🎥 Loom's Growth Strategies

From being 2-weeks away from bankruptcy to a $975M exit.

SaaS Strategists,

A couple of months ago I released Notion’s Growth Strategies which you all loved.

Today I want to continue the trend and showcase how Loom achieved such great success.

I always choose stories to tell that at least have 1 or 2 nuggets of information that aren’t seen in other launches or products,

So I think you’re going to love this one.

Here’s how Loom built its software and became one of the leaders in the industry just by switching its messaging:

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Loom’s Growth Strategies

Reading time: 5 minutes

As with any successful SaaS product, Loom’s success didn’t happen overnight.

There were a lot of ups and downs they needed to bypass in order to become who they are today.

Let’s start from the beginning of a completely different product, as that’s how it usually goes.

Early Days of Opentest

Before Loom, Vinay Hiremath and Shahed Khan, two college friends embarked on a journey to create a company that will help its users collect video-recorded user feedback directly on their website.

Initially, Loom was called Opentest, and the team started to build.

Initial version of Loom (Opentest)

8 months into development, after various failed launches and fundraising attempts, they decided to give up.

But not without one last try.

They decided to pivot.

The team noticed that video was highly underutilized in work environments, so they decided to create a screen recording software that will help teams communicate faster.

Thus, the idea for Loom was created.

Chrome Extension & Product Hunt Launch

The first version of Loom was a simple Chrome extension that allows you to record your screen.

The goal was to make it as simple as possible to start recording your face, screen, and voice.

First version of Loom’s Chrome Extension.

After heavy investment into Opentest, the team was on the edge of bankruptcy and had one last chance to pick up traction.

That was the Product Hunt launch.

They knew that they needed to create a seamless experience in order to stand out.

The goal is to build a 2-click screen recorder directly embedded into Chrome.

Loom’s Product Hunt Launch.

The public loved it, and they got back up on their feet!

Messaging Switch & The Breakthrough

After the initial Product Hunt hype was over, the team now needed to find a way to grow more steadily.

They knew that if they positioned themselves as just another screen recording tool, the product wouldn’t make a breakthrough due to heavy competition in the space.

So they decided to brand themselves as “asynchronous video messaging for work.”

If there’s one strategy I would separate from Loom’s growth toolkit it would be this one:

Simply changing the way they communicated while essentially having the same product as everyone else, made all of the difference.

  • Website copy

  • Branding

  • Communication strategy

All of this was channeled towards teams working together so they could replace meetings with screen recordings.

Here’s how Harry from Marketing Examples explains it:

Harry’s explanation of Loom.

Loom was the first one in this space to utilize a messaging strategy in their website and ad copy in order to position themself differently on the market.

Part of the strategy also includes emails indicating how many hours you saved on online meetings.

Consistent tracking and ROI showcase is the core of growing a software tool like Loom.

Loom’s ROI showcase.

This just shows that you can have a very similar product to your competitors, and no matter how the space is saturated, you can always stand out with your messaging by highlighting the intention of the software use.

The “Magic” And The “Habit” Moment

Vinay says that the core strategy of converting a “tester” into a paid customer happens in two steps.

The “magic” and the “habit” moment.

The first ‘aha’ moment is the magic moment.

It’s when a user realizes “Wow this thing is fast - I’ve never been able to create a video this quickly.”

Scaling and optimizing this magic moment over time has required that this experience is possible across millions of devices, thousands of varying internet capabilities, and from every country in the world.

And it’s been a massive technical journey as Vinay recalls.

Loom’s growth and additional features.

The journey to achieve the magic moment is simple.

Have a UI that can’t be more straightforward.

Choose your:

  • Screen

  • Mic

  • Option to record your face

Start recording.

Boom, as simple as that.

Contrary to other popular software in this space that requires high customization from the start, Loom handles everything for you and the focus is actually to record videos as fast as possible.

The habit moment is when a user starts to understand that sending a Loom is something they should probably be doing every day for many different reasons.

“They start to realize a Loom is a format that has many use cases just as long-form writing, presentations, or spreadsheets” Vinay explains.

“We do a lot to ensure this habit moment is met over time. We put use cases in front of users based on personal information. We make sure we’re available on every platform. Our customers work on (Mac, Chrome, iOS, Android, SDK). We encourage groups of users to start using the product together, firstly through the inherent viral loop built into sending a Loom and secondly through referral, invite, and workspace consolidation flows.”

Vinay Hiremath, Loom Co-founder

Hook → Convert → Retain.

The classic formula.

Current State of Loom

A lot of Loom’s growth can be attributed to its focus on hiring the right video engineers, as opposed to just generalist software engineers.

Early on the team struggled to hire specialists as this was their biggest bottleneck.

But after all, they did make the right choice to engage in hiring highly specialized software engineers.

And did reap the rewards.

Loom followed pretty much a standard SaaS growth formula:

  1. Create a simpler version of a popular software

  2. Execute the Product Hunt launch well

  3. Listen to what your users want

  4. Continue to scale

But as I already mentioned, they had a twist in their positioning.

Their brand messaging paired with the magic and the habit moment, brought Loom to the status they have today.

Loom’s acquisition.

In 2023, Loom sold for $975M to Atlassian in one of the largest startup exits of 2023. Despite selling for less than their Series C valuation, employees at Loom made far more than they would have made at FAANG or most startups.

Which is always a great sight to see.

The journey from being just 2-weeks away from bankruptcy to landing a close to $1B exit is simply put - wild.

Did you enjoy reading about Loom’s growth trajectory?

What SaaS product would you like me to break down next?

Feel free to reply to this email!

I’ll see you in the next one.

Ognjen Gatalo

Chief SaaS Strategist ☁️ 

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