Software is eating the world. The development of sophisticated software is proliferating across all industries and the demand for highly usable and scalable developer tools ecosystem grows in order to match the fast pace of innovation. Over the past few years there’s been a surge in funding for emerging developer tools ecosystems and companies that provide a wealth of services such as API management, analytics platforms, automatic debugging, real time infrastructure and cloud-based logging.
Let’s start by describing in your words what your company is and what it does?
Pusher wants to help developers take over the world. We do so by creating a set of tools that would allow them to quickly and easily build interactive features in their applications, that update without having to refresh.
Using Websockets, we transfer data where it needs to get to on people’s browsers and mobile apps. We’re called Pusher because we push technology down to apps in realtime, rather than the normal way things work where they “pull” it when they refresh.
What do you think makes it distinct to any other companies – what’s its USP?
What our customers love about us is that we focus on the developer experience and make it really easy for them to get their product to market fast. We feel that we’ve worked hard to make our product delightful to use and we offer engaging user experiences that people want to stick around for.
We take away the complexity and time of building the infrastructure and also help with scaling it to a large number of customers. This way, developers use their precious time on the features that make their applications special.
What is your personal background? What inspired you to start the company?
I’ve always been curious and appreciated independence. So after university (where I studied English Literature, surprisingly!), I did not really want to work for anyone. Instead, I started building websites for small clients. This turned into the consultancy business that I co-founded with Damien Tanner in 2006.
We were lucky to be early adopters of the web development framework called Ruby on Rails went on to become incredibly dominant. We managed to get a lot of success off the back of this.
This knack (or luck) for riding technology waves seems to have characterised our growth. We did the same thing with a technology called WebSockets in 2010, which turned into Pusher. At that time, it was very difficult to implement them into applications. We created a product that would make it easier to use the technology. This made their applications more responsive and allowed them to receive live updates so that their customers didn’t need to keep refreshing.
The larger companies like Facebook and Google already had this kind of features in their apps, but we made it possible for a wider audience of developers to add this to their applications quickly and cheaply.
What is the story of the company from launch until now? How big is the company now?
Pusher originates from that software consultancy business that I co-founded in 2006. this happened in 2010 when we had several people available who weren’t working on client projects. Instead, we switched our focus to building products. We saw this as a way of having a bigger impact and doing something more exciting and scalable.
As it happened, our first products shared a similar problem of needing data to be synchronized between them. We solved this by using a new technology called WebSockets. The way we had approached this was so powerful, that it seemed to be a much better product than the two it had been designed to finish. This is how Pusher’s product was born, and in 2011 it became its own entity. We realised this was a problem we could solve for a lot of developers who were excited about WebSockets but did not know how to use this technology effectively.
As a separate company, we took $1M seed funding in early 2011 to establish ourselves, and to take the product further. We considered more funding in 2012, but ended up not going down that route.
We spent several years after that in what we now call our “survival epoch”. We were making money but not growing massively fast. At a certain point, we decided that this path probably led to stagnation. We shifted our ambitions, and in 2016 we took $2.5M of venture debt from Saas Capital to invest fuel that transition.
We are now focusing on innovation as a way of opening up new markets and creating company structures that support growth: we’ve scaled up our leadership team, hired more engineers, and we are focusing on creating products that developers need.
We have grown from a team of 10 to 55 and we now power over 150,000 developer customers across 170 countries. We work with giants like the ITV, Mailchimp and DraftKings, but we also help level the playing field, allowing smaller app developers to compete with bigger businesses: we are helping the new cool startups like FrontApp, Zeplin, GoGuardian become the next big thing.
What is the biggest challenge you’ve faced so far in your company?
Our biggest challenge is one that we’re still in the process of grappling with. We are trying to transition from a single product company to a multi-product one. Even though our product is widely used, we feel that we need to increase our pace of innovation to match an incredibly fast-moving tech industry.
Being reliant on a single product for all future revenue was identified as a significant existential threat. It also didn’t match our original positioning to be seen to be resting on our laurels. We founded our original success on being innovators, who had identified an exciting new trend. We need to continue to live up to this image in future.
This has involved re-imagining our engineering team. The whole company has had to rally around this goal. It’s still a work in progress, but it has been the cause of a lot of lessons learned.
What’s your biggest milestone/ which are you most proud of?
In 2013 we became profitable on a monthly basis after deciding to aim for organic growth. We only had a month or so of runway left, so I was incredibly satisfied and relieved that we managed it.
We’ve since decided that organic growth is not the right way to capture the opportunity that lies before us. This has led us to seek external investment, and get unprofitable again. However, it’s still a source of pride that we were able to operate profitably for a period.
We realised that being profitable isn’t everything and sometimes aiming for profitability leads to cost cutting and stops you from investing in the future. You might see short-term success but doom yourself in the long run.
What is your business model? How have you monetised your product?
Our business model is SaaS. Developers pay us monthly subscriptions to power their realtime infrastructure. Costs increase based on the popularity of the apps we support. The more connected users, the higher the price.
We also offer a generous free tier to help people get started on smaller projects. We’ve never made a huge amount of money from the long tail of developers, but it is very important for us to continue supporting them. A developer working on hobby projects on the weekend might have a job in a larger company where they can be a champion for our product.
What’s the next step for growth – is the intention to grow the business independently, or look for an exit via acquisition or similar?
At this stage, we are focused on our milestone of building a multi-product company. We want to have a suite of tools to help developers build the software the world needs.
Our goal is to help as many developers as we possibly can, because our impact on the world is measured by this number. We are seeking to build a strong and independent company that is an example for all developer tools companies out there.
We’ll want to turn this success into value for shareholders at some point, but this is several years out. It may be an acquisition, or we may even IPO if we can get the traction we are aiming for. I feel these will be a natural consequence of doing something that we enjoy and making a company that is as valuable as we can possibly imagine.
Will you be looking for more funding?
We’re talking about it at the moment. My approach to funding has always been that it is a means to an end. If we can see a world where it is worthwhile to pour fuel on the fire, I am completely open to it. For me this means that we need to figure out a bunch of stuff related to our product direction first.