Niels Hartvig, founder of Umbraco, of how to built a successful product

Thank you very much. I only have 20 minutes, so it's going to go really fast. My story is mostly about the love of the product. I think that should be your main motivator if you're able to create a product. So that's also my story. Some of you might be, I don't know, craftspeople or in Danish, that are actually able to build a product, so that's my story. I want to go through quickly the story, why I think it worked out, and then, of course, that we're not done yet and why we're not going to exit. As mentioned, we're the most popular CMS, so sort of a tool to build and manage websites. On the Microsoft stack, we're the most popular CMS. We've got more than 350 ,000 active installations. There's more than 200,000 active developers in the community, a little more than 1 million developers that are using it over the year. And there's about 1,000 new daily installs. So not downloads, but installs. And we're old school. It's on-premise. But that's every single day, including weekends. Okay. This is how 24 hours of Umbraco installs looked. Sometimes it's very difficult to grasp big numbers. It was actually more fun in the beginning, where you could see there's one person that installed Umbraco. Where are they? Now it's happening very fast, and sometimes you just need to visualize to just accept that you can't follow along, but you can sort of enjoy all the insane dots, that there's a new dot every one and a half minute. It's used for anything. So, we're going to talk about the big brands that makes awesome stuff, big brands that make crappy stuff, wonderful people like the Girl Scouts, and awful people like National Rifle Association. Is this recorded? Okay. And then from, again, boring stuff like government things to awesome, huge campaigns. One of the biggest campaigns ever made when Felix Baumgartner jumped from space. There was 50 million people. In one hour following the event, YouTube crashed. We didn't. And if there's any technicians, which I hope they would say it's a little bit more difficult to stream video from space than to embed the video, which was what we did. Anyway, yeah, so we're used for shit loads of stuff, including my mom's sites and the first partner in Umbraco's mom's site. So, very important. Spreadspread.com. It's very wide. So, the story with Umbraco is that there's actually four real tattoos in the world. That's how much people love it. And nobody in the company has one of those tattoos. We still love the product, though. But it started back in 97, where I was lucky to be hired straight out of high school by this guy down here called Las Pua. He had a company called Stapling Company. They made not something called CMSs. They're kind of old, but administrative systems for the internet. Very sexy. And it was a chaotic time. It's weird. It's almost 20 years ago. But it was very chaotic time. But it was a wonderful place to work. We made some fantastic technology. And it was so motivating to actually be part of that. And we actually made the first CMS in Denmark. Again, at that time it wasn't the CMS. One day, Las and his partner came to us and said ... He gathered He gathered us all. He said, we have something very important to tell you. Now we are making a CMS. And we were looking at him saying, can we go back, do stuff? But apparently that was the thing. Then that company got acquired or taken over in a hostile way. And all employees left. I went on to do something else. I swore that I would never do CMS again. Then I got hired by Austin, a very wonderful company. They asked if I wanted to be a part of a new project there and implement a CMS. At that time, it was sort of a growing CMS. So I thought, hey, that could be fun. I worked there. And it was a great product, that CMS. But every evening I came home, I said to my wife, hey, if this is the best product out there, it could be better. I think it sucks. And then at one point she just said, hey, shut up or do something about it. So I did what you have to do. I went and bought a domain. And then it sort of faded there. But eventually I thought, hey, maybe I should just try to see if I can do it. And in 2003, and when you see this screenshot, and I know it sucks, remember it's 13 years ago. Okay? Be nice. The first version of Umbraco came. And it wasn't open source at that time. But it was free. It was a tool I used for my clients or customers. The name, by the way, is a spelling mistake. Klaus. I do love you. So I thought all the products out there, they were named something like site or web or call. A lot of things. I thought it sucked. I wanted a much more friendly name. And I thought I can't build stuff. But I can, you know. I can build a simple and a key of furniture. So I thought calling it Umbraco would be cool. I Googled it because I thought it was a trademark. Got lots of results. But no trademark. I thought, ah-ha-ha. I'm going to file for the trademark. So I filed for the trademark three weeks later. I got a letter. And I got the trademark. I was like, hey, I got the trademark from Umbraco. How lucky can I be? Then two years later, that guy over there, he blogged with all the systems in the world. Or with all the CMSs in the world. Why would you pick something with a bug in its name? And it turns out that that key is called an Umbraco with N and