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How do you get to this first million in revenue? And what does the journey past 10 look like? That's what Steffen from Synthesia shared with us.
In the episode, we got into:
***
In the episode, we got into:
- (00:00) - Introduction
- (02:28) - Meet Steffen
- (03:47) - The backstory
- (09:58) - The first million (service revenue)
- (14:27) - The first first million (subscriptions)
- (19:11) - Getting to $10M
- (23:21) - Viral loop
- (30:34) - Enterprise early
***
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That's why Growblocks built the first RevOps platform that shows you your entire funnel, split by motions, segments and more - so you can find problems, the root-cause and identify solutions fast, all in the same platform.
***
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Creators & Guests
What is The Revenue Formula?
This podcast is about scaling tech startups.
Hosted by Toni Hohlbein & Mikkel Plaehn, together they look at the full funnel.
With a combined 20 years of experience in B2B SaaS and 3 exits, they discuss growing pains, challenges and opportunities they’ve faced. Whether you're working in RevOps, sales, operations, finance or marketing - if you care about revenue, you'll care about this podcast.
If there’s one thing they hate, it’s talk. We know, it’s a bit of an oxymoron. But execution and focus is the key - that’s why each episode is designed to give 1-2 very concrete takeaways.
[00:00:00] Toni: Hey everyone, this is Toni Holbein from Growblocks. You are listening to the Revenue Formula. In today's episode, Mikkel and I talk to Steffen from Synthesia. Steffen shares how Synthesia reached their first million and how they went past 10 million ARR with 50, 000 customers. Enjoy.
[00:00:22] Steffen: What is. the weirdest
[00:00:23] thing about Danes, Toni?
[00:00:25] Toni: Um, they're all called Rasmus. I think this is one thing. Um, I think this is one thing.
[00:00:31] And then the other piece
[00:00:32] is, you know, what, I've been living here now for 12 years. I don't think It's it's, it's all, it's all straightforward for me now. It's like, maybe it's weird, but, but, but took me a while
[00:00:40] to kind of
[00:00:40] understand, you know,
[00:00:41] if this, uh, uh, Cari Sil, Sil Cari or something
[00:00:44] like, this, uh, the, the Cari
[00:00:47] Mikkel: Sil, oh, Curry herring.
[00:00:48] Okay. Yeah.
[00:00:49] Toni: Great. Okay.
[00:00:50] You know what? The worst thing is the pronunciation of everything you, you say here. Um, But that that is a traditional Danish dish is kind of funny, right? So curry from India, but as additional Danish
[00:01:00] dish, I was like, that's kind of weird. But tastes fantastic. I love it. Once the first time you taste it, you're like,
[00:01:07] And then it's an acquired taste afterwards. You don't
[00:01:09] Mikkel: have this thing like
[00:01:10] where so everyone has these weird pet peeves. For me, it's like people standing still on the escalator.
[00:01:16] I could just not I cannot deal with it. You don't have any of those you've kind of spotted.
[00:01:21] Toni: I don't know. Okay, great. But Steffen, what's, uh, what's weird about the UK? You've been living there now for a while.
[00:01:29] Steffen: Obviously driving in the left side of the road is probably the most obvious one. Uh, but yeah, no, it's uh, it's a great place. It's, uh, it's much bigger than Copenhagen. You can get lost, uh, a lot of different places here. And it takes almost the same time to drive across London as it is to drive across the entire denmark.
[00:01:47] it's not that British. It's very international, right? It's not, uh, not too many British
[00:01:51] people in London itself, so.
[00:01:53] Mikkel: And also they're not that friendly towards bicyclists. We have a lot of those
[00:01:56] Steffen: not. They're getting better. They're getting better. I bike to work here as well. So I'm trying to, uh, not get killed on my way back and forth,
[00:02:05] Mikkel: Do you have a life insurance?
[00:02:07] Steffen: uh, not yet.
[00:02:10] Mikkel: So the thing is, you can't comment on that. No, no. That's true. Last, last time I was in London, a cabbie legitimately hit a bicyclist while pulling out from a parking spot. And what did the cabbie do? Ran out of the car and yelled at the bicyclist. Okay, I want to, I want to get out now. Okay. So segue from there.
[00:02:28] So I mean, if you have a guest yet, we have a guest, we have a guest here. So welcome Steffen. Uh, thanks so much for joining. Uh, your COO. CFO and co founder of Synthesia. And I kind of decided to just, uh, dumb down what it is you do. And I was just like, well, you make video without a camera.
[00:02:46] You just write text and then bang, you have video. That's kind of the, the simple version, right?
[00:02:52] Toni: Big use cases. Uh, I think sales enablement, uh, or in general enablement, right. Kind of teaching people stuff, right. Kind of, there's a massive use case that you sell to, um. Um, any kind of company, but predominantly large business, right?
