20VC Webflow's Vlad Magdalin on The Journey To Breakeven and Raising A Monster $72m Series A, The Single Most Important Question To Ask When Determining Which Investor To Select & The Challenges of Founders Angel Investing

Abstract
Summary Notes

Abstract

In this episode of "20 Minutes VC," host Harry Stebbings interviews Vlad Magdalin, founder and CEO of Webflow, a no-code platform for building business websites. Magdalin shares his entrepreneurial journey, from the inception of Webflow in 2004 as an intern at a web design agency to its current success, having raised over $73 million in funding. He discusses the challenges of fundraising, the importance of company culture, and his approach to work-life balance as a parent. Additionally, the episode features discussions on customer experience automation with shoutouts to Activecampaign and Intercom, and highlights Ezra's full-body MRI scans for early cancer detection. Magdalin emphasizes the value of partnerships with investors that go beyond financial support, focusing on mutual respect and shared vision.

Summary Notes

Introduction to the Podcast

  • Harry Stebbings hosts the 20 Minutes VC and Founders Friday.
  • Harry is excited to feature Vlad Magdalin, the founder and CEO of Webflow.
  • Vlad Magdalin's Twitter handle is @callmevlad.
  • Webflow is a startup that enables building business websites without coding.
  • Vlad has raised over $73 million for Webflow from various investors.
  • Vlad's background includes working as a senior software engineer at Intuit and co-founding Chatterfox.
  • Acknowledgment to Ron at Rainfall, Excel, Eric Barne, Ben Ling, and Alex at Funders Club for question suggestions.

Welcome back to the 20 Minutes VC and founders Friday with me, Harry Stebbings at H Stebbings 1996 with two B's on Instagram. And I could not be more excited.

This quote introduces the podcast episode and the host, Harry Stebbings, expressing his excitement for the episode.

Webflow's Impact and Vlad's Background

  • Webflow is taking the world by storm.
  • Vlad's prior experience includes working at Intuit and co-founding Chatterfox.
  • Webflow has significant backing from notable investors.

A startup that is totally taking our world by storm.

This quote emphasizes the significant impact Webflow is having on the startup world.

  • Activecampaign is recognized for creating unique customer experiences with automation.
  • Intercom is praised for improving customer interaction and conversion on websites.
  • Ezra is mentioned for offering radiation-free full body MRI scans for cancer detection.

I want to start today with a big shout out to my friends over at Activecampaign.

This quote acknowledges the sponsors of the podcast and introduces Activecampaign's role in customer experience automation.

Vlad Magdalin's Introduction

  • Harry introduces Vlad Magdalin with enthusiasm.
  • Vlad expresses mutual respect for Harry.

It is my absolute pleasure to be here. I'm an equal fanboy of yourself, so I think we have some mutual respect here.

This quote captures the mutual admiration between Harry and Vlad at the beginning of their conversation.

The Origin of Webflow

  • Vlad's idea for Webflow originated in 2004 during an internship.
  • He was tasked with translating designs into a custom CMS at a web design agency.
  • The high invoice costs for this translation process sparked the idea for Webflow.
  • Vlad envisioned a tool that would enable creative teams to implement their designs directly.

The whole spark hit of like this creative team should have the tools to take their vision and put it into production so that it doesn't require this translation step.

Vlad's quote explains the initial inspiration for Webflow, highlighting the need for tools that empower creative teams to realize their visions without intermediaries.

Vlad's Journey and Challenges

  • Vlad faced several attempts and challenges in bringing Webflow to life.
  • His journey included writing a senior thesis, job at Intuit, and failed startups.
  • Issues with trademarks and co-founder motivation were significant obstacles.
  • A fortuitous trademark approval in 2012 reignited the Webflow project.
  • The emergence of powerful browsers and responsive design created a perfect storm for Webflow's development.

In 2012, randomly at my house in Sacramento, an envelope arrived with a trademark certificate from the US Trademark Office with apparently our application from 2007, five years before, somehow got in some queue.

Vlad's quote recounts a pivotal moment when an unexpected trademark approval revived the Webflow project, demonstrating how unanticipated events can significantly influence a startup's trajectory.

Perseverance and Advice to Founders

  • Vlad discusses the difficulty of persevering through failures and rejections.
  • He shares personal sacrifices made to keep pursuing the Webflow vision.
  • Vlad advises caution against making extreme sacrifices, acknowledging survivorship bias.
  • The driving force for Vlad was the belief in a better way of doing things and the potential impact on people's lives.