K. And it comes from unbreakable. So I changed the logo. But today, if you Google it, in Denmark, if you Google for the right spelling, it suggests Umbraco instead. So a bit like... We don't have time for applause. So just a bit like Apple got the spelling of Macintosh changed. So that's kind of cool. We also get funny calls. Sometimes the phone rings and we say, hey, it's Umbraco. And somebody says, I want to know the strength of a quarter inch. And we're like, 12. And two years later, building collapse. It's our fault. That's our legacy. Anyway. At that time, Umbraco wasn't open source. But I was in a wonderful place, a shared office space called Arena, together with a lot of other wonderful people. And some people there started to use Umbraco. And some people were better programmers than I was and said, hey, we can make it run faster like this. Some people were designers. They said, hey, maybe you should get rid of those drop shadows. And eventually, this whole open source wave also came. But remember, I'm from the evil Microsoft world. And the CEO of Microsoft at that time, he said, quote, open source is cancer. I had something to drink. And I thought, hey, why not open source Umbraco then? That was the business plan. So one evening at Arena, I blogged that now Umbraco is going to be open source. And in 2005, the first version of Umbraco as open source came. And to remind you how long time ago that is, this is taken. This is full rest. This is full rest. This is the first Nokia camera phone at that time. Yeah. And anyway, so here we were in 2005. Everything in Denmark at that time was Microsoft. All the agencies used CMSs, but they were so expensive. So we thought, hey, we built a CMS that's better than what's out there. It's on the same stack. It's free. They're going to love it. How many was involved in the web industry in 2005? It was a great time for agencies because there was unlimited budget. So we came to them and said, hey, it's free. They said, fuck you. Because we get kickback and our customers have shit loads of money. So what we thought was, hey, this is a great idea. Our potential customers said no. And that was sort of a downer. But what happened in the meantime was slowly a community around Umbraco was bigger. When I released it as open source in February, there was about 30, 40 sites running on Umbraco. In June, I remember coming to my wife and I said, hey, now there's 1,000 people who've downloaded Umbraco. So slowly there was a community building from all over the world. And this was before Facebook, Twitter. So there was a Yahoo mailing list. But people from all over the world sort of wrote on that. On that mailing list. And it was awesome. And then at one point, we had something to drink again. And we thought, hey, let's make a conference. How difficult can it be? It can be easy. So we blocked, hey, there's going to be a conference. It's going to be in June. It's going to be free. Leave a message in the comment if you're going to come. We're going to call it Code Garden because that's also a spelling error. Because I thought, hey, kindergarten. Idiots. That are acting like kids. But it turned out that it was with a T. But now it sounds much more nice. Right? But very soft in a cold IT world. Anyway, a week before, we had no idea how expensive it is to do a conference in Copenhagen. We found out. But there was 23 people showing up. And to me, Code Garden is sort of my favorite example of how people might say that your business is a bad idea. People might not want to buy. But if you're making a great product, and if you really believe in it, and if you're building a community around it, you will sort of see it grow that way. And that was a motivator in the early, let's just be honest, quite tough years financially. And it keeps growing. And it's really wonderful to see that. At the same time, we were very lucky that the financial crisis came. I love Lehman Brothers. Because what happened was, all of a sudden, customers had no money. And we were recession compatible. So all of a sudden, these... And we had ironed out the worst box. So all of a sudden, these agencies were like, Hey, we can use this Umbraco thing. It's awesome. And some of the expensive products that had raised their prices, they told their customers, Hey, for small products, use this thing called Umbraco. It's okay for the small stuff. They used it for the small stuff and thought, Hey, this is awesome. Let's try it for the big stuff. And it worked as well there. And that was actually how we grew. We've never had a marketing budget. Anyway, time runs fast. So what is Umbraco and why does it work? It's sort of a chicken versus the egg thing. Because at one thing, Umbraco is a product. It is a CMS. It's a tool you build to create websites. But it's also a massive community of these more than 200,000 people all over the world. Thousands of agencies, etc. But one thing it's always been was the idea that, the product itself was sort of a, it was just there. It was nothing special. At that time, CMSs were very expensive. They were quite bloated. And it was sort of something special. Hey, here's a CMS. Now everything is going to be great. We said, Hey, here's a CMS. If you combine it with some great people, it will be great. And that meant that we could focus on making it very, very simple. It's one of my points in the