[00:03:05] Kind of enterprise motion is, is, is the biggie here. Yep. I mean,
[00:03:08] Mikkel: maybe we could use them for some of the demo videos we are recording, because our talent usually messes up and then we just script it out. I was waiting for that. I was waiting for
[00:03:16] Toni: that. That would be brilliant. One, uh, factoid we have here, you have more than 50, 000 customers. So we're talking 5 0, thousand customers, which is pretty, pretty insane. Right. And, and the thing we wanted to talk with you about, uh, uh, Steffen is, um, and you know, I'm quoting you here now is the six year long overnight success story.
[00:03:41] And let's kind of unfold that a little bit and, and really hear the story and kind of go through the different stages of it.
[00:03:47] Steffen: Yeah, sure. Thanks for having me on, and, uh Great to be here. I have to share a little bit about the backstory and kind of some of the untold tales of, uh, of Synthesia here, but, uh, but Yeah.
[00:03:57] we started the company now six and, and, and a few months ago, uh, here in London. And I did it together with Victor, my co founder And two professors that was kind of pioneering the space at the time, uh, within kind of computer vision and computer graphics And kind of AI starting to really kind of you know make things happen
[00:04:16] It all kind of stems in spirit from this kind of research paper from Stanford University, where Professor Matthias Niesner, he for the first time showcased how you can update and change video after the fact.
[00:04:27] So when a piece of camera recorded content comes off camera, he could actually kind of showcase a kind of glimpse into how we can actually update that, right? And, uh, when Victor and myself saw that, it was just an incredible kind of glimpse into the future of content creation. Uh, we had no idea the tings and turns and twists on the, on the journey since, but, uh, it was magically enough for us to kind of quit our jobs.
[00:04:51] I was, uh, I was working in africa at the time, so working at a regional private equity firm, investing and operating local businesses in, uh, in, in Africa. Not too many generative AI companies at the time, but, uh, but definitely, uh, A very kind of fun time of my life and Victor, he was, uh, he was at london. He had moved over here for a few years ago and, Uh, he wanted to build something more deep texts, something more sci fi, and, uh, this was definitely kind of up there of kind of crazy thing we could spend our lives on.
[00:05:21] And, uh, we went to, to India in, uh. 7 day kind of drinking. I invited him over there for a schoolmate of mine that was getting married. And we decided to quit our jobs and try to pursue this crazy idea of kind of, you know, changing how video is being produced. And that was some of the kind of the early days and kind of the kickoff of Synthesia.
[00:05:41] And, Um, because we have been working in the startup ecosystem in Copenhagen, I've been working in finance in Africa. We thought it would be So easy to go out and kind of, you know, raise some capital because look at this cool research paper And, two like accomplished business guys, right, with, uh, with a tie coming in. And, uh, that took a few months and, uh, and a lot of rejections to kind of realize that, uh, two business guys with a very, very deeply technical kind of vision is not really something that sells. Especially back in 2017. Uh, so that was, uh, that was kind of really fun or not so fun to kind of just realize that we actually didn't know anything, uh, before we got like, I think over 80 different rejections.
[00:06:27] Uh, but then there was like, um, as you do, right. You kind of try a lot of things and you email a lot of different people. And, and one of them was, uh, was Mark Cuban that I reached out to, uh, that summer. And a few hours later, he actually responded to my cold email where, uh, where he was just interested in kind of learning more about the technology.
[00:06:48] And he actually also signed up on our just like, you know, blank website, just a logo and contact form. There's nothing, anything about it. And he actually signed up there. It's the first one on our website and it was just like, Victor was sitting in front of me like, why are you pranking me, dude? Like, and it was like, no, it's for real.
[00:07:06] He's responded to my email. And then we were like for five, uh, for 13 hours back and forth, just, he was DDing us just on email. He doesn't take phone calls. He doesn't do in person meetings. So he's just DDing us over, over, over email for us. 13 hours. And then three in the morning, he was just like, okay, assuming you pass DD I'll invest a million dollars.
[00:07:28] And that was just like a pretty crazy kind of, you know, Eurika moment and setting an offs to the races. Um, Uh, so, so that was fun on the 23rd of August, 2017.
[00:07:40] Toni: that is insane. That is insane. Like legitimately insane. So I've, uh, I, for some reason, I heard that Mark Cuban was kind of part of the captail, but I didn't know that that was the story behind it. And so early on and basically the first one. So also kudos to him. Right. And then what I almost think is even more, I'm not sure if it's.
[00:08:01] You know, funny or, or interesting is it was basically just a chat. You guys just said an email chat
[00:08:09] Steffen: Yeah.
[00:08:10] Toni: and that's how he got through the, uh, what is it? The, the shark tank, uh, kind of process there. Right.
[00:08:17] Mikkel: Nice. Just less entertaining for people watching, I guess, because it was, Yeah.
[00:08:22] So you said you dealt with a lot of rejection and we'll, we'll get into the subject matter in a second, but I'm just curious. Yeah,
[00:08:28] I guess motivation at that point in time, what did that look like? Was, were you kind of about to run out of energy on that front or what, what did that look like?
