Excellence in Action


Tidemark Founder Dave Yuan interviews Esben Friis-Jensen, Co-Founder and Chief Growth Officer of Userflow.

Bootstrapping, like all forms of strategy, is about being cognizant of your tradeoffs. This interview provides an inside look at the tradeoffs that Userflow made as the company bootstrapped its way to $4 million in ARR with just 3 employees. The company has been extremely thoughtful about hiring, product decisions, and support, all informed by questions of financial outcomes and work/life balance.

Taking inspiration from successful bootstrappers like Jason Fried of 37signals/Basecamp, Userflow rejected the typical venture-backed path. This discussion gives insights into Userflow's techniques for efficient development and scaling while maintaining work-life balance. By bootstrapping, Userflow has been able to stay nimble and make decisions based on customers' needs, rather than chasing fundraising milestones.

Esben Friis-Jensen shares the differences between his previous venture-backed company and Userflow's bootstrap mentality. He also discusses Userflow's ambitions, which center on continuing to build a great product and business rather than pursuing an exit. For any software founder considering bootstrapping, this interview offers an inside look at how Userflow has made it work.

We hope you enjoy this conversation with a new bootstrapped legend. 

If you’re interested in staying in the loop when new episodes of Bootstrapped Legends launch, you can subscribe here. If you're a Bootstrapped Legend who wants to tell your story or learn more about working with us, please reach out to us at knowledge@tidemarkcap.com.

Dave: Esben, very nice to have you on Tidemark’s Bootstrapped Legends. So great to have you come share the Userflow story. Userflow is a bootstrapped software business out of Denmark that recently came on our radar. Esben, you can start off with a little bit of your personal background and a little background on Userflow.

Esben: Sure. I’m Esben. I’m one of the founders of Userflow. I have a cofounder, Sebastian. Prior to Userflow, I cofounded another company, Cobalt, which I was with for eight and a half years. We took it through Series B, hundreds of employees. It’s a cybersecurity company that does penetration testing, so that was exciting.

But at some point, when we got too big. I wanted to go back to the startup roots, and that’s why I decided to found Userflow, together with Sebastian. We are a very different company because we are 100% bootstrapped, and only three employees still. That’s very different.

Dave: Very different. I love the way you introduced yourself initially, which is at $4 million ARR and three employees. [Laughs]

Esben: We’re very proud of that, that we’ve been able to achieve that with such a small team. And we’ll keep going.

Dave: Absolutely, and you should be. 

This is really neat – as part of our Bootstrapped Legends, we had interviewed Jason from Basecamp, and somehow got on your radar. You kindly introduced yourself to us, and I love getting to know Userflow, love getting to know you. I’m really excited to share your bootstrapped journey with our listeners. How did the journey begin? Tell us about how Userflow got started.

Esben: It was my cofounder, Sebastian, who got the idea. Back in the day, he worked at Google. He had done a startup prior, and decided he wanted to do a new startup. The idea he had at that point in time—and he even talked about me joining him—was to basically make a video recording platform that could create demos that were easy to keep up to date by re-recording them over again. But he wasn’t seeing a lot of traction on that product. It was kind of a hot sell, [though] he did have a few customers.

As part of that product, he had built a guide inside the product. People kept asking him about that guide and how he had created it. He had basically coded it himself, so he was kind of surprised about that. He went out to the market and looked and there was a lot of competition, but he didn’t like the way it was being built. He didn’t find it super user-friendly, or sophisticated enough. He decided to create a tool that built these kinds of guides, and reinvented the way you build them with a Kanban interface and some other things. It immediately took off. Everybody loved it. 

He asked me to join again, to head up the growth part of the business, to scale this to as many customers as possible. At that time, as I said earlier, we were a big company at Cobalt. It was still exciting, but I really enjoy those early phases. That’s why I decided to say, “Okay, let me join Sebastian on this exciting new journey.” 

