We recently had a chance to catch up with Anjali Sud, CEO of Vimeo. After a 16 year journey, Vimeo recently IPO’d at $330m+ in ARR, growing a stunning 56%! (!). More on that here.
The conversation was great, and we went especially deep on how to run a business that has both a large self-serve component, and a free edition … and a fast-growing enterprise business as well. Vimeo just hired their first sales rep 3 years ago to spearhead $20k+ deals … and now they have 100 reps, and are on track to double that headcount.
My Top 10 Learnings:
#1. Lean In Early With a Strong Lead on International Expansion — Even Now. 50% of Vimeo’s revenue is international. Anjali’s top learning on going global is to lead in with a great GM and a small team in each key geo. Even in this distributed age, it’s critical to have local leaders tailoring the product and owning the customer relationship. That’s as important now as ever.
#2. If You Want to Do Free, Self-Serve, and Enterprise Well — You Have to Leave Some Money on the Table. Those of us who have run companies that do free, self-serve, and sales-driven all get this tension. Sales wants to monetize accounts fast. But if you do so, you cut off part of your long tail, and your pool of advocates. Anjali is staying patient here.
#3. Go Long on Partnerships, Embedded Use Cases, and APIs. Even if The Short-Term Revenue is Zero. Vimeo’s recent partnership with Asana creates zero direct revenue for Vimeo. Asana users can record, share, and manage high-quality video inside of Asana using Vimeo 100% for free, without upgrade gates. The play here is ultimately, if they want to use that content outside of Asana, they may pay to upgrade there. Vimeo wants to own those partnerships and relationships, even if it takes years to generate any material revenue.
#4. Even Now, It’s Still a Land Grab in So Many Segments in SaaS and Cloud. Video is still so underpenetrated that Anjali sees so many spaces as land grabs not fully served. Web conferencing may be well filled by Zoom, for example, so they don’t compete there. But they see webinars, for example, as a rapidly growing space that can grow dramatically from here. So many markets still have so much more room to grow.
#5. You Have to Maintain Quality As You Drive Down Costs. Vimeo drove its gross margins up to 70% pre-IPO — impressive for a company with large hosting costs. Even more impressive was doing it while increasing video quality. Key was putting a team of their very best engineers on figuring out a clear margin KPI, and finding a way to do it and to not just maintain but improve quality and user experience.
#6. Celebrate the Wins. Also key to driving up gross margins and more was celebrating the wins. We sometimes don’t do enough of this as founders. They had big company-wide celebrations as they hit their gross margin and cost goals. This energized everyone.
#7. The Key to Upgrades to Enterprise and from Free-to-Paid in Self-Service at Scale is Data. Vimeo is still early here, but key to maximizing customer-centric upgrades and leads for sales is having the data that surfaces the opportunity. This is a lot of work and still a work in progress.
#8. Play Where You Have a Differentiated Product — and a Moat. A video platform can expand in so many ways, and Vimeo indeed has a number of products today. But they don’t take it everywhere. They only expand where they truly believe they have both a differentiated product, and a moat. But that moat can be brand,
#9. Conversions outside the U.S. are half of the rate in the U.S. This was interesting. Anjali viewed this as a core place to drive up their metrics, with self-serve converting at half the rate to paid outside the U.S. If nothing else, a reminder that strategies are different in different geos, and deserve their own team.
#10. Specialize Your Teams More, Earlier. Anjali looks back and sees what so many of us have learned — more specialization earlier helps. For her, having multiple product teams earlier would have helped, given that they have such different use cases, buyers, and personas.
So much more in our talk above!
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