[00:08:36] Steffen: it was definitely getting stretched, right? So we spent all our money kind of funding our lives in London. It was not that we were living anywhere fancy. We were living together for the first three years, Victor and myself as well, to kind of save money on the housing front. But, uh, we were kind of starting to kind of deplete a lot of our kind of savings at this point.
[00:08:56] And we're also funding a
[00:08:57] PhD student that was kind of building some of the prototypes in the back from our own money as well. so it was a little bit crazy, but, uh, actually what helped us and actually saved us was a little bit of our Bitcoin investments where, you know, the, back half of 17, it was like spiking up with the, Ethereum and Bitcoin.
[00:09:15] So that was actually also giving us runway to actually kind of see this a little bit more extra through, uh, because we got like, uh, that kind of email with Cuban and he has never invested outside the U. S. So there was a lot of like legal red tape to kind of get through. So we only kind of received the cash in October.
[00:09:32] So it was a pretty kind of long stretch where we're kind of, getting pretty close to, and I think I was in minus on all my accounts when we actually got the funding and started to pay us a very like tiny salary. but uh, but I have a screenshot of all my bank accounts where it has like minus on it, which is also pretty funny.
[00:09:51] Mikkel: Okay. So, and then you woke up the next day and it was a success, obviously. Yeah. Right. That's so in the know. This is how it
[00:09:57] Toni: always works.
[00:09:58] Mikkel: This is how it always works. So I, think, um. What we wanted to hop into first is really then from there to the first million. How, what was that jour? What was that journey like for you?
[00:10:09] How did you get there, uh, and get that initial kind of traction in those first customers.
[00:10:14] Steffen: Yeah. So we obviously, uh, a pretty odd story in the sense that we kind of started with the solution
[00:10:20] in a sense, right? We have seen this kind of research paper that could do a certain thing.
[00:10:24] But we didn't really kind of come from the other way, which is typical. Oh, I have this problem now,
[00:10:29] let me develop a solution or prepare a solution to kind of, you know, solve that problem,
[00:10:32] right?
[00:10:33] So we kind of coming from the other angle where we have something that's looks and feels magical, but
[00:10:38] what can it actually solve? Right.
[00:10:40] So the first three years was just crazy kind of wilderness period
[00:10:45] of the
[00:10:45] company, right? Where we go around
[00:10:47] and speak to literally anyone and everything that wanted to kind of have any.
[00:10:52] inkling of kind of context that
[00:10:54] might this be relevant. So we went into the rabbit hole in a lot of different kind of categories from high end visual
[00:11:01] effects, to movie production, to creative industries, to influencer marketing, to game engines, to game studios. So I think these first three years, even though that there was probably the most painful three years of our lives, it was just really giving us so much more conviction.
[00:11:21] Once we actually have the scalable product that we actually knew what to go after, because we have learned so much about the entire kind of universe of content creation, that it really gave us the resiliency and the conviction to really trust, okay, here's actually the segment of the market that we needed to target.
[00:11:38] And that, uh, I think. We might have been successful without these three years, but it definitely set us up to not be distracted along the way with other kind of cool things we could have done. And I think it really formed this kind of saying that we have, where we, we can obsess around kind of utility over novelty, where there's a lot of kind of cool, one off things that you can do with the innovative technology.
[00:12:04] But it's just not a recurring business that you can kind of really build a big software company on. Uh, so, so, so it gave us a lot of that kind of, I know, fundamental understanding of everything or kind of all the different areas of the market and what was actually ripe to attack, uh, and
[00:12:20] had that conviction to trust that was the Right. thing when we actually got to a scalable product.
[00:12:25] But I think it
[00:12:25] took us a year to really kind of
[00:12:27] get something we could sell. And we
[00:12:29] always, me and Victor, I think if you look at most deep tech founders, they are like three, four
[00:12:34] PhDs that has never kind of sold anything in their life. And we had
[00:12:38] obviously kind of this startup ecosystem, uh, background, growth hacker mindset.
[00:12:42] And we wanted to kind of, you know, test as quickly as possible and validate. And go in the market, even if it was a very kind of broken kind of offering. Um, so we kind of managed to sell actually, I think for around, maybe sub 1 million of kind of service kind of revenue where we kind of applied this much more handheld.
[00:13:01] It was kind of one off, it was kind of, you know, experimental type of innovation budgets. Before we had kind of the scalable offering that you know as Synthesia today, which is kind of this platform where you go and type text and it kind of generates videos. But it took us three years to actually get to the software product before that.
[00:13:18] We launched that in summer of 2020 and it took us six months. So from August till December to kind of hit 1 million ARR. Uh, and that was just Insanely magical when you kind of have been spending three years just hammering every door down and selling like one off offerings for $2,000, which have like a profit margin of negative 200%, right?
