Discover HeyGen's journey to $1M ARR with product demonstration videos and video presentations. Explore our strategy and insights.
Launching HeyGen: A Journey to $1M ARR
⏱ We launched on 29th July 2022. It took us 178 days to get to $1M ARR, and 217 days to reach the ramen-profitable state.
🌎 We have grown to ~30 people now distributed across 3 continents, 4 countries, and 6 cities.
Here's a look at our numbers. Of course, we are not the fastest, but we hope this serves as an example of the future and growth possibilities in interactive video marketing.
It was a fantastic journey looking back. Wayne and I come from a consumer product background (Snapchat + Smule). We didn't have much experience with SaaS 12 months ago. But we realized that this was a necessary path to pursue our vision of making impactful product demo examples. We've learned a lot by just reading + talking to different people with prior experience. I am so grateful that many people have helped us, and I would like to give back to the community, especially to founders in the AI space, by sharing the story of how we hit $1M ARR.
I will share how we found our first paying customer, validated the PMF, zoomed into our product development journey, built products, worked with customers, and, lastly, how we learned.
Achieving AI-Market Fit
Building AI models and hacking are my strengths, yet they mean little without product-market fit (PMF). This aspect is critical, especially in today's AI boom with video presentation technology. We also applied a new concept of AI-market fit, particularly with video demonstration technologies. Understanding the significance of product-market fit in startups is essential for growth.
In technology's fast-paced world, distinguishing demo from user value is tough. Some demos catch your eye, but user value has longevity. We started our company in December 2020, confident that AI could generate quality content like memorable product demonstration videos. Our mission was to transform visual storytelling by shifting from camera-based to AI-generated content.
To realize this vision, we divided it into three steps. First, creating a video engine for businesses to facilitate talking head video examples for corporate communications. Then, developing a SaaS product to push technology limits, connect with users, and generate revenue for sustained investment.
After exploring technical feasibility and use cases, we targeted the spokesperson scenario. Searching "spokesperson" on Fiverr revealed 1,811 services, indicating demand for innovative video presentation experiences.
Almost a year ago, we launched a Fiverr gig offering on-demand, multi-language video footage. Initially, we didn't disclose our AI avatars but offered similar services at a lower cost. Our competitive prices and fast delivery led to our first paid customer for $5. Later, we updated our gig to reveal our AI avatars, and feedback was positive. We gained more clients, understanding use cases and pricing.
This approach validated our AI-market fit cost-effectively, earning our first customer. These early users evolved into product clients, providing vital feedback for our initial version. Platforms like Fiverr or Upwork can reflect demand-supply dynamics in translation, SEO, image creation, video localisation, and more.
Lessons Learned
- Connect with the right person early, even pre-product. Quickly craft a minimum viable product (MVP) for potential buyers. No payment means no validation.
- After meeting real users, fully listen. It's challenging to accept you may not know what they want. Practice humility. The CG avatar, for instance, lacked product-market fit. Users wanted authentic corporate video examples. Listening better would've kept us on track.
- Don't blindly believe in popular tech trends. They don't always align with genuine user needs. Diversification in your content offering, such as learning to translate your audio content with AI, can be crucial.
- Prioritize the right problems. Validating a need is more important than solving perceived "big" issues.
Product Journey
Launch on Jul 29th
Development began in Q2 2022. On July 29th, 2022, we launched HeyGen, claiming top spots on Product Hunt with creative product demonstration video examples. See our Step-by-Step Guide to Your SaaS Product Launch Video.
Inventing TalkingPhoto
Customers asked about using photos for avatars. While initially "no," this revealed the need for low-cost spokesperson videos and quick feature testing pre-complete footage. Hence, TalkingPhoto emerged, embraced during beta as it promoted product-led growth (PLG). TalkingPhotos are creative and fun, boosting social sharing and offering new dimensions to create video ads.
Boosting Traffic: Freemium & Watermark
We applied our consumer product growth expertise to B2B with freemiums. Not content with standard referrals, we added a notable watermark in videos, key to bootstrapping viral video marketing. Though unusual, the watermark fueled sharing, yielding a skyrocketing viral coefficient crucial for viral success. Understanding how viral marketing impacts business growth can be a game-changer.
Traffic surged with freemium, augmenting social media buzz. Our system occasionally crashed from massive views. This was indicative of genuine product-market fit and viral success.
Amplifying Viral Engine: Featuring in Gen AI Maps
Our traction grew, garnering Generative AI map features. Sequoia Capital mentioned us first on October 24th. From there, mentions increased, amplifying our user acquisition with interactive video examples.
Improving User Experience
Initially, many customers didn't activate due to unfamiliarity with interactive video marketing. From November to January, we focused heavily on onboarding. Realizing the "aha" moment came from viewers seeing their AI-generated video, we built pages bypassing account registration, embedded onboarding videos, and over 200 templates to streamline their process, boosting conversions and gathering favorable G2 reviews. Check out our Best Video Templates for Ads That Convert.
Building the Product
Our startup product approach focused on quick releases—a weekly schedule despite the standard bi-weekly industry pace. This accelerated $1M ARR by prioritizing key improvements over peripheral fixes.
We finalize designs weekly, prioritizing fixes by Fridays after Thursday releases. This cycle propels rapid iteration of effective talking head video examples, guided by our AI video script generator.
Breaking things isn't a setback but an indicator of hitting PMF—a stimulating approach during early AI-Market-Fit. Our MySQL approach emphasizes real PMF moments over premature optimization.
Distributed Teamwork
Initially skeptical of remote productivity, I soon noted team interaction bottlenecks depended on dependencies. Solutions involved embracing async communication tools, time zone overlap meetings, and a flexible team, boosting productivity. Learn more about benefits and challenges of remote team management to leverage the best practices. By choosing to integrate interactive video solutions, communication becomes even more effective.
Data Dashboards
Using Metabase, we crafted dashboards early for data insights, ensuring valuable metrics from the start on our interactive video examples.
A/B Testing Caution
Early startups lack data for A/B testing's statistical efficacy. Shipping fast offers better insight.
Tools
Third-party tools accelerated project progress, e.g., Datadog, Azure Synapse, Zapier, Typeform, and more.
Customer Interaction
A great product requires strong user momentum. By chatting with customers and embracing feedback, we grew alongside them. Even proposing customizations were gauged based on wider user benefit.
Fostering Transparency
"HeyGen Loves" and "HeyGen Hates" capture customer feedback. Transparency keeps issues addressed.
Prioritizing Customer Success
Each day involves checking activity (our key retention measure) in Airtable, aiming for green (positive) indicators. Staying simple prioritizes user value creation in product demos.
Reaching 1,000 customers brought scaling considerations.
Learning in SaaS
Learning how to build a SaaS product carried unique challenges. Confidence in adaptability and humility carried immense learning potential, guided by podcasts, newsletters, and competitor products focusing on how to make video presentations.
Beyond $1M ARR
As of April 26th, HeyGen achieved profitability, just two months past $1M ARR. New projects like HeyGen 2.0 push our vision while expanding our GTM team to drive further expansion.
Sharing our story might aid others on their journey. Building startups is challenging yet rewarding, fostering support for HeyGen.
Start your own journey with HeyGen and explore video localisation possibilities. Sign up for free today at HeyGen.
Nick Warner is Head of Creator Growth at HeyGen, where he helps creators and brands scale their content with AI video tools. He writes about AI, video technology, and how creators can use these tools to tell better stories and reach wider audiences.
