20VC: Monday.com: Scaling from $6M to $120M in ARR in 3 Years | How Monday Have Built the Best Performance Marketing Engine in SaaS | Going Upmarket, International and Multi-Product; The Biggest Lessons and Mistakes with Eran Zinman

25:29Do you appreciate how strange that growth is? And what I mean by that is that when you're doing it, are you like, whoa, we know that we are one of the special ones. I'll tell you something funny. You mentioned Jason Lampkin. Don't tell me you told him and he didn't respond. No, no, no. One of the reasons I didn't reply to your email is that I don't use email, but I actually made Matt Jason a few years ago. I was one of his biggest fans. When we started in 2012, 2013, nobody knew about Sass, anything. I became the biggest geek on Sass. I read every article. He put on Sass, or he wrote answers on Quora, if you remember.

26:07I remember I went to Roy and I told him, you know, I read an article from Jason, he said that when you get to one million, you need to get to 10 in four quarters. And then once you get to 10, you need to get to 100 in like, I don't remember, like five or six quarters. And I said, look, we have to do it. We have to do it. You know, Jason said so. And when I met Jason a few years later, I told him like, thank you for the guidance and everything. And it was very ambitious to get that goal. You told me, you know, I was talking about like the best companies, the like what investors want to invest into that.

26:41And just I took it as grand like literally this is what we need to do. So I guess ignorance is a bit sometimes. Dude, that growth isn't incredible. When you look back at that growth, what broke first? Because scaling companies is very hard. What was the first thing to break in that intense period of hyper scaling? I think at some point when we reach 50 or 60 million, you know, the performance market engine was working really well. But at some point you understand that if you want to reach to 1 billion, Actually, when we got to 50, we built a dashboard. We called the road to 1 billion. We built a vertical TV in the office showing that we want to reach 1 billion by the year of 2023.

27:22We actually missed it by one year. It was like a vertical dashboard and we said, we are here 50 million. We need to get to 1 billion. And we put it for everybody to see in every office around the world. And I remember when we sat down, we said, But we cannot do it just with the performance marketing engine because when we ran the math, we had to invest so much money into performance marketing in 2022 or 2023. It didn't add up. So it was obvious to us that in order to scale to that magnitude, it's not enough to have a very efficient performance marketing engine. We need to build a very robust sales team and to expand our customers because eventually when you reach one billion and you want to grow 30%, you have the majority of revenue need to come from existing customers.

28:04I read and our teams are amazing now for research. So when I say I read, I was given the numbers. But I read that you spent in 2023, 17 million a month on performance marketing. Yeah, something like that. A little bit less, but around that, yeah. How did you spend so efficiently in performance marketing when so few others did? Again, it's all thanks to the amazing engine that we built. We're very efficient in terms of cashflow, you know, over 25 % free cashflow positive. So we just scaled this cashflow machine to the extreme. Did you focus on a small number of channels and really hammer them? Did you spray and pray and see what, what?

28:50How did you approach the kind of portfolio approach to channel spend? No, we never spray and pray. We don't believe that pray, I mean, I pray sometimes, but it that doesn't help you with performance marketing. We measure everything. When we build a new campaign, we track everything. We avi test everything. Why was YouTube so successful? Let Monday has crushed YouTube. You know this as well as I do. But why? So first of all, the rebrand was a key part of that. That was one of the main reasons we rebranded the company because we wanted to pick a name that's people can remember because when you see an ad, you have about five seconds of attention to capture people.

29:28And again, we managed to track when people saw the ad, we would not just track links, but also people viewing the ad. And we saw there's a great ROI on that, and we managed to get a great presence on YouTube. And it was, again, cost -effective to do it the way we've done it. What channel did you spend on that you wish you hadn't spent on? Look, Facebook was amazing for us because I think it just changed the trajectory of the company. But definitely, you know, AdWords, YouTube, we tried everything. We're doing everything. But which one's least effective? Least effective? Yeah, which one are you like, we spent on it and it was a waste of money.

30:03That's not the way I look at it, because it's not about effectiveness. It's different audience. When people search on Google, they have a specific intent. I'm looking for a project management tool. But some people are not searching for a project management tool but are browsing Facebook. And there's two different audiences, but both of them can be potential customers. Some people have intent. Some people have, I need a new platform from the back of their minds, I'll just go on Facebook and suddenly a commercial about working and doing, huh, maybe it's an opportunity. It's a different kind of audience that we kind of target.