For me it was just blind optimism that this has to exist, that it will become a thing at some point.

This quote from Vlad captures the essence of his perseverance, driven by optimism and the conviction that his vision for Webflow was necessary and would eventually succeed.## Luck and Privilege in Success

  • Vlad acknowledges the role of luck and privilege in his success, which he feels are often overlooked.
  • He advises perseverance for those driven by passion but also recognizes the unequal playing field due to varying advantages.
  • Vlad finds it difficult to make blanket statements about what leads to success, given the unique circumstances of each individual.

"But I also just want to acknowledge how much kind of luck and privilege and all these intangible factors go into something that at the end of the day, looks like it's successful."

This quote highlights Vlad's awareness of the role external factors play in personal achievements and cautions against attributing success solely to hard work.

Parenting and Its Impact on Business Operations

  • Vlad has two daughters with distinct personalities, leading him to spend individual time with each, catering to their interests.
  • He integrates his work with parenting, using Webflow to help one daughter with a project.
  • Parenting changed Vlad's approach to operating his startup, emphasizing prioritization and the importance of family over business success.
  • It led to a company culture focused on long-term sustainability and work-life balance.

"It changed everything, honestly. Like going into starting the startup with kids, it forces you to think about prioritizing."

This quote reflects how becoming a parent influenced Vlad's perspective on work and life, leading to a more balanced approach to running his company.

Fundraising Journey and Seed Round Experience

  • Vlad describes the seed fundraising process as highly stressful, with mixed responses from VCs.
  • He felt pressure to conform to trends and adjust Webflow's positioning to appeal to investors.
  • Early advice suggested not discussing family life to appear fully committed to the startup.
  • A mindset shift, prompted by Paul Graham's advice, led to closing their seed round more effectively.

"So for me, it was like, I just remember waking up with panic attacks. That's the first time I learned what panic attacks were."

Vlad candidly shares the intense stress he experienced during fundraising, which was a significant learning period in his entrepreneurial journey.

Building Towards Profitability

  • Initially, Webflow followed the common startup approach of preparing for the next funding round.
  • Lack of expected growth forced a reevaluation towards achieving profitability as a means of survival.
  • This shift was more about practicality and ensuring the company's longevity rather than an intentional strategy to build a profitable business.

"That forced us to think like, wow, we're default dead if we keep doing what we're doing, if we're not going to be able to raise something else."

Vlad explains the realization that led to a strategic pivot towards profitability, which was driven by necessity rather than preference.## Fundraising Timing

  • Vlad Magdalin did not actively choose a time to start fundraising.
  • The company's profitability and public discussions attracted investors.
  • Investors were drawn by the company's momentum and community engagement.
  • Vlad and his team were skeptical about how VC funding might alter their values-driven organization.

We never actually started a process. We were always skeptical around, if we were to raise, what would we use the money for? And really, honestly, the biggest concern for us was does partnering with a vc fundamentally change sort of a values driven and a mission driven and a purpose driven organization?

The quote explains that Vlad's team did not initiate the fundraising process and had concerns about how VC involvement could potentially impact the company's core values and mission.

Qualities of a Great Investor Meeting

  • Vlad values the personal connection and partnership over tactics and value-adds from VCs.
  • A great investor meeting leaves the founder feeling energized and looking forward to further interactions.
  • True partnership is compared to a co-founder relationship or friendship, based on mutual care and shared vision.
  • Vlad's positive experience with Arun from Excel stood out due to its personal and non-transactional nature.

Honestly, for me, it has nothing to do with tactics. It has nothing to do with quote unquote value add. What can a VC firm bring or whatever. It's honestly, and this is going to sound really foofy, but it's how do you make me feel?

Vlad emphasizes that the personal connection and how the investor makes the founder feel are more important than the strategic benefits or resources the investor can provide.

VC Value Add and Misconceptions

  • VCs have added practical value, especially in hiring and making introductions.
  • Emotional support from investors is highly valued and impactful.
  • Investors who show genuine care for the founder's well-being and the company's mission are preferred.
  • Vlad values investors who focus on long-term success and personal fulfillment over short-term metrics.

I think a great investor is a similar type of mindset. If they truly care about the founders and the mission of the company, they're going to approach it, not from are you meeting your numbers, of course, that stuff is important for accountability and to make sure the mission succeeds. But they're coming at it from like, I truly first and foremost care about you as a person and the people that are at webflow in this example and about the mission of the company.

