Webflow's Near Death Experience

Today Webflow is valued at 2 billion, profitable, and is a leader of the No Code movement.

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Vlad's Webflow Journey: https://twitter.com/callmevlad/status/1095333269946621958

Audio source: https://saastr.libsyn.com/saastr-438-webflow-ceo-vlad-magdalin-on-building-an-enduring-company-one-hard-lesson-at-a-time

swyx: [00:00:00] Vlad Magdalin started Webflow and his story , starting it several times over 16 years is when it's super inspiring and also just jaw dropping. He told a little bit of it in the SaaStr podcast, and I encourage you to listen to the whole story, but here's a clip where it really got to the wire. 

Vlad Magdalin: [00:00:16] I sold all the stock that I could, that I had at Intuit had basically my entire life savings, which total about 20 grand with the stock sales and poured it all into the company and got my wife on board. Got her convinced that, we were going to raise a ton of funding and a couple months, and it was off to the races.

My brother Sergey moved into our tiny little condo where we had our kids' room that we cleaned out that he crashed on the floor. We somehow had this kind of perception that we had to do all of this stuff to run a startup. Like we spent half a day in a park taking professional headshots, even though we didn't have a product, we didn't have a website.

We didn't have anybody who cared about like what we were building, but we just like somehow had this checkbook, like. List of things in our minds around like what real startups do. But in retrospect it was silly. And then we thought that, Hey, we have almost unlimited money.

That's what it felt like at the time we have 20 grand that's in this business account. And what do you do with that first by brand new Mac books, which is exactly what we did. And here's my wife, the voice of reason saying is that the. The best idea and me rationalizing.

Yeah. Like you need to have the best equipment to, to make the house, but don't worry. We're going to do this Kickstarter and we're going to raise 300 grand and everyone's going to love this product and it's going to buy into it. So, of course we pour in something like $12,000 into this Kickstarter video.

We have to rent like this massive flat that looks like modern. We record this entire video around the idea of what flow, the product we're going to build. And of course it's like a plea to the Kickstarter users from other videos that we've seen that were successful. So at this point, most of our money is gone.

We even had like this, the guy convinced us to do a little bit keyboard, cat impression that surgery almost. Made on the internet, but I'm glad we spared the world from that happening. And then reality started to hit at this point. We're almost out of money, but we still have all this optimism that we're going to post a Kickstarter.

It's going to go bonkers. We're going to get all this money and we're going to build the product, et cetera. And on that emotional high, we decided to apply to YC thinking that, Hey, we have this great idea. We have this Kickstarter video that we're about to put up. And in the matter of two days, we got both a rejection from my saying that, they're not open to interviewing us in that round.

And the Kickstarter telling us. Hey, actually, we don't support SAS software. It either has to be downloadable or it has to be something that you physically shipped to people. And of course our entire videos, like, Hey Kickstarter, Hey kicks like you can't just like ad-lib or Madlib Indiegogo in or something like that through post-production.

It was essentially a completely shot project that we had to throw away. So we went into like just deep work mode, two, we moved to this place called the hacker dojo, which is. Completely free, but also pretty, you had to fight for space and had to be there like super early in the day to get a table to work on.

And then. We're at the precipice of like nothing's working, we got rejected from ICU. This Kickstarter doesn't work. And right at the end of the year of 2012, my daughter gets really sick and with a life-threatening condition. And of course, when we started the company in September I had personally made the calculation of like, Hey families, healthy kids are young.

If something happens, like, all we really need is catastrophic health insurance. So our health insurance was of the variety where it's like a. 10 $15,000 deductible where just the tests alone to figure out what kind of surgery she'll need came to like $12,000 or whatever. And because it's close to the end of the year before the surgery actually happens, it rolls over to January 1st and the deductible resets and all of a sudden, like we're completely out of money.

I'm borrowing money on credit cards. Things are really tense at home. Thankfully, we're able to borrow enough to like pay for the surgery. And she's perfectly fine now. But things are getting so, so tense that we're just like scraping together money. We sold the family car that we had a little bit of equity and converted it to a really cheap lease and then surgery.

And I figured out. Just to survive on the company front. We found this restaurant called OODA Moss, where four for $8 and 30 cents. You could order one fajita plate that came with two sort of like fajitas, but enough raw materials to make two burritos. So that was our daily sustenance. We were just like go to this place once a day have those have an $8 and 30 cents.

Meals expense per day. And that was keeping us going. And the thing that really brought it home, like the one gift my wife gave me that Christmas. Cause that's how things felt at home was this placard, like this thing where this frame $20 bill that said in case of emergency break glass, and we were such a like hanging on by a thread where we started talking about.

Like Sergey, my brother, and moving back to San Diego, getting his job back. I was already talking to, into a colleagues to figure out if there's a place back for me at Intuit so that we can Moonlight on the side. So big, huge lesson there. Even though we didn't have that much cash, it felt like, we had enough that it didn't give us this sense of.

Frugality and sense of scarcity that we just in retrospect wasted it on these large projects, not really thinking carefully. So I would encourage every startup, like whatever cash you have, cash is King. Like it's something that gives you not just a lifeline but also the ability to To make core decisions on things that you truly need, and also read the freaking terms of service, cause that is something I still regret not doing to this day.