Buffer's product journey, and our next step to hire a VP of Product
July 28, 2020strategy
Note: this was originally posted on the Buffer blog.
We've been building Buffer for coming up to ten years now. We’re currently a 90-person fully remote team with over 70,000 paying customers and $20M in annual revenue. We’re proud to be a leader in the space of social media management, and to operate long-term as an independent and profitable business.
As a company, we’ve rallied around serving small businesses. We’re also passionate about challenging suboptimal approaches to how work happens and how employees are treated. Our current 4-day workweek experiment is an example of that.
An important philosophy of our journey has been having the freedom to build our product and workplace the way we'd like to. In 2018, we took an important action to maintain this freedom by spending $3.3 million buying out our main VC investors.
After a great decade with many accomplishments and interesting challenges, we’re looking for an experienced and driven product executive to partner with me as CEO to shape the future of Buffer.
Before I get into why we’re hiring a VP of Product, I want to share a history of product at Buffer, how our team is set up, and our most recent revenue metrics as these are all aspects of Buffer that I know a product leader will have questions around.
A history of product at Buffer
I launched the first (truly an MVP) version of Buffer in late 2010. In the beginning, Buffer started as a solution to my own problem around consistently sharing content on social media. I then put the idea through a customer discovery and validation process to ensure it was a problem others had, too. We launched with a freemium model and were fortunate to welcome the first paying customer on day three. We then added some focused marketing, and over the course of the first year gained thousands of active users of the product. Initially a lot of our product direction came from those customers, listening to their problems and devising unique solutions.
In 2012, it was time to focus slightly more. We narrowed in on bloggers, individuals, and small business owners. We set down our first true product vision, which was to be the sharing standard for the web. We made big progress on this vision, becoming the first social media management solution to create a sharing button and completing integrations with countless news reading apps.
During this time, our acquisition and growth strategy was our freemium model. Ultimately we started to realize that this strategy would only truly work if we became a mainstream product used by millions. As we integrated more widely, the signups we gained from those partnerships led to much lower freemium conversion rates. As a result, by 2014, our growth started to plateau and we felt we reached the upper limits of how successful Buffer could become with this approach.
Since our product was most valued by and most active among small business customers, we leaned into that and launched Buffer for Business with new pricing plans tiered up to $500/mo. We succeeded in finding a new wave of growth, and the journey cemented our intuition that Buffer wouldn’t find success as a consumer product. This brought a level of focus that was refreshing, and pushed us to add more power to the product. We aimed to do this while still maintaining the simplicity our customers had grown to love Buffer for.
In 2015, we explored a team structure with no managers, and this played directly into our approach to product. With more autonomy on our team, we let our product strategy take a truly organic direction. During our period of no managers, we launched several new products. This included a “Buffer labs” exploration where we produced Pablo, our image creation product, as well as Daily, a swipe left or right approach to adding suggested content to your social media queue. Finally, the Pablo team shifted to launch Rocket, our first foray into the ads space. Daily and Rocket were ultimately sunset, and we learned a lot from each of them.
In early 2016, we acquired Respondly, a social customer service and engagement product which we relaunched as Buffer Reply. This was our most significant bet and investment to date and took us into the customer service industry for the first time. Customer service had always been a large focus for us as a company, and we were excited to be able to offer a product to help others in this space, too. At the time, the networks were making a big bet on social media becoming a significant channel for customer service. Customer service ultimately did not grow along the path we predicted, and the need for a fully fledged product here was mostly limited to Enterprise scale, which was too mismatched with our existing customer-base and knowledge in the team. We grew Reply from $4k to $70k in MRR, and chose to sunset the product earlier this year.
In the process of becoming a two product organization, we saw an opportunity to separate out social analytics from our main product focused on social media publishing and content planning. We leaned into this multi-product strategy and built our third product, Analyze. This separation gave us a better focus on the separate customer jobs and we have been able to grow this into a very successful product. Analyze currently generates over $1.5m in ARR.
By the second half of 2018, we had grown to $18m in ARR and over 75,000 paying customers. Still being a small team, we started to feel stretched thin, and we increasingly found product prioritization and pace to be challenges. I partnered with our head of research to run a process to determine a singular type of customer for us to focus our efforts around. We arrived at Direct to Consumer (DTC) brands as a type of customer who has built their business on top of social media and has innovated the most with social media marketing and customer engagement. This newly defined Target Customer for Buffer brought us a lot of focus, but at times felt like an over correction and came at a cost to product improvements for our existing customers, who are small businesses of all types.
