Esben Friis-Jensen was a technology professional in Copenhagen, Denmark before he and three Danish friends moved to San Francisco in 2013 to start a new startup called Cobalt. Cobalt.io grew steadily and raised several rounds of VC funding to become a sizable cybersecurity software company in Silicon Valley. Cobalt serves large businesses with a platform and services for larger companies to efficiently test and find security holes in their websites and web applications.
Esben left Cobalt in 2020 to start Userflow to help software companies attract, sell, onboard and support their customers without human touch altogether using a product-led growth approach. Userflow is a no-code onboarding software to easily build in-app explanation guides, checklists, and videos for software product companies to improve free trial conversion and new customer onboarding for expanded retention. Userflow has a free trial and uses their own software to improve conversion and onboard customers without human intervention.
Userflow is profitable and growing with over $3 million in ARR, 600 customers, and just three employees with no outside funding. Esben handles all growth and lives in San Francisco and his cofounder Sebastian builds the product with their UX designer in Denmark, so about $1 million annual recurring revenue per employee.
Best quote from Esben:
“I think the problem is that when VCs deploy capital, they expect companies to hire more people. And when you hire a lot of people and you keep hiring, it becomes harder to be product-led because you solve problems with people. VC-backed businesses can do product-led growth, not just bootstrappers., but I hope VCs have a change of mind in how they expect businesses to operate.
“Any new founder should consider product-led growth very carefully and try to stick with that model. I don’t see why you wouldn’t be able to do it, especially if you’re in a red ocean (crowded market). It can actually be a differentiator when you enter the market that you allow people to try your product whereas some of the older players in the market maybe don’t.
“Today, you can start a bootstrapped software business and raise less capital. So carefully consider that and don’t just do what everybody else does and go on the VC journey.”
In this episode, Esben explains:
- Why he and 3 friends moved from Denmark to San Francisco to start a cybersecurity software company
- How his first company raised VC funding and grew quickly with a large team
- How he leverages the product-led growth (PLG) approach to grow Userflow quickly and profitably
- How he resists adding additional staff as their revenues grow
- Why he isn’t raising outside funding for Userflow despite being in Silicon Valley
Userflow Company Facts
- Founded: 2019
- Employees: 3 employees with $3 million ARR
- Description: Userflow helps teams at software companies build customized in-app tours and checklists, without code to improve user onboarding and improve conversion and usage rates.
- Funding: Userflow is bootstrapped with no outside funding.
- Headquarters: Esben lives in San Francisco and his cofounder Sebastian lives in Denmarks.