[00:13:45] To kind of go in and just see random people you've never heard or spoken to kind of sign up and pay for your offering was just incredibly magical, right? And that was kind of the first off to the races in summer of 2020. I
[00:13:59] Toni: how did you get those first million, right? I mean, you say like you had, uh, obviously work up until then in terms of service revenue, but that doesn't necessarily mean that this was the same way you then acquired the, the product customers, right? So what was, what was the, the motion?
[00:14:16] What was the tactic? What was the thing that. You know, at least, you know, maybe looking back, maybe it was different when you were in it, but looking back that contributed to getting you to the, to the first million.
[00:14:27] Steffen: think, I think when, I love the saying, when you build like a hard, it's easy to build a
[00:14:32] hard company and it's hard to build an easy company, right? In the sense that when you build something that has never been done before, when it's like, Truly kind of you know, crazy what you're trying to build. You both attract incredible kind of people that want to be missionaries.
[00:14:46] They want to be a part of that journey that's not necessarily there for the title or for the salary, but really want to kind of, you know, achieve this kind of greater goal of this greater kind of outcome, right? So we used to say that we were building a Hollywood style movie on your laptop in 10 years.
[00:15:00] And that really kind of attracted a lot of people to that mission, but it also attracted a lot of kind of, you know, eyeballs organically, right? Because the technology there, it was for the first time in the history that you could actually type in text and generate a video with a person talking to you.
[00:15:16] The quality and the outcome was obviously less authentic than it is today. But for the first time, it was just so magical that Can I know the rings in the waters was just so organic, right? That people like, fuck, have you ever seen this? So our kind of just organic rivalry was just so big because nobody has actually done this before because we've kind of been truly 10xing, 100xing an existing process or something that has never really been done before, right?
[00:15:43] So I think, I think that's also something that I'm looking for when I'm, I'm looking at speaking to other founders is, is this kind of something that, That is truly something crazy or weird that has not been done before, or maybe has been tried many years ago and it didn't work, versus that incremental kind of software or nice UX design of this vertical, right, that SAP has been offering for 40 years.
[00:16:08] So, uh, so I think it was. Literally inbound and word of mouth because it was so crazy that took us to the first million. But I think what we did really well as there was also just really engineering the growth loop where we gave a lot of the product away for free, even though that it was just an avatar clip generator.
[00:16:29] We gave that away for free so people could kind of try the product for free and that's our main CTA on the website today is create a free AI video. And that was just like giving people a lot of the magic up front and then they will kind of, you know, sign up and also the magic around video is that it's incredibly viral, right?
[00:16:47] So when you create a video, you share it with other people, uh, which is not true for many other kinds of software categories where if you sell. Accounting software for accountants, right? They don't speak down in the canteen to any of the colleagues around a new kind of, you know, NetSuite, uh, widget they've just installed,
[00:17:04] Toni: You might be surprised, but, um, uh, so the, the actual use case that you're hammering on now, was that also the use case that you, uh, initially built with a product? Kind of, was that already clear at the point when you went live?
[00:17:17] Steffen: To be honest, I think we had no clue about who would actually use this. And we were pretty skeptical. Who's, who's actually going to have any use case for this today. It's like a pretty static, pretty frozen kind of avatar talk straight to you, right? With a. Literally no other thing than five colors of background that you could change.
[00:17:36] so it was literally, okay, who is this for? Right. And that has just really, uh, so that was kind of the initial launch, right. But we realized early on that, um, there's a really like long tail of content that is really boring on the internet, where we, of course, kind of consume very high end media, right.
[00:17:55] From Netflix and YouTube, most YouTube content, right. TikTok. But there is just a very, very long tail of very kind of boring content that is literally just a PowerPoint with a narration or just a kind of very simple kind of presenter led piece of content, right? That was kind of the first understanding or the first kind of insight, but then we clearly realized that what is actually, you know, defining our TAM or our, our focus is very much the avatar quality.
[00:18:24] So the more expressive, the more realistic, the more authentic the avatars become, the more use case we unlock. Where today, right, most of the content is this bucket we call instructional content. And we're not competing with any high production media today. We're competing with text, right? If you're an 18 year old new McDonald's employee, do you want to receive a 30 second Synthesia video on how to enter the deep fryer?
[00:18:47] Or a three page PDF? That's typically a no brainer for the individual, right, because it's way more engaging, you actually understand what's happening in that video versus reading. And that was also the first insight that we're not actually replacing any high end production today, but as we mature the underlying expressiveness of the avatars, the realism, we slowly but surely kind of expand that tamp and aperture of use cases that we can actually address.
[00:19:11] Toni: And let's just say reaching the million, right? There's lots of founder stories in here, uh, which is like really, really fun and entertaining, but I must imagine, You know, going from one to 10, right? So I think that's the last revenue number we're going to be talking about, but, going from one to 10, how did, how did things change?