Vlad stresses that the best investors prioritize the founder's personal well-being and the company's mission over strictly financial metrics, fostering a supportive and caring relationship.

Role of Terms in Investment Decisions

  • Vlad had the leverage to negotiate founder-friendly terms.
  • The focus is on partnership rather than legal control.
  • Decision-making by consensus is ideal over legal voting control.
  • Founders sometimes over-prioritize control, which can hinder growth.

None of that should come down to exactly how is voting control structured, et cetera. But I definitely understand when founders try to optimize for that stuff. I just think sometimes they over optimize for that stuff and wait way too long and not find this partner that can really amplify your trajectory and your ability to hire really amazing talent and all that stuff.

Vlad suggests that founders should not overly focus on retaining control through legal terms, as true partnership with investors can be more beneficial for the company's growth and success.## Role of a Great Board Member

  • Board members should prioritize the company's mission and support its success.
  • They must focus on how to help the company and its departments be more successful.
  • The servant leadership model is preferred over seeking immediate returns or growth.
  • Psychological safety is crucial for board effectiveness.
  • Board members should actively contribute to the company, not just give directives.

So I expect every board member, everybody who's in that board meeting, to come with the perspective of how do I make this company's mission succeed faster?

This quote emphasizes the expectation that board members should be dedicated to advancing the company's mission.

That is the pinnacle of being a very effective board member in terms of that psychological safety piece.

The quote highlights the importance of board members creating a safe environment for open discussion and support.

I think it's equally important to keep reminding founders... to treat every board member as somebody who equally has responsibilities to do things for the business.

This quote suggests that founders should view board members as active contributors to the business, not just overseers.

Servant Leadership Model

  • "Leaders Eat Last" is a recommended book that exemplifies servant leadership.
  • Servant leadership leads to high-performing teams and better outcomes.
  • Empowering team members and respecting their humanity is key.
  • Command and control leadership is less effective than supportive leadership.

Leaders eat last. Why is the pinnacle of a servant leadership?

This quote references the book "Leaders Eat Last" as a fundamental resource for understanding servant leadership.

When you have this mindset of, how can I, as a leader, make your life easier and make you empower you more, versus this more traditional command and control.

This quote contrasts servant leadership with traditional command-and-control leadership, favoring the former for its positive impact on team performance and morale.

Innovation and Perfection

  • Striving for perfection can hinder innovation.
  • Delivering value quickly and iterating is more important than achieving perfection.
  • Shipping products and improving them incrementally is advised.

Perfection is the death of innovation.

This quote underscores the idea that seeking perfection can be detrimental to the innovative process.

Decentralizing Silicon Valley

  • Silicon Valley should be decentralized to alleviate local issues and make tech more sustainable.
  • The tech ecosystem should become a global phenomenon.
  • Collaboration tools like Zoom and Slack facilitate worldwide collaboration.

Well, I would decentralize the valley first and foremost because I think tech has saturated so much in Silicon Valley that makes it completely unaffordable to live here.

This quote expresses the need to distribute the tech industry more broadly, beyond Silicon Valley, due to local saturation and affordability issues.

Founder's Role in Angel Investing

  • Founders angel investing can distract and create a divide within the team.
  • Focus should remain on the current company to increase its value and show commitment.

I think it personally removes focus. It introduces another thing to worry about.

This quote reflects the belief that founders engaging in angel investing may lose focus on their primary venture.

Vision for Webflow and the Next Five Years

  • Webflow aims to expand from a visual website building tool to a platform for broader software creation.
  • The goal is to enable more people to create software without needing to code.
  • Webflow aspires to empower the realization of many new ideas and businesses.

So Webflow started as a visual website building tool... the next five years are all about expanding that into broader software use cases.

This quote outlines Webflow's vision for the next five years, aiming to transition from website building to a more comprehensive software development platform.

What others are sharing

Go To Library

Want to Deciphr in private?
- It's completely free

Deciphr Now
Footer background
Crossed lines icon
Deciphr.Ai
Crossed lines icon
Deciphr.Ai
Crossed lines icon
Deciphr.Ai
Crossed lines icon
Deciphr.Ai
Crossed lines icon
Deciphr.Ai
Crossed lines icon
Deciphr.Ai
Crossed lines icon
Deciphr.Ai

© 2024 Deciphr

Terms and ConditionsPrivacy Policy