end. So I'm going to repeat myself. But listen, people come for the bells and whistles. And that's easy to sell. But they will stay if you get the basics right. They will also come back if you get the basics right. We've seen, you know, all of a sudden it was not enough to be a CMS. It should be all sorts of stuff. And then some people started moving away from Umbraco. They found out that these products didn't work. So they came back because they sort of missed the simplicity in our product. And we just kept focused on getting the, the, the very core basics, really nice. And that's something we've always done. And to many, in many ways, it's the same as Lego. Lego, wonderful product. They got the basics right. And all of the sudden they should be everything. They were also almost collapsing. And it took a guy saying, Hey, this is, this is what is Lego. This is what is important. Let's focus on that. So actually, make, make the toy popular again. Also another thing, transparency. It goes without saying when you open source, uh, it's very difficult to hide things. So we just taking that to the extreme, um, uh, except for the first 11 years, it was my own private company. So you couldn't see our fan financial records. So that was the level of transparency. Um, but anyway, um, uh, you know, the source is open. Our roadmap is open. Our bug trackers open. You can alive see what employees in the company is working on. Um, uh, et cetera. And that means that people actually want to participate, which is probably the most important thing ever today for a product that you don't have customers only. You also have people that participate in your product because that way it gets much, much, much better, faster. It also means that you can create a platform, uh, because people have faith in your product. They can see, uh, what's going to come. They don't fear anything and they, uh, dare to build a business on top of it. So today on Bargo is a massive business. There's a brago solutions made for more than $3 billion a year. Um, and that's because people can actually trust, uh, in the project and in the product. And exactly that, that makes it, uh, more than a product. It becomes an ecosystem in itself. Um, so bottom line, yes, uh, we could, uh, we are tiny company. Uh, we're just with about 25 people, uh, in the company. Uh, um, but there's, like, as I said, more than 200,000, uh, active developers in the project. Uh, and there's, uh, a thousand new, uh, sites, uh, launched every single day. Uh, now we are, uh, actual 355,000 installs. And then people say, oh, you must be rich. And I say, no, damn it. Uh, I make a very good living. I, I don't complain at all. I get a decent salary. Everybody in the company gets a decent salary and every, every thing that comes in goes back into the product because we are, we are not done at all. Um, uh, so far our business model has been completely random. In the early days we did implementations. We were horrible at doing sites. Then people started saying, Hey, we want to learn how to do embargo. We said, Hey, we could do training. Would you pay for it? They said, yes. Uh, and then we could make money. So peer and I, which was the first employee, we would go like, shit, we are broke in two weeks. And he would go, let's do a course. Yes. So we did a course. No, we had money for two months. Uh, and that just sort of kept on going. Then people start calling, uh, people, uh, from the, uh, the us. Some of them said, Hey, uh, this is this and this, we have an open stra, uh, source strategy in our company. I said, Hey, that's cool because they need to, people didn't know anything about open source. I said, that's awesome. And he said, yes, but it, uh, our own source strategy is that we are not allowed to use open source. I said, that sucks. And he said, yes, but we want to use your product. Can we pay for it? And then it's not open source. I said, what are you talking about? They said, can you send us an invoice and say that this version of home private that we're using, uh, isn't open source comes with a special license. I said, okay. Uh, and that actually turned into what eventually becomes sort of a support product, uh, phone brago. Uh, and then eventually we were able to grow revenue to about 10 million Corona a year, which was sort of enough to finance these 25, people, uh, all along the way, all along the way. We knew that one day if we got the product, right, we would probably get rewarded as well. I mean, it, it, it's a no brainer, but the motivation has always been to make a really, really great product. And a couple of years ago, there was a very obvious, uh, opportunity that came, uh, uh, where Microsoft came to us. We're always been a very good partner. They said, Hey, in, in, uh, in a year, we're going to launch a cloud platform. Uh, we would love for you to be on, uh, on it. Here's, uh, you know, just use it as much as you want. Uh, see if you can build a product around it. You're not going to pay for it. Uh, and that's actually very interesting. The reason why I have Netflix is because what's cool about Netflix, isn't that it's a streaming service or that they are making their own shows. What's very cool about Netflix was 16% of their revenue wasn't based on fines. That way they could build a subscription product. Contrary to blockbuster, uh, uh, who actually, you know, the