[00:19:28] How did your funnel change? How did your business change? How did, um, you, know, a lot of, these check marks early on that are relevations is like, okay, now we know this, but how do we now get this to literally 10 million?
[00:19:40] Steffen: Yeah, we were, we're kind of going a lot of directions after this kind of first six months where we just literally went from zero to a million at an eye blink or more or less, right, which was just purely kind of inbound led. but that started also to give us some insights on the user behavior, the actual retention of different cohorts, the actual understanding of what use case actually the valuable and coming a little bit back to this utility over novelty where in that beginning, right?
[00:20:07] Thank you. We got like so many, Oh, we should partner for that. We should API for this. We should, uh, try that. Right. Um, but that was also just kind of really coming back to, to understanding the actual value and be ruthlessly honest, where's the technology good enough and where's the actual maximum value that the product and the
[00:20:26] current state is actually driving. and that really took us into this
[00:20:30] kind of. Bucket of kind of
[00:20:32] instructional content, which is prevalent in the L& D. And, uh, and that was kind of our first kind of, you know, segmentation of the market, our
[00:20:40] kind of ICP, our focus that we really wanted to hone in on. And, uh, and I think that helped us
[00:20:46] to go to the, first 10 was really kind of understanding What is the usage patterns, where's the retention, where's the happiest customers of everybody. Uh, and that really. Gave us the insight to, to this kind of vertical, this kind of focus that, that, that took us to, uh, to 10 and beyond.
[00:21:05] Toni: So, so I know there's somewhere in here, there's a Dave Beckham story. I'm not, is it, is it part of the one to 10 or is it the 10 plus where, where does, where does
[00:21:12] Steffen: and the, that is pre, that is early days. So, uh, so there was, uh, that was when we were back when we were still a service. And when we had, it took us a year is to kind of go from, this is a cool academic paper to. That works in a cherry picked one off example to an actual kind of, you know, sort of a product or sort of a service that could actually be generalized and work in production.
[00:21:35] And when we had that, I think that was late, um, late 18 that we kind of had, okay, now it's starting to work. And then we went out to a bunch of agencies here in London or to, to anybody who wanted to speak with us, frankly, um, and say, Hey, this is for the first time you can update and change video after the fact, um, here's some ideas around translation, repurposing existing content.
[00:22:02] And, um, there was a lot of people that wanted to, uh, to kind of experiment with it. And a lot of these agencies, right. They're all. Very obsessed about their can lines and all this kind of innovation and cool is kind of creative projects, right? So that was actually a decent amount of interest in the technology. But what we landed on this one with David Beckham, which was obviously for the name of David Beckham. But I think the creative around this was also really cool because it was for the malaria no more Foundation, where the creative was that, um, kind of very few people, unfortunately, want to hear from Ken from Kenya.
[00:22:38] But, uh, if it's the, if it's through David Beckham's face, right, people actually listen. So it's the actual malaria survivors, real voices coming through David. And kind of really giving them a voice to the world and, uh, and that was, yeah, just really kind of powerful. I think it had over 500 million views and was one of the most kind of successful social movements.
[00:23:00] Yeah.
[00:23:00] Toni: No, pretty cool. I mean, so I thought it was part of maybe this other kind of uh, you know, journey. That's why I was asking about this. you're saying something kind of pretty straightforward, right? Like, Hey, we need to figure out what is our ICP and then we need to figure out how to go for it.
[00:23:12] and up until 10 million, was it, was it still all mainly inbound driven basic kind of, is that, is that how you let, uh, how you kind of, uh, uh, got to that point?
[00:23:21] Steffen: Yeah. so we, so we kind of continued to engineer this kind of viral growth loop, right? And we were just leveraging the fact that video is an viral output. So when you created a video on average in the early days, right, on average, when one of our users created a video, they shared that with three people on average.
[00:23:38] And two or one and a half of, them came back and created, right. So it was literally this kind of really expansionary kind of virality that we kind of really engineered, um, which was working really, really awesome. And then we had, when people kind of, you know, saw this tool was really magical and they could create cool things.
[00:23:57] We also just saw a lot of kind of influences on, on, uh, on TikTok, where we also had this kind of self fulfilling prophecy when some of the influencers picking it up, we didn't even pay them or kind of just, just content creators there, they created like a small video of how they could create a Synthesia video.
[00:24:15] And that got 30 million views. Then there was 200 other, kind of, you know, TikTok influencers that saw, Oh, this is a really cool piece of content. Let me create my local version of that. So it was also just like really kind of permutating down, which was really kind of just this kind of crazy flywheel that was just really, uh, running very, very smoothly.
[00:24:38] Toni: And I think maybe this one I'm getting right now, I hope. Um, there was one campaign that I still remember. And I think I'm connected to Synthesia because of like the Danish connection and Founders House and a couple of those, those kinds of things. But, uh, that, that's why I was kind of following this.