I also saw that a general trend in the market was this whole product-led growth, where more and more [products] were becoming self-service. That was something that really interested me. Userflow is a tool that kind of plays into that whole product-led growth ecosystem.

Dave: Very similar to Slack, the initial idea didn’t quite work out but the tool actually was quite powerful.

Esben: Yeah.

Dave: When you hear these stories in retrospect, it’s like, yeah, of course, that’s great. You move on very quickly to the tool, and you go on to greatness. But there had to be a moment in time where [you think,] the first idea didn’t quite work out, so how do we know the second idea is going to make it? You described it as immediately going on to success. Was it immediate?

Esben: It was the same with Cobalt. At Cobalt, it was actually funny because our initial product was bug bounty programs, which was a different way of delivering security testing. Initially, we also had okay traction there. We got customers, but over time, one or two years later, we realized it was not growing fast enough. That’s why we decided to pivot into penetration testing.

It’s not always that fast to get that feedback. Sometimes you get it a bit later. You can still build a strong business, but you realize at some point, maybe it’s not going to be as strong a business as you prefer. Other times you just hit the nail and see that it’s a growing market.

One validation that was already there for Userflow is that there are 20 other competitors. It was already an established market, whereas with Cobalt we actually were building a brand new market. I think that was one big thing that meant we could grow faster. We took an existing market and just built a more user-friendly and sophisticated version of a product in that market. When you do that, you’re more likely to get a product market.

Dave: That makes a lot of sense—existing market, so you know there’s demand. You guys were actually the user, so you understood why the product might be superior, and also the initial drawbacks as well. There’s a little more conviction there. That’s awesome.

Esben: Exactly.

Dave: Tell me about the really early days. Your cofounder, I believe, initially started by seeing the market through just giving out free trials. 

Esben: The world that Sebastian comes from, his first startup was an accounting startup. With accounting startups, it’s always just been free trial. Many of them have premium. For him, it was a very natural path. I don’t even think Sebastian thought a lot about product-led growth or anything like that. That’s just how he built SaaS products: there needs to be a free trial. As a true developer, that’s how he wants tools to be, so that’s how he builds them. 

It’s kind of coincidental that we then became a very strong product-led player, based on having this developer mindset. And we’re actually not selling to developers [with this approach], we’re selling to customer success and product managers, whereas many businesses traditionally have been more sales-led when selling to those audiences. For us, it was a blessing in disguise that he started the business with that in mind, and doing a free trial as the baseline. We were able to build on that when I came in and added additional product-led growth labels to that model.

Dave: My impression is that Sebastian was offering free trials, not necessarily in a premium model, but just to get the product out there.

Esben: Yeah. I mean, it’s the best distribution model you can have. Every time I meet a new founder, I say “Okay, what’s your product? If it’s an existing market, then you should just do a free trial.” They can get much faster product feedback and open up the product. I think many companies stay in private beta/ waitlist mode for too long. It reduces their possibility to distribute the product. The faster you can make it open to the world and get product feedback, the better.

Dave: Yeah. What was your decision calculus? You knew Sebastian beforehand. You saw the pivot and it started to take off. What got you over the hump? What made you join in?

Esben: It was this mixture between three things. I would say one of them [is that] Sebastian is a good friend. I met him in San Francisco and always liked him. I knew that he would be a good person to work with. Number two was that the stage we were at with Cobalt was becoming too operational for me. I wanted something more startup-y. Then number three was that Userflow, the product, was playing in this product-led growth market that I found super interesting. I’m a strong believer in product-led growth as the best model for SaaS businesses.

Dave: Yeah. Initially, you decided not to raise money [with Userflow], despite Cobalt raising money successfully and scaling a company successfully under a venture model. What was the calculus on Userflow?

Esben: To start [with Cobalt], that was our first startup for all of us. We were four Danish founders who didn’t know anything about building companies or anything like that. The natural path was to join an accelerator, raise money, and go from there. Then, as we grew, we did that.