Something that became clear over a few years, and during our customer research process to arrive at DTC brands as a customer persona to focus on, was that the the world of social media had become increasing visual. To address this shift, we spent most of 2018 and 2019 building out new functionality focused on Instagram. In addition to this work to expand our product offerings, we underwent a significant rebuild project for our main product, Publish. Rebuilds are never fun, but with this now complete we are able to move significantly faster and deliver a much improved user experience.
That brings us to 2020. Our current focus is to become a brand-building platform for small businesses, with DTC brands as one of our primary customer personas. This year, it became clear that the multi-product approach was creating friction for customers, so we are working to adjust our pricing and overall experience towards a single solution. We’re in the midst of launching Engage, a social engagement product for small businesses that came out of our experiences growing Reply. Engage will be bundled as part of existing pricing tiers, at various levels of functionality.
I’m looking forward to this next chapter of Buffer, and to a future where we can become a comprehensive toolkit for small businesses to build their brand, grow, and create great relationships with their customers. We see a path to 100,000 paying customers and beyond, with many opportunities to solve more problems for that audience.
How our product team is set up
We’re primarily structured around the customer jobs we are focused on: Publish, Analyze and Engage. We also have two “shared services” teams focused on authentication, billing and onboarding (Core) and our iOS and Android apps (Mobile). Most teams have a Product Manager, Product Designer and somewhere between two and seven engineers depending on the needs of that product area.
The VP of Product we bring on board will manage Product and Design, and initially have six direct reports (four PMs, Head of Design and Partnerships Manager).
Our current financial metrics
We’ve been profitable since 2016 and in 2018 we chose to leverage that profitability to buy out a portion of our investors in order to retain control over Buffer’s path. We reached $10 million in ARR in May 2016, and $20 million ARR in March 2019.
Here are our most recent revenue and product metrics from June 2020:
Customer Churn: 4.76%Net
MRR Churn: 3.95%
Operating Income: $235,375
EBITDA margin: 14.01%
We have a dedicated revenue dashboard (a work in progress!) where you can see revenue over time. Here’s what that looks like:
**The COVID-19 impact **
Many businesses have been impacted by COVID-19, including us. Buffer is in a strong financial position, we’ve thankfully had no impact on jobs and have remained solidly profitable. The shareholder update we sent in April shares a complete picture of our approach in the midst of the pandemic.
One thing I talked about in that update is that sometimes the best thing we can do for our small business customers isn’t immediately profitable for Buffer – including our COVID-19 support programs for customers with financial challenges. I have no doubt that we’re doing the right thing by focusing on people first. One of my business philosophies is that if we take care of our teammates and our customers as best we possibly can now, we will succeed in the long term.
This graph of our MRR in 2020 shows the impact we’ve seen on revenue:
Though we have experienced some anticipated decline, we are happy to see that it has started to climb again and as I mentioned, Buffer has pulled through in a strong financial position. We’ve spent the last few years building up to our current financial security, which means we can weather extreme levels of uncertainty. We’re fortunate and grateful to be in this position, and are proud of our financial diligence.
We’re hiring a VP of Product
At this point in the journey of Buffer, I’m excited to bring on board a VP of Product.
Before I share more of the reasons we came to this decision, I want to share a key area of weakness up front. While we've made great strides over the past few years, and we have a majority female leadership team, our current leadership team lacks diversity.
There's no doubt that as a result we lack key perspectives and have unconscious biases as a company. It’s a priority for us to change this dynamic and include within our leadership team backgrounds that have been typically underrepresented in tech. This will serve our customers and our team more fully than we have been able to so far.
Since we don’t grow our leadership team often, this is a rare opportunity for us. In addition to looking for a talented product leader, we also want this teammate to bring a new perspective to our leadership team and culture. Making sure we speak to a slate of diverse candidates is critical as we look for our VP of Product.
