Establishing a successful SaaS company in today’s competitive market is ambitious, yet the journey of Chili Piper demonstrates a resilient and strategic approach toward dramatic growth. It began with a simple idea in 2016, and in a short span of time, it has morphed into a company with a dazzling $30 million ARR. How exactly did Chili Piper CEO Nicholas Vandenberg guide the company through a revenue roller coaster, from $16 million to $30 million in just two years, especially amidst a major layoff? In this GetLatka piece, we unveil the key maneuvers that helped Chili Piper expand its ARR and maintain an upward trajectory.
- A team of 145 with 37 engineers
- Launched in 2016, and hit $2m ARR in 2018
- Broke $15m ARR in 2021
- $30m ARR in 2023
- $1,200 ARPU
Navigating Growth and Market Changes
Chili Piper’s ascent was not without its perils. Despite breaking the $2 million revenue mark in 2018 and boasting a multi-product approach, which propelled their revenue past $15 million in 2021, they encountered market compression.
Against a background of global market slowdown in 2020, Nicholas was faced with one of the toughest decisions in his choosing to significantly reduce his workforce. The context to that decision was particularly poignant as it followed hard on the heels of a lavish team retreat in Morocco, something that was not without criticism for its perceived extravagance. However, Nicholas explained that it had happened for so long in an annual retreat and was part of the company’s tradition rather than a careless expenditure. Despite all these, the company’s ARR grew impressively from $16 million in 2021 to $30 million almost doubling them amid these trying moments.
This was a growth that was achieved without raising additional capital, a testimony to the strategic pivot made by the firm into profitability. The layoffs though difficult were a one-time decisive move – reducing the workforce from 225 to 150 – aimed at stabilizing the company. Nicholas stressed the careful attention that was taken in supporting those let go, including personal recommendations and help by placement into new jobs. This painful transition period was mostly key to making sure that the company would survive into a stable, cash-positive future. The ability of the company to bounce back and adapt courageously through hard times has strengthened its financial standing and remarkable reputation in the industry, visible by the high demand for former employees referred to as ‘Pipers.’
Product Evolution: From Scheduling to Self-Serve
The company targeted SDRs with a scheduling tool designed for booking appointments with key executives, featuring advanced functions like round-robin routing and one-click scheduling. This tool uniquely catered to the needs of SDRs, who typically book appointments directly, rather than using a conventional scheduling link.
Since its modest beginning and a $3 million funding round in 2019, the company has significantly expanded its product range. The CEO mentioned the launch of a consequential product that addresses the loss of prospects on thank-you pages post-form submission. This innovative tool qualifies leads in real-time. Additionally, they introduced an automated lead distribution system for participants in webinars and other events who do not immediately request a meeting.
In an exciting development, the company is set to launch a new chat product, completing its suite of tools designed to transform interest into actionable sales pipelines. This includes a revamped version of their scheduling product, which now incorporates AI to enhance its utility. The CEO expressed particular enthusiasm for this upcoming product, hinting at its potential to be the ‘ChatGPT’ of their brand, signaling a groundbreaking advancement in their technology. These developments underscore the company’s commitment to providing a full range of tools necessary for engaging prospects effectively, whether through email, on websites, or other digital platforms.
Driving Growth Through Strategic Partnerships and SEO
Chili Piper, with a roster of 2,000 customers and a clear mid-market presence, credits its growth to a balanced mix of inbound channels, a dedicated outbound SDR team, and strategic integrations with top-tier platforms like Intercom and G2. These integrations provide not only frictionless user experiences but also are a source of organic growth to bring new customers into the Chili Piper ecosystem.
Nicholas points out that it’s not just their robust SEO strategy that wins customers but the viral nature of their offerings. The compelling experiences themselves, which often get produced by their products lead their users to often just discover and adopt Chili Piper on their own.
Maintaining Momentum Amid Valuation Fluctuations
The journey wasn’t without its hurdles. Following a surge in valuation which peaked at a $625 million post-money valuation in November 2021, the company, like many others, witnessed a correction in market valuations. However, they managed morale by repricing stock options and maintaining transparency with their team. They’ve managed to stay ahead through a mix of inbound and outbound marketing strategies. Currently, about 20 SDRs are responsible for securing new customers, complementing their inbound SEO and virality-driven growth.
Looking to the Future
As the company gears up for the launch of its self-serve option, Nicholas is clear-eyed about the strategic significance of serving the lower end of the market first. He believes in building a strong foundation that can scale upwards effectively over time, reminiscent of HubSpot’s growth trajectory.
Favorite Book: “Never Split the Difference,” which offers powerful insights into negotiations.
CEO he’s following: Dharmesh Shah of HubSpot who has demonstrated adept navigation from SMB focus to Enterprise dominance.
Favorite online tool: Google Docs, for its simplicity and power in enabling transparent decision-making processes.
Balance: Seven to eight hours of sleep to ensure longevity and productivity, a lifestyle choice supported by his partner, Alina Vandenberg.
What does he wish he had known at 20? The existence and accessibility of entrepreneurship — knowledge that would have empowered him to start his journey earlier.