One thing we did smarter than many other businesses was that we never raised huge rounds at unrealistic valuations. It was always a very pragmatic approach to fundraising. Sometimes, we were forced to it, because we weren’t getting that interest from the big-brand value VCs, but it was a blessing because it allowed us to pivot from this bug bounty model into a pen testing model, and do a lot other stuff that wouldn’t have been possible if we had raised an insane valuation.

I would say at Cobalt, it was just the natural path. You raise money, you build the business, you grow the business, you hire more and more people. [Userflow] was my second time building a company, and the same for Sebastian, and that’s where we realized we don’t need to raise money. We have money in our bank accounts, so we’re not in desperate need of it. Let’s see how far we can get with bringing this pure software approach and product-led growth, and be customer funded instead of being VC funded.

Dave: Did you come to that view from first principles, or were there examples that you saw doing it successfully?

Esben: I mean, a very classic example is Jason Fried and DHH, who have been doing Basecamp or 37signals for the last many years. They’ve always been very famous in Denmark, of course—DHH is Danish. I love their books. I think they’re a great bootstrapped road model.


But you’re also starting to see more indie founders doing this. It was becoming more and more popular in the building public community. More and more people were doing bootstrap startups with success. That intrigued me. I think, as a second-time founder, you definitely have an advantage to be able to do it much easier than first-time founders.

Dave: Yeah. One of the themes that we are exploring in the Bootstrapped Legends series is the idea of departing from conventional wisdom. If you haven’t taken outside money, if you have full control of your business, you can essentially deviate from traditional rules of thumb and conventional wisdom to oftentimes really incredible effect. As you think about Userflow and defying conventional wisdom, what role has that played? What are some of the big bets you’ve made as a bootstrapped company that you probably wouldn’t have as a venture-backed company?

Esben: I mean, a big bet is that we’re only three people, right? [Laughs] We haven’t hired anybody. You could argue when we reached $1 million and had money in the account to be able to hire, should we have hired somebody? We’ve done that a couple of times now, sat down and asked, “Do we need to hire more people?” We even had interviews and stuff like that. We always come to the conclusion that it’s not going to add a 10X effect to add this person, and it’s going to add more work on our end to manage the team. Is there really any benefit to it? So far the conclusion has been that there isn’t.

That’s been probably the biggest bet, that we keep being three people and are not adding additional people to the team. It makes us much more nimble and agile. We can make decisions much more quickly on features. There aren’t a lot of discussions. Everything just becomes a lot easier when you have fewer people. It hasn’t been a workload problem either—you could say that’s also a bet we took. Is this going to become a workload problem? Actually, it’s been the opposite. We have a lot less workload because we have a smaller team.

Dave: Three people—obviously that is quite different. Let’s spend a little time there. Maybe start with, how does that work? How do you build this great business, with $4 million ARR and a great product, with three people? How do you divide the work?

Esben: Sebastian owns the product and development. He builds the product. He’s a really 100X developer, super good at that. He has one designer, who is the third person on our team, Jonas, who basically supports him in building the product so he can move faster. [Jonas] only has to think about every single design decision. And my role is primarily responsible for support (though Sebastian also does support), and handling the growth, marketing, basically all of our processes around the product—getting people to buy it. That’s how we divide the work, but everybody is very involved in the product. It’s a very product-focused team in many ways.

Dave: In most software companies, there are literally tens of not hundreds of people working on each one of the spans that you described one person driving. How does that get done? What’s the magic?

Esben: I think a lot of automation, first of all. The first thing I did when I came into the company was automate a lot of the processes based on my learnings from Cobalt. I knew where you could automate emails, a lot of different things. Knowing where to invest and not to invest. In your first startup you do a lot of grinding and wasted effort, but I knew which areas were the most important to invest in, from a growth perspective.