[00:24:54] But one thing I kind of still remember, there was some kind of a, the longest live Tik Tok, uh, like conversation ever. Am I piecing this together right?
[00:25:04] Steffen: No, no, no, it's correct. Yeah, we did the longest live stream on TikTok ever. I think it was, uh, 45 days where we had one of the avatars. Talking or counting to 1 million. Uh, and that was also just, we, we had like, we wanted to kind of experiment with cool content team items, right. Where, what is actually possible when everything is software, right.
[00:25:25] You can programmatically kind of, you know, change what's being said and we wanted to kind of demonstrate different kind of, you know, versions of this. And, And, one of the thing was kind of talking to, or kind of counting to a million, which, uh, which was the longest kind of, you know, TikTok stream. and it, was just.
[00:25:41] It's just weird people kind of tuning in. Right. I don't think it was also one of the most kind of initial successes of, Mr. Beast of him counting to a hundred thousand. I think it was, uh, that over 17 hours or whatever it was. so, so, so it was just kind of inspired by, by some of those things. And, uh, I think we're going to do more of that in the future, trying to, what is actually possible when you
[00:26:03] take digital or kind of, you know make production out of the realms of like working on a physical timeline, but what is actually possible. Right.
[00:26:11] Mikkel: So it sounds like you used a lot of, let's say, creative content and maybe even press layered into this as well. I mean, maybe walk us through, was this through a marketing team to an agency? Was it you and, uh, and, and your co founder that kind of, you know, just had those ideas or how did that come to be?
[00:26:29] Steffen: Oh, so I think we had, we had a kind of pretty strong kind of growth, uh, growth team internally. Victor also has a back, we both have kind of backgrounds in kind of growth marketing, but we also got Jacob in, who's also big in the Danish startup ecosystem, who's our VP growth today. And he's also coming from a very kind of strong kind of growth background, but I think we were kind of, been doing everything in house. And I think what we've learned from agencies is that, um, I think they're good for, for certain things, but it's just hard to outsource some of the most critical pieces. That's just hard to kind of get the same context, the same understanding without being in the company and know the limitations and what has been tried and what hasn't been tried.
[00:27:08] Right. And also because the. The iteration cycle is so short, right? We could literally spin up and create a new piece of content in half an hour. uh, which was, uh, which is also kind of the magic of the tool, the experimentation where traditional media, right? It's just so hard. And the iteration cycles are just too long.
[00:27:27] You're not kind of creating one Superbowl ad and then you iterate it on next year, right? Um, it's just kind of really, really hard with, uh, with kind of high production media. So, so that has also kind of been an insight and something where using the product and Using the product in experimental and innovative ways ourselves has also just been, uh,
[00:27:46] Toni: it's pretty cool how you kind of, get the shareability piece while also featuring frankly, bottom funnel content right? It's like, Hey, everyone wants to share this thing, but really this is a product demo right there, right? Obviously kind of packaged differently. Um, but that's usually where, where for, for, you know, other B2B teams, uh, kind of the, uh, the, the loop kind of ends, right?
[00:28:09] You do top funnel content that, that goes really well. But as soon as you show a demo, it's like, ah, okay. Um, it's not that interesting. Right. So you guys kind of figured out how to. Create bottom funnel stuff that has a direct impact on, I don't know, your, your, your free trial, your demo request or whatever you're going to use.
[00:28:27] Um, but making this also go, I don't want to say go viral, but there's a viral aspect to it but at least kind of get a lot of reach, right? So I think that's pretty, that's pretty well executed.
[00:28:37] Mikkel: So I'm, I'm also kind of curious, like, so pretty cool story so far and, so only so far we can still turn it still turn.
[00:28:45] Yeah. I'm also just wondering, it feels like it was like, Oh, well then 1 million and then 10, we did these kind of, uh, bottom follow videos. I'm sure there must have been also some, some struggles and pains along the way to go from, from like one to 10. Um, because I imagine even with the creative, not every idea you get is, is going to work out.
[00:29:03] So what were some of the. Like let's talk about some of the challenges you went through in this period.
[00:29:09] Steffen: Yeah, I think, uh, I think, uh, it's obviously, I think it was actually a lot about the focus where there was different opinions in the company. Uh, about kind of what to focus on because it is such an open ended platform, right? You can literally use it for so many different things, which is both a blessing and a curse, right?
[00:29:27] It's a blessing because you're not like stuck to a certain TAM or a certain kind of niche side of, the market, right? But, it's also a curse because it's so, hard to kind of focus and really kind of double down and build a repeatable engine and kind of, you know, iterate on that
[00:29:41] Um, and that continues to be, be the case today, right? Uh, where we also need to kind of, reevaluate kind of what, what, what worked six months ago might not be, there might be different circumstances or different, uh, kind of parameters that has changed and kind of challenged that initial or existing hypotheses. Right.
