscles around the mouth to the exterior. It pulls them out. That’s not what a real smile is. In a real smile the cheekbones in that area would actually go up. This is what you want to be working on. Don’t say cheese. Cheese is not a real smile.
One big giveaway about a fake smile is if you see the bottom teeth. If you see the bottom teeth, you’re seeing a fake smile. If you see it in someone else. If you see yourself in front of the mirror or in a picture, you’re probably fake smiling. For some people, because of the way that they’re built and all that, they might be genuinely smiling and you can see the bottom teeth. As a general rule you won’t see the bottom teeth for a genuine smile.
Try to move that muscle around the mouth upwards. Try to squint so that your orbicularis oculi muscle is contracted and you’ll be well on your way to having a really, really good fake smile. When you meet people for the first time … It could be a positive situation where you actually smile for real but sometimes you need to fake it. You might as well fake it good. Work on those. Practice in front of a mirror and I’m sure your smile will become much better when you meet someone.
Plus, as a hidden bonus, it will become much better for your pictures when you’re on a vacation. Your family pictures and you’ll start to notice you’re starting to look pretty good in those pictures and that’s certainly a good thing.
Keep practicing and let me know how it goes.
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