We always have this mindset of solving it in the product instead of solving it with people. Let’s say we have a recurring support issue. We always look at how we can solve that in the product—how we can make the feature better so users intuitively understand it, instead of having to ask a support question. That way, we don’t have to hire more support people. We actually solve the root cause, and we won’t get the question again. That’s just one example of how we’re thinking about effective work and automation.

Dave: I’m sure people in the audience are still thinking, how can they possibly get this done? You’ve laid out the case. Maybe push it one step further. What are the unexpected benefits of only having three people, versus a traditional org structure? Why is this just the dominant strategy for you?

Esben: I think the number one thing is really that we are very close to our customers. That goes not only for me, who is of course on the growth side, but also Sebastian and Jonas. They’re also involved in support and can see the challenges that the customers come with. 

I think what happens in many large organizations is the product and development team, especially, venture far away from the customers. In a B2B business, if you don’t know your customers, you don’t know what to build. What you typically see in larger B2B orgs or SaaS orgs is that the customer success team knows everything about the customer, and the product team and developer are far away from the customer and have to do a meeting once in a while to understand them. Very few organizations have a good process for doing that. 

I think you build a much better product if you have the same intricate understanding of your customers as a customer success manager does, but also have the product and development mindset to be able to build a solution that fixes that problem. That’s a big power of being a small team, that product and development are very close to the customers.

Dave: That’s incredible. As you think about this mentality from an org standpoint, and you contrast it to Cobalt or a VC path, it’s a pretty different mindset. How else has the bootstrap mindset been different for you at Userflow versus the venture-backed experience at Cobalt? 

Esben: I mean, I think the last year has taught a lot of people that… It’s been an interesting year, right? It’s always been like this, and I think it was the same when we started Cobalt. Your first goal was to raise capital. Which is a stupid goal, because that’s not what builds a business. What builds a business is to get customers who pay for your product and grow in customer count and revenue. I see this mistake being made by many early-stage companies. They’re too focused on that VC round, so they forget what it’s all about. They use the VC rounds as a validation of their business. “We can’t raise money, so that must mean our business is not good.” Well, if you get 100 customers, you still have an amazing business.

I think that’s a big part of what I’ve learned over the years. VC money is just a support to your journey. It shouldn’t be your goal for your journey. That’s probably the most important change in mindset I’ve had. Now I always think profit first: how we can get more customers, how we can bring more value to the customers so that they will pay more, these kinds of things.

Dave: Do you think the journey has been significantly different? Have the joys been different, the challenges been different, between the two paths?

Esben: It’s hard to say, because they have been very different journeys. I would say the great thing about Cobalt was that we were building a team, which is always fun. You get to meet a lot of amazing people, you grow your team, and you get a lot of great colleagues. I think that was amazing and something you typically do on a VC journey, because you hire a lot of people.

On this journey, I have only two colleagues, so it’s not a lot of parties and stuff like that. [Laughs] But we still like each other. When we get together we have a lot of fun, but it’s a different journey. We’re a small team. I’m at a stage in my life where I have a family, so for me it’s great. It’s much more relaxing to have a small team, not having to do meetings all the time. I would say each journey has had its own joys, but definitely I’m enjoying the more quiet journey here, where we’re not having to build a big organization.

Dave: It does seem like the mindset is quite different, which is not surprising. It seems like the role models are different. It sounds like you took a lot of inspiration from what they built at 37signals and Basecamp. Were there other folks that were formative in the tough parts of your journey?

Esben: Yeah, I often look at different companies. There have been a lot of books written around profit-first and bootstrapping. Andrew Gazdecki is doing a lot of stuff in the bootstrap world. I like him. Also Aha is a great bootstrap story—you should definitely get them on your show, if you can. They basically bootstrapped to $100 million ARR, which is an amazing journey. 

There have been a lot of great examples, but unfortunately, not enough. I think the VC companies get way too much attention. I mean, let’s take a company like Clubhouse. A VC-backed company, and now it’s dead. Nobody uses Clubhouse anymore.