[00:29:59] But I think it was a lot about the focus and what to build, because it's, we kind of building a lot at Shantisha, right? It might look simple from the outside, but we kind of building, you know, Canva, Vimeo, Miro and, and YouTube to an extent, right.
[00:30:17] And with, with a very kind of small team. So it is really kind of ruthless kind of, you know, um, resource allocation to kind of what to focus on. Um. But commercially, right, I think we had, we had different kind of, you know, waves where our business is split in two parts.
[00:30:34] So we have our self service revenue and we have our enterprise funnel. And I think, um, I think, um, different to most kind of PLG companies, I think we were much quicker on the enterprise because we just saw that. This type of content is just much more useful in bigger companies.
[00:30:53] And I think there's a high correlation between the use of Synthesia and the number of PowerPoints in the company, where if you are a huge company, right, you have, you produce a lot of powerPoints because you have a lot of information that you need to disseminate across teams, get across geographies, across, uh, different kind of you know, verticals of the business, right. so we were kind of quick to kind of go in the enterprise, right. Uh, versus maybe an Asana or Dropbox, right.
[00:31:18] Where they kind of, you know, exhaust that a hundred million of like self service and then fuck, how do we grow from, here? We need to add SSO tags and kind of go in the security path, but we kind of went there quite early.
[00:31:30] Uh, because we just saw these insights from some of the. data and from the usage. And that was obviously a different, different kind of DNA, right. And a different kind of sales org and a different type of kind of, you know, product or we needed to orchestrate for this. and there's kind of been, been mostly kind of, I know, battles around, kind of, I know.
[00:31:48] The focus and the areas and tech good enough for this. Are we taking a bet on that? Um, and a lot in the early days, we were kind of bullish on the API, uh, as kind of, you know, are we just an API business we plug into Adobe, plug into PowerPoint, plug into Canva, right? But I think we are right that trying to actually own the point of creation, I think it's kind of, you know, create a lot of value and also kind of, you know, really setting us up for this new paradigm that actually.
[00:32:17] Camera recorded content is very different from generated content. And we are building very much in this paradigm here, where it's just really hard if you kind of, you know, have a PowerPoint with an overlay of an avatar, which is kind of the content that looks and feels from Synthesia today. But I think as we go extremely deep on the fact that this is generated content, it has none of the kind of, you know, the, the chains of kind of physical or kind of, uh, sensor based materials.
[00:32:44] That will kind of really, uh, go deep and uh, change how video is going from this kind of one size fits all static dead MP4 to a much more dynamic, responsive, uh, localized, contextualized, personalized media object that is just being kind of programmatically updated based on CRM data, location, uh, other kind of, you know, information you have about the audience, right, where today everybody's consuming the same piece of content.
[00:33:12] Toni: And, um, so it feels like you started, uh, introducing the enterprise motion or the I don't know, mid market and up motion. uh, in contrast to the PLG thing, you know, within those 10 million, um, now that you've obviously blasted past the 10 million is, is most of the, Focus actually going into the enterprise or, uh, how, how does, how has that relationship change?
[00:33:36] Right. Because I'm sure there could also be a great argument in the organization is like, Hey, this PLG thing is kind of really fueling the enterprise piece and so forth. So how do you see those two motions influencing one another and, and ideally fueling one another?
[00:33:51] Steffen: Yeah, no, it's a, it's kind of a continuous kind of question and an open ended kind of debate, right? But I think actually what has set us up for the enterprise early on was that we had actually worked with pretty big companies on the service arm, right? So we work with quite big companies that was doing training in different languages where we kind of dubbing it, this kind of AI service dubbing that we had, right?
[00:34:15] So we had a lot of those relationships when we launched the platform and they also
[00:34:18] saw kind of immediate needs. So I think that was also informing why we were so focused on the enterprise early on. But I think we've actually been pretty enterprise focused from, from, from, from, from day one. but of course the kind of in the revenue split has kind of gone in waves because we've had these crazy viral moments where, self service just scales up like quickly, right? you can't hire, you know, 20 AEs in a week because there's 2000 leads waiting to be spoken to, Right. Where the self service was just kind of, you know, scaling much more up with these kinds of viral moments that we created. Right. Um, but, uh, but that has kind of been, uh,
[00:34:56] been the focus and enterprise continues to be the focus for us.
[00:34:59] Uh, and that's like, yeah, 70 percent of the business is enterprise today. And 30 percent is self service where we also just saw the stickiness, the retention,
[00:35:09] the actual value the
[00:35:10] underlying user is getting, where most of the self
[00:35:13] service customers are coming with these more marketing type of use cases, right?
[00:35:17] S& P, they want to create a few videos for their website. Where creation in itself is actually not super recurring, if you think about it right? So if it's creation, it's kind of, more peaks and valleys, right? Oh, I need to create these five videos for my website. Let me go in and create them.
[00:35:35] Great, let me cancel my subscription and come back in six months when they need to be updated or have new pages I want to create a video for, right? Where for the enterprise, because the Continuous content needs are just so kind of, you know, recurring. They just becomes much more of a, of a product market fit for us.