30:37Is it not like the most expensive ad word? Like CRM, respectfully, the competitive land field or land mines that you kind of face is intense? Is it not the most expensive ad word by? It is, but it's very cost effective for us. If we go forward, we build our multi -product strategy. So basically what happened, and maybe I'll give you some background before we talk about marketing around that. So basically people, we got everybody using Monday. And one thing that was super surprising for me is that a lot of people use Mondays at CRM. And because it's so customizable, you can build your own boards, which is like kind of the equivalent of a table.

31:14And they build context, they build deals, they build dashboards, automation, like a full flash CRM. Like why? It takes so much effort to do that. I'm not talking about a few hundreds or even a few thousands, tens of thousands of accounts built CRM on top of Monday And the same goes for death the same goal for service those products were not born out of same air They were born because customer demand and when we interviewed people like why did you do it? What did you go all that effort to build a full -fledged CRM when you could just buy off -the -shelf product and they said like we want control I have an idea was the best CRM for me I don't want to use off -the -shelf product.

31:53It's very rigid. It's built in a very specific way. They told me our only option, basically, was to go to Salesforce because it's enterprise -ready. You can customize it, but the cost of doing that and the complexity of customizing that software. And Settles is just an example. I'm talking broadly about enterprise products. They look for something different. And we gave them on one hand the freedom to build their most amazing CRM, but they've done it themselves. No third party vendor, no special IT team, they build themselves and they felt proud about that CRM. So eventually we said, look, let's build a CRM product, let's package the Monday platform into a full -fledged CRM and build like deep feature, you know, call recording, call analysis, email marketing, and we've done that.

32:41That strategy has been a huge success on multi -product strategy. You know, the CRM today is growing faster than what Monday did back in the days. What's the CRM product today out? Ravinyuize? The last investor day last year, it was growing from almost 0 to 25 million in one year. Are we seeing the complete bundling of SaaS tools? You mentioned that the cool recording elements, you mentioned quite a few different products within that, which kind of bluntly kill a load of other adjacent products. Are we seeing the bundling of SaaS tooling again? Look, I don't think Monday will replace all SaaS tools on the planet, But our vision, our grand vision is that from day one, we built a platform, we didn't build the product.

33:23I think that's something that a lot of investors got wrong about what we're building. Maybe we didn't explain it properly, but we didn't build a work management or project management tool. From day one, we built the equivalent of force .com, which is for Salesforce. We built a generic platform, not about work management, not about CRM, just the building blocks. And then Work Management was the first implementation and then came CRM and Dev and service. The effort that it takes us to customize the platform as a CRM as Dev is minimal compared to the compound value that we get because we build it on our Monday platform.

34:00And eventually I see definitely CF Future where a company by several tools and consolidated on Monday for the core business use cases, whether it's CRM, Work Management, Dev, Service, and the compound value of using several those tools, the flow of data, automation, processes is a huge value ad. The reason I'm excited, so much about the future of the company, I really feel from the bottom of my heart, is that we have one of the biggest opportunities today in the software market, and we have to execute in order to deliver that. But I really feel that we got everything right. We just need to scale the company to the next phase.

34:37What do you know now about going multi -product? that you wish you had known when you went multi -product. Maybe one lesson is it's not just about the product itself. Go to market is as important and every product have a very different go -to market. It's unbelievable. It's so different, different buying dynamics, different buyer, different decision process, different way people consume ads. They're all special in their own way. As a result, do you have to build independent teams for every product? How do you think about how the company changes with the additional product line that's built. Yeah, that's exactly how we think about this.

35:13We have different business units dedicated for each product. Every product is in different phase. So CRM is more mature and than dev and then service and obviously work management is kind of the most mature product. But every product has its own team, its own marketing efforts, dedicated salespeople, and we scale them. It's like small startups within the company. Dude, when you look at the revenue lines today, Monday is like what's Monday call revenue? I mean, we now we reach one billion if they are about like three months ago, I think. Okay, great. So we've got a billion of error and then CRM is like 25 as we said in the yesterday.

35:48Yeah, that was like you before that, but it's bigger today. What's smaller line of revenue today will be one of the biggest lines of revenue in five years time? Definitely CRM will be very dominant going forward. Dev as well. Well, actually the moment we got to Monday's service is unbelievable. Still early days. Who do we compete against for Monday's service? We'd CRM, we'd compete with HubSpot, Salesforce a little bit, Zoho, Service. We can see Giro Service, FreshDesk, a little bit of service now, although they're very focused on the enterprise. When we look at the names that you just mentioned, like on CRM alone, respectfully, wow, how do you advise founders who are told, oh, that's a really horribly competitive industry.