Below are a few reasons I came to the decision to look for a product leader:
Being a product-minded CEO can become a weakness
As a product-minded CEO, my journey has followed from my innate energy and passion for product development. An engineer by background, I shifted to product development early in our journey, and found a lot of enjoyment in crafting the experience for customers, which I believe has played a large role in where we are today.
Unfortunately, what can happen with a product-CEO, is that product can go from being the strongest area of the company to one of the weakest. At a certain point, product must scale up and become operationalized, and those strengths must become part of how the overall team functions. I believe in recent years we’ve seen some deterioration of product where other areas such as engineering have grown stronger, due to my desire to hold on and shape product more than is appropriate for the size have grown to.
I’ve recognized that I need to take a different approach to fulfill the vision and goals I have, in order to keep the product as a core strength of ours. It needs to happen through someone else, rather than through me alone.
I’m looking to bring more balance to all areas of Buffer
I believe for a company to thrive, all areas in a company need to work in harmony and that my role as CEO is set down vision and support all areas.
Over the past few years, I’ve been very focused on product, which has caused an imbalance in how much I’ve been involved in other areas of the company. This is to the detriment of our customers, team, and all stakeholders.
By inviting this functional leader to our leadership team, it will mean I can be more equally balanced across all areas of Buffer. We will be able to push forward, and I can work more closely with leaders to set vision and strategy, across all areas in tandem.
Therefore, bringing on an experienced VP of Product will help us level up as a product organization. We will be able to introduce more streamlined processes, and by having a person dedicated to this area solely, we will improve the way product interacts with other related and interdependent areas, such as engineering, marketing, and advocacy.
**We’re looking for outside perspective **
For this role, I am making the choice to bring in someone from the outside instead of considering someone growing from within the company. This is new for us, and I’m excited for the opportunity for growth we have with a fresh perspective on the executive team.
In our journey so far, we have overwhelmingly had leaders grow from individual contributor roles into senior leaders. I believe that it’s beneficial to have a majority of leaders grow from within the company as there is a clear alignment of our values, empathy towards team members, and a sense of loyalty towards our mission.
With that said, having 100% of leaders grow from within creates a lack of diversity in our mindset and approach. Without outside experience, we will have knowledge gaps as a leadership team, and can become set in our ways. The VP of Product role is an excellent opportunity for us to find someone with some extensive outside experience.
A key thing we will be focused on in our hiring process is that a person’s external experience is compatible and additive to Buffer’s approach and values.
More about this role
For this role, I’m seeking a partner in product strategy and execution. Since product is at the heart of Buffer, this is one of the most important roles and one which will make decisions impacting all other areas.
We’re looking for a product leader with deep product management and design fundamentals and expertise, as well as strong people management experience and stakeholder collaboration. I’m aiming to find someone that can both tap into the insights that I have to offer and stand strong and push back when they believe I shouldn’t be involved.
It will be helpful for a potential VP of Product to have experience in a smaller company environment, and ideally has led a product team through significant growth, for example growing a SaaS product from $10m to $50m or more.
The other key difference with Buffer is that we’re focused on SMB, with a large number of paying customers and free users, and we have no sales team. This changes the type of work involved at the product leadership level, and this will be something the right person is energized by.
The new VP of Product will have the opportunity to craft a unique strategy to help us serve customers, differentiate Buffer, and see great growth over the next 5 to 10 years.
Joining Buffer at the leadership level is a rare opportunity. We’re a highly customer-focused team and are squarely on a path of long-term sustainability. This is an opportunity for a great product leader to play a key role in creating much more value for customers and building something special that endures.
I’m looking forward to meeting people who are up for this challenge.
Please reach out through this job posting to apply and someone from our hiring team will be in touch with next steps.
If you want to recommend someone who you think would be great for this role, please fill out this form.
More about Buffer’s journey
If you’d like to learn more about Buffer’s journey over the years, here are a few podcast episodes where I’ve talked about starting Buffer, fundraising, transparency, and profitability.
- SaaStock: Building a remote, profitable, transparent and sustainable company with Joel Gascoigne, CEO of Buffer
- 20VC: Buffer’s Joel Gascoigne on The Moment The Founder Is No Longer The Boss, The Questions Founders Must Ask Their VCs and Why We Need A Spectrum of Different Financing Mechanisms Other Than VC
- Product Hunt: Distributed teams, extreme transparency and buying out your investors