[00:35:53] Mikkel: So I'm kind of curious because, so now we've talked a bit about enterprise mid market. I imagine even there might be. Private users of this software as well, just for their, you know, sending a spoof video to their boss or something, but I'm just wondering, the, use cases might differ quite a bit from someone going self service versus enterprise So when you say you're focused on enterprise, I wonder, what does, that do to how you're also building like, future solutions? is that what kind of goes in and dictates it? I can imagine that must also be a pretty tough thing because it's So tied to your ability to grow.
[00:36:27] Steffen: Yeah. I think what is also a little bit unique about Synthesia and just building creative tool is that. There's just such, for us to get to just a feature parity with PowerPoint or just some sort of a creative app, right? It was just so obvious that, of course, you needed to be able to kind of, you know, change the shape or, of course, you needed to change the rounded corners or be able to kind of make an animation or transition, right?
[00:36:53] So, our roadmap for the first two, three years was just So obvious because there was just such a long tail of actually being able to become a destination for, for kind of creating content end to end. And this was replicable if you're either, you know, creating a wedding invitation with, with Synthesia or you're creating, you know, a corporate, uh, training, uh, kind of asset.
[00:37:15] Right. Um, so, so I think it has been. Been also pretty kind of clear what do we need to build to get to V1 of actually a pretty robust kind of creative experience. And there's just a long tail to continue to do that. Right. But now it becomes much more okay. Do we end up as kind of Adobe? If we just go in the path of, you know, creating every kind of, you know, small little knob and every small kind of slider or animations and the long tail of cool things that people want to produce, or do we focus on other things where we actually can kind of, you know.
[00:37:49] Be marginally better, unlock more value for our customers.
[00:37:52] And that's kind of also ongoing.
[00:37:54] Toni: let's maybe let's maybe wrap with that question What's the what's the next what's the next knee in the growth curve for you guys kind of where where's this thing going? I think
[00:38:04] Steffen: Yeah, I think, um, I think we've never been more bullish than we are today. I think there's a lot of kind of very, very cool things coming out. Um, and I think why Victor and myself are still here is that we still feel we're so early in the journey, right? I'm not sure it's kind of long, no longer our kind of clear
[00:38:23] kind of outcome, but the kind of the creation of a Hollywood style move in your laptop. I think we mostly as our kind of PowerPoint 2. 0 kind of
[00:38:31] workflow tool. Um, but I
[00:38:34] think what, what is exciting us
[00:38:35] is that we, we kind of kind of established, we kind of build a creative tool that is. Pretty robust
[00:38:41] today. Uh, that's kind of our first vertical, right? Then we have bullet on collaboration.
[00:38:47] So from a single player to a multiplayer tool. And here, if you think about it as more of a workflow, right? You also create indirect usage value. When your boss comes in and comments on a video, you get legal to sign off on the wording. You get marketing to sign off on the kind of, you know, the look and feel. And you share it with your French colleagues to get the French translation, right?
[00:39:06] Right. There's a lot of kind of, you know. Different use cases, we kind of permutate from few users to many users and organizations, right? Uh, which is kind of the first, uh, important thing that we're trying to crack. But then we're also a lot about how do we elevate from user pain, which is kind of what we've been really good at today, selling to all this inbound demand.
[00:39:26] They wanted to kind of create a video yesterday because they just have these urgent kind of content needs. But how do we elevate the use of video to much more strategic outcomes in the business, to strategic budget holders, right? That really kind of want to drive bigger and more strategic initiatives with video.
[00:39:42] Where we can use video as this change agent, right? If you think about our private lives, right? We listen to podcasts, we watch YouTube, we watch netflix, right? But when we come into work, it's PDFs, PowerPoints, emails, work documents. There's just a big kind of gap between what we communicate and how we interact in our private lives when we are not like restricted to the, corporate world and what we do at work, right?
[00:40:06] And I think there's a big gap to kind of be bridged here if we can kind of make the default way of communicating more visual, more engaging. And I think, um, hopefully it's not like last destination as a species is to communicate through PowerPoints. It is hopefully more interactive, more engaging, more kind of you know, um, inspiring in the future of how we disseminate and drive organizations of the future.
[00:40:31] Toni: Steffen This was absolutely fantastic. Thank you for sharing your overnight six year long success, uh, really, really inspiring. So I think for our audience, there's lots of founder stuff in here, but there's also a couple of really golden nuggets around how to actually kind of use those, uh, you know, go to market tactics that people are talking about, how they actually kind of sometimes apply in, in a world like this here.
[00:40:56] So. Thanks a lot for spending the time and, uh, yeah, good, best of luck to you guys and, uh, and speak soon potentially.
[00:41:03] Steffen: Thanks a lot. Thanks a lot, guys.
[00:41:05] Toni: Sure. Bye. Bye.