The world likes to look at money. And these big million-dollar, billion-dollar amounts. But that’s not always the best way to build a business.

Dave: Even in our language as investors, our internal description is that it’s the company. It’s the product and the customers. We don’t care who the shareholders are. We don’t care if they’re fancy, we don’t care if there haven’t been outside investors. A great business is a great business. I 100% agree with that.

You have full control of the business as founders, and it’s a very profitable business. You can manage it, integrate it with your life. I guess, if you think about over the long time horizon—and I asked Jason the same question—what’s your ambition for Userflow? When you hit that ambition, what happens then? Do you set another goal? Do you step away? What’s the longer-term perspective on this?

Esben: It’s a good question. Your look at that might change over time. What’s the fit for you in your life right now? Right now, it’s about having fun with building the product and earning good money while doing it. You often hear these VC-backed companies that say, “I’m in it for the mission and vision,” because they’ve been taught to say that, right? But money always matters. If we get a good salary and personally can be financially well off, we would be lying if that wasn’t an important factor in our lives. 

I think I’m in a good spot now, when it comes to that, and right now I can enjoy the flexibility and freedom to build a great business, a great product, and a fun product, that we can continuously build new stuff on. Userflow is a great platform that you can always add new in-app functionality. It’s the kind of platform that’s hard to stop building, actually, which is great. I’m enjoying that. 

As an end goal, I think we can continue with that and increase our ARR and have that flexibility. Of course, an acquisition could also be a possibility in the future, but it becomes harder and harder to say yes to such offers because, if you earn a lot of money in the business, they really have to come with a good offer for us to accept that. Right now we have freedom, we earn money, and we are building a fun product. There’s a lot to lose.

Dave: I love the idea of just enjoying the moment, enjoying the craft of what you’re building. I guess maybe to ask the question slightly differently: 10 years from now, is there something that you want to look back on? Is there a sense of legacy? It may just be the legacy of what you’ve built for your family and your coworkers.

Esben: I’m already proud of what we did with Cobalt, where we created a lot of jobs for 200-plus employees. That’s been amazing. We also built a great product that helps many businesses stay secure. Now, with Userflow, we’re helping many businesses get more customers for their products, and basically onboard people better onto their software. I’m very proud of these two products and what we’ve achieved with them. I think that was what I was looking for.

I used to be at Accenture as a consultant. At Accenture we were building these big SAP implementations for one big enterprise customer. You were kind of “helping” one big customer with some problems. I wanted to do something that had a bigger impact, that would be used by more customers, help more businesses. Cobalt and Userflow do that, which has been amazing. That’s definitely also been something I’m very proud of, the impact we’ve had on many businesses being more secure and more effective.

Dave: Absolutely. Esben, any final words to encourage other people that are on a journey similar to yours?

Esben: This is what I tell new founders: Don’t start out by focusing on fundraising. Focus on identifying your customer and getting some customers, and get customer feedback. Even if you are planning to go a fundraising route, it’s a lot easier to raise money if you have customers that like your product and you’ve done the early validation. No matter what, focus on getting customers and bringing value to them.

Dave: Absolutely. Thank you so much for taking the time to share the Userflow story. We’re really excited to have you as part of Bootstrapped Legends.

Esben: My pleasure. Thanks for having me. 


Dave Yuan

Founder and Partner, Tidemark

September 2023

The information presented in this post is for illustrative purposes only and is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by Tidemark or any of the securities of any company discussed. Tidemark portfolio companies identified above are not necessarily representative of all Tidemark investments, and no assumption should be made that the investments identified were or will be profitable. For additional important disclaimers regarding this post, please see “ Purpose of the Site; Not Investment Advice; No Recommendations” and “Regulatory Disclosures” in the Terms of Use for Tidemark’s website, available at Terms of Use (tidemarkcap.com).

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