gross, about half a billion dollars on fines. Um, the same thing with us, we've never made money on each installation. So contrary to a lot of our competitors, uh, actually making a service or a SAS version of whom Bronco that compliments the open source version is an opportunity for us, not a threat for all the others. They are told, Hey, you have to go the SAS route. And they're like, fuck, we make money on licenses. Then we have to divide that. Those fees for X, number of years. How do we compensate our huge sales force? We don't have those issues, which is amazing. So it means, Hey, all of the sudden we can launch a service, which we did back in November. We thought, Hey, it's going to take nine months, took three and a half year. Um, uh, but it's good. Uh, uh, uh, and all of the sudden we, we expect the 2% of the installations will eventually use as a service. Uh, and there will always be the open source version of whom, right? So it's our, it's sort of our culture. Uh, we launched in November. We're signing up huge companies for the platform. We are spoiled because we have that huge marketing channel. So Carlsberg, uh, DBU NFL, uh, co-op, a lot of clients are using it. And we're pretty sure that we will get about a hundred thousand customers, uh, in 2021. That shit loads of money is still only 2% of people installing embargo. And it sounds crazy. When we look at our model, we're like, fuck December, uh, 2021, we're going to sign up 6,000 customers in a single month. And then we're like, eh, it's impossible. Then we look at our install numbers and say, oh, it's every fifth customer right now, or every fifth install right now that should use our service. So it's sort of realistic. Uh, so the point is it's a fantastic, right? But we're just getting started. I'm going to go one minute over time. Cool. Okay. Uh, so here's, uh, just a couple of, uh, last two slides. I promise a couple, a couple of last, uh, uh, lessons. One thing that I've learned, uh, over the last, uh, more than a decade is when you start the product. And again, if you're a product guy, uh, uh, slash girl, then you are the product and you are the culture. It's very important. At, at one point, you're going to hopefully hire people that are extremely good at what they do. Much better designers, much better developers, much better, better business people, um, better at operations and hopefully better at accounting. Um, uh, but they are not all the things combined. You might suck at all of the things, but you sort of understand all of the things. And that was why you built the product. So make sure you don't lose that. Make sure you don't get so impressed, so humble with, uh, some of your great employees, some of your advisors that you sort of lose the confidence that you actually have a meaning, uh, in the product because else they could build it, but they didn't. Else, people wouldn't love it, but they do. again, I mentioned this one. And then another thing, I think people are too busy. I think when I see, see startup pitches, I'm like, yeah, we, we need to do all this and it's going to happen in 12 months. Fuck it. You know, make sure that you can, you know, you have enough time. I've been doing this for fucking 13 years. It's crazy, but I love it. Uh, and yes, it's been hard work, but it never felt like that because I love it. It's like people saying, ah, it's so hard at work. And then they go home and run a marathon because they love running a marathon. Doing, if you do love what you do, it will never be hard. My tough, but never hard. Um, but make sure that you, you know, take some time. How many here, uh, eat primarily organic food? Where's the pen? Yep. Uh, yet, uh, you might be looking for a way to fuel your company. One of the things that's wonderful about organic food is that it takes time. Uh, make sure that you, your company, uh, gets the time as well, which also means make sure that you don't put yourself under too much stress, whether that's getting funding from outside or whether that's, um, uh, not making sure that you have a turnover. Focus on getting a turnover early. Uh, that was mentioned earlier today. And then one last thing. Uh, I think that we are very spoiled in this room. Doing what we are doing. First of all, we live in very peaceful times. We're, we're able to actually spend time building these things. Um, uh, and that's thanks to, uh, generations of people who made sure that we have the freedom to do it. Uh, I hear people complaining about, oh, tax rules in the European Union is, uh, totally complicated. Could you shut up? And for one minute, appreciate that you can go in on a Monday. You can go open your laptop. You can say, Hey, I want to start a company. 15 minutes later, you've got a company. You don't even have to work with, tell her on Nets to accept credit cards. And by, and by Friday, you can have a company that make business all over Europe. Appreciate that. Enjoy that. You have to focus on silly tax rules because 20 years ago, it wasn't even possible. Uh, and then use this time. Use our luck for our generation to build something that makes this generation, uh, something to remember as well. Make sure that whatever companies you build, serves just a tiny purpose. And I'm not talking about saving the world. I'm just talking about making great companies. Uh, that was all. Thank you very much.