36:33For me, it sounds like it's an opportunity to disrupt that industry. You know, this player has been dominating each one of those industries for a very long time. People willing to pay a lot of money to use those tools, they bring a lot of value. And I think it's just an opportunity to disrupt that market. Do you pay attention to competition? When I built my first startup, I remember that I used to log in to, you know, tech -run, or read tech news, and every time I saw a competitor that I felt was competing with me, I felt this weird feeling in my stomach, and then I swear to myself, and then never going to do it again.

37:04I'm just going to focus on myself and my journey, so I don't. So you don't pay attention to competitive products? I mean, we analyze them and we look at them and see what they're doing, but I don't feel like that's what's going to stop us in any way. I feel if anything, it's in our hands. It's in our control, in our executionability. Okay, so when we think about executionability with an eye moving forwards, you're an incredibly insightful Smart founder everyone is questioning horizontal software's ability to sustain in the next wave of AI How do you respond to the question of Monday sustaining when we live in a world of agents when we see a new generation of AI Impact all of that's for me.

37:45This is one of the things that excites me the most because what we already seen once we now built a lot of AR functionality is that people use AI inside Monday. So, and so easy for them. We took the same principles of easy, busy experience and custom, custom ability and a standard of building like a dedicated AI product would just allow their own customers to integrate AI into their own workflows. So we helping them today make their own work more efficient. The agents not make Monday a simple system of record or a database, given they do all information and data, collection, retrieval, and migration, and then bring it back to Monday.

38:27And is that a good thing or a bad thing? I think it's an amazing thing. I think that there will always be room for system of records. I don't think that anybody will be willing to put their future into an AI bot without having the ability to question what's going on, see dashboards, graphs, and all that data. So I think it's very important to track the data. I don't think that will go away. Maybe some of the work being done by people will be done by AI, but it doesn't take away the fact that you need to analyze the data, you need to see it, you need to track it. And also I think there's still going to be a substantial human element that will be part of that.

39:00So I don't think that SAS tools will go away. I think if anything, some of the work can be replaced by AI, but still the fundamental principle of why those tools exist is strong and will remain going forward. Do you think AI will change the future of SAS pricing? for sure for sure you know I think a lot of Sastos have been very focused on sit count and you know once you replace you know human labor with AI functionality pricing should adjust and maybe be more focused on consumption in addition to seats can I go to the IPO why did you decide to IPO when you did you know we live in a world now where there is such extended windows of private capital you don't need to IPO as we're seeing was striped data breaks stalling how How did you think about when was the right time?

39:45First of all, it was more random that you might think. We just felt that eventually we want to build a huge company. When we look at the most inspiring SaaS companies in the world today, they were all public. I think it's as a layer of maturity into the business. I really liked the fact that we're a public company because, first of all, public market investors really surprised me. They're way more sophisticated than what I thought. I thought that initially when we went public, I thought that it's all about the private market, those investors, but public market investors are super sophisticated and smart.

40:21And also, I think that cadence of quarterly earning reports really add the great cadence to the company. So all in all, I think it was a great move for us as a company. You go out at 7 .5 billion? How does that feel? You know what? You tell me you like stories. So let me tell you a story. I'll tell you about the day of the IPO. It was long two weeks in New York. It was actually on the edge of the COVID kind of lockdown. So I think it was one of the first IPO that was done in person after the COVID lockdown actually. And it was all in Zoom because before COVID used to take like a bright jet and meet investors and do like a bus tour, but it was mostly on Zoom.

41:04So we were exhausted like a day before the IPO. So here it is, the IP of the big day. We go to NASDAQ. It's a beautiful ceremony. I remember seeing kind of the opening of the trade day. And then a few hours go by. I do a bunch of interviews on TV, newspapers, and it's like four or five PM. I look at to my left, I see Roy, my co -founder doing interviews as well. And we're alone, like literally alone. Everybody left. We're alone. I had like this blazer that I never wear but for the IPO. We were both matching suits. We took off the blazers and we walked to the hotel like 25 minutes like with the white t -shirts.

41:48We walked to the hotel. I go to my hotel room. I sit down on the bed and just stare at Netflix for like three hours. That's the IPO day. That's the anticlimax of the IPO. But the day after I was that hard because it's like you know and triathletes or iron men or people who run a marathon There's so much build up and then it happens and it's like oh Yeah, the day after when I woke up I opened my iPhone Opened a Stocks app and added Monday and that was the most exciting I felt it in throughout my old body when I saw the Monday Taker. It just felt real. What was first 24 hours performance? I think we went up like 10 or 15 % so it looks good.

42:33It's a tough morning when you wake up and it's like, Oh, yeah. You mentioned Roy there. You are co -CEOs. That is a crazy arrangement in traditional startup land. It's worked phenomenally well for you, which is amazing. What have you done to make co -CEOs work? When we started the company, actually, Roy was the CEO. and I was the CTO. So within starters, co -seos, but I remember like a week into the company, he told me, look, I want us to do everything together. So I told him, of course, like we co -founders, but he told me, look, everything, you know, raise money together, be co -seos, they told him, okay.

43:13And we would meet investors and it was weird because I would sometimes talk about the business and he would talk about technology. And then next meeting will switch roles. I think we got everybody kind of confused. But after a while, he just told me, let's make it official. Can I name ourselves, co -seos, just so we don't have to explain it to everybody. What's so special about him is that it's one of those people that has no ego. Like, you want to do what's best for the company. He doesn't care about his own title or to be on top of somebody else. We spend a lot of time together. We actually, we walk home every day, like walking.

43:47We live in Tel Aviv, so we walk every day. We spend hours just to sing and talk about things. You walk home every day together? Wow, what's been your biggest lessons on board management? You have a great board. First of all, my number one rule is never surprise the board. Never. That's like the worst thing you can do. Actually, one of the things we built into big brain is, I don't know if Avi told you, but we used to send every day like a daily SMS of the company performance every day to our board members. Whether it was good or bad, it was automatic. So when they came to the board meeting, they knew the numbers better than I do.

44:21Like they saw everything. like the board meeting was basically done on the numbers and the metrics because they had full transparency and that's something that I really believe inside the company knows of for our board members. And if we had something that we wanted to make a decision about, we always talk with each one of them individually before the meeting because the last thing you want is to get into a ego fight. So just get their opinions and change the things before the meeting. So we talk more about the future than waste time on disagreements. That's so interesting. I wonder if that's possible, to for a fund.

44:52I'm just wondering now if I could actually have that with my investors or at least my board. Well, like whenever we had a change of marks for a new investment or whatever it was, okay. One to think about. Listen, I could talk to you all day. I want to do a quick fire with you. So I say a short statement, you give me your immediate thoughts. That's not okay. Okay, just no, no tricky questions. And then that never took you. What do you believe that most around you disbelief? Maybe something that's not intuitive is about sending goals. Most people, when they said goals, they try to figure out what they can do.

45:23I never think about it this way. I'm thinking about what I want to achieve and then try to figure out a way to do it. Because when you build like a plan for next year, bottom up, people will kind of think about a plan of what they've done last year and let's do it again with small adjustments. Always think about how can we do it above and beyond and then just change how people think about what can be done and how they can achieve it. Why don't you email? I never got anything good out of an email. I'm an extreme believer in focus. You ask me about investments. I don't do investments. I focus 100 % on the company and I always try to set my own priorities because I think all those tools really distract you.

46:00I always try to look inside and try to understand what's most important for the company. And when you start going to be managed by external tools, I think it's a huge distraction for the company. It sounds wonderful, dude. But how do you actually do that because when you have like investors, board members, customers, they get in touch by email. You set up investor meetings by email. So how do you not do email? Just I'm so fascinated. No, I mean, we have other people in the team that use email for coordinate meetings and other things. It's not like a company rule. I just don't do it myself. And so you slack and what's happened?

46:36Yeah, we use Monday a lot to sync. We use Slack. What's up? Kind of more instant communication What's your biggest lessons on priority setting? Your fascinating mind comes at focus. What's your biggest lessons on priority setting? What I found about founders is that you try to avoid the hardest things in your business, because usually the hardest to change. And I always think to myself, if something is very painful, that's the right time to get into it and fix it. And I always try not to avoid going down and deep into the hard things, because I think eventually those are the things that cause stress.

47:15And once you deal with them, it just changes your mindset and the course of the company. So I always try to focus on the hardest things and try to figure out what's now working in the company. What's the single hardest element of your day job? It's cozy of Monday. I think fighting the right balance. I think that for many years I didn't have the right balance of family life and work life. and I was really stressed and I've made a decision a few years ago to make a change. It's been a lot of time with my family today. I'm more efficient. What have you changed to allow yourself to do that? Actually, I went to therapy and one of the things my therapist told me, which really resonated with me.

47:53She told me that, you know, I can do the extra meeting. I can do the extra thing, but at the end of the day, I'm a leader in the company. I'm leading the company. So people look at me and when I'm exhausted, when I'm stressed, when I don't have patience, it just reflects on everybody else. And I need to take care of myself in order to be able to take over the company. And it's really hit deep on me. And I just felt, I should treat myself like a professional athlete. I should be at my peak all the time. I mean, you look wonderful. But how do you know? No, you do. You're really fantastic hair, by the way.

48:26I've been thinking about how this is a solid hair. How do you look after yourself well today, then? Actually, I exercise every morning. What time do you get up? I have three little kids. So my baby usually wakes me up at just like 6am. I try to exercise every morning before I go to work and then I try to spend time with my family in the evening. It's not always possible. It's really something that charges me as a human being. Do you need much sleep? Yeah, I got the ordering, so I've improved my sleep. So when do you go to bed if you get up at 6? Well, I'm embarrassed to say, but usually like 10 p .m.

49:06Wow. Yeah, that'll do it. Do you watch your diet? Are you healthy? Yeah, well, I hope so. But yeah, like I said, I tried to optimize my sleep, my nutrition, my exercise regime. I just feel that I need to be sharp, I need to be at my peak, I need to take care of myself, you know, to take care of the company. So I really treat this like professionally, I guess. I listen to a lot of podcasts about supplements and just health -eliving, I guess. You can be CEO of another company for a day, which company did you choose to be CEO of? Wow. I'm fascinated by Microsoft. I think that's a company that's done one of the biggest transitions in the history of software or tech.

49:46It had its lows, it had its highs, but I think I'm really interested to understand what was the transition. I think the so -tie of the CEO of Microsoft have done its tremendous job pivoting the company. So it would be interesting to see this from the inside I guess totally get you an agree if you were Mark Banny of today What would you do with Salesforce? Salesforce is an amazing company. It's an inspiration It is so much credit for building the SaaS industry If you could ask him one question. What would you ask him? One question for Mark I think it is one of the people that probably knows the best in the world of how to build you know a sales machine at scale So I think there's so much I can learn from him about how to do it.

50:26I think he probably forgotten that I didn't learn yet Probably a question around that I guess. What about the way your parents brought you up? Are you deliberately not doing with your children? Oh, wow. It's a good one. Look, I think my parents first of all, I love them and I appreciate the way they raised me and I think they taught me a lot of important lessons. I think my dad taught me to go deep on everything I do, everything. He always asked me like, why? He always asked me to, he forced me to understand every decision, every thing that I've said. He always asked me like, explain to me why.

51:00And I think just developed a sense of me that I always try to understand why and dig deep. And I think my mom told me a lot about compassion and how to deal with people and to be ambitious and to be a winner, I guess. Maybe something that I've learned along the way that maybe I do differently is also to accept different paths of how people grow up and what they care about and what's not. I try to be very open with my kids and try and send what they care about. I'm not trying to push them in any way and just let them be who they are. I often think about what is a successful person, like what defines success.

51:38Is it status, is it money, is it professional career? Is it happiness and I don't know what the answer is? It's not it's market cap. I just want my kids to be happy. I don't know how what the best way to achieve it, but that's what I want for them. Why don't we you happiest with my family for sure? That's the moment I find peace inside. I love the company. It's one of the most meaningful things I've done in my life, but spending time with my kids, it's like the best thing for me in my life. What stage of the company did you find most unnatural for you as a CEO? Everyone, every stage now. I've never done it before.

52:20It's a new experience for me and I learn a lot of things along the way. But I want to continue in this journey and I want to keep learning and evolving as a person. Final one, what question are you never asked by employees, by investors, by board members that you should be asked, you think? Oh, wow. You have tricky questions, Harry. I don't know what's the answer, but nobody asked me why we built this company. Like why did we go on this journey? Been an entrepreneur. It's not intuitive. Why people do it? It's a big question. Why did you decide to be an entrepreneur? My question life is to find out exactly, but I think it's a combination of trying to prove myself, I don't know, to whom, but maybe to myself, and do something meaningful and good that affects other people.

53:06but I don't have the full answer yet, I guess. Arann, nice to appreciate you putting up with my deep and meaningful questions, my bluntly meandering around different topics. You've been fantastic, so thank you for joining me. Thank you, Harry. It's been a pleasure. BELL RINGS My word, I'm such a fanboy of the Monday business. If you want to see the episode in full, you can find it on YouTube by searching for 20VC. That's 20VC. But before we leave you today, Harvard Management Company is constantly seeking out the next generation of great investors and entrepreneurs. HMC has managed Harvard University's endowment for nearly 50 years and was one of the first institutional